Bag One Cat

Kitsap: There may be fifty ways to leave your lover, but there are even more ways for venture capitalists to tell you no. Unfortunately, venture capitalists don’t like to provide clear and unequivocal rejections; they prefer the SHITS technique: show high interest, then stall.

Here are the typical responses that you’ll hear:

“You’re too early for us. Show us some traction, and we’ll invest,

“You’re too late for us. I wish you had come to us earlier.”

“If you get a lead investor, we’ll be part of the syndicate,”

“We don’t have expertise in your sector.”

“We have a conflict of interest with one of our existing companies.”

“I liked your deal, but my partners didn’t.”

“You need to prove that your technology can scale.”

Most of the time, what the investor is really telling you is, “When the hell freezes over.” But there are some cases in which investors are genuinely interested but not yet ready to commit. You may eventually get an investment from them, but it will be as hard as herding cats to finish the process.

existing companies

The key to herding the cats is to get one in the bag rather than coming close to capturing several. It’s helpful if this cat is a big, beautiful, and well-known one, but any cat that isn’t your relative will do because venture capitalists—like misery—love company.

“Continuing to make contact without demonstrable, significant improvements in your story will change your status from ‘persistent’ to ‘pest,’ and nobody funds a pest.”

Winning over a venture capitalist is not only about providing objective, quantifiable, and compelling information through your pitch and references. It’s as much an emotional process as it is an analytic process. An uncommitted venture capitalist is still watching what you do:

Did you follow up by answering questions that you couldn’t answer during the pitch?

supplemental information

Did you provide supplemental information that supports your case after the pitch?

Have you surprised the investor by closing big customers or meeting milestones early?

Have other high-quality investors written you a check?

Persistence along these lines can pay off, and you can provide these types of relevant updates weeks and even months after your initial pitch in your efforts to herd the cats. However, continuing to make contact without demonstrable, significant improvements in your story will change your status from “persistent” to “pest,” and nobody funds a pest. 

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