Originally published on Forbes in multiple parts. Part 1 here.
You’re more likely hear about the companies that venture capitalists said “yes” to — the big funding rounds, the success stories, and the unicorns. But the day-to-day reality of being a VC is that we spend ~99% of our time saying “no.” It’s a core competency of any VC. Or at least it should be.
Receiving that “no” as a startup founder is often hard. It’s not fun for us either, though. We’re empathic to how difficult it is to build a business and the effort and belief it takes. It can be painful to tell the human being you’ve just spent time with why something they’re building is not a fit for you or your firm.
Most of the time VCs have one or more discrete reasons for saying “no.” Although it would be ideal if we relayed them to founders clearly and openly, we sometimes feel pressure to take the less confrontational path and say vague things “this is too early for us” when the truth is more difficult to hear. VCs have a code around rejection language that often leaves founders scratching their heads to interpret, but candor is usually better for both parties long-term. Truthfully, the reason for the “no” ...
