Mustering the courage to present your idea to a VC takes bravery. If it doesn’t go as planned, rejection can be disheartening and discouraging which could make moving forward tough. However, it is necessary in order to make your dream a reality. Whether you’ve experienced one rejection or ten, bouncing back doesn’t get any easier.
It is important to understand that not all VCs are going to vibe well with your vision, and that is okay. A rejection doesn’t mean your idea is bad, so you shouldn’t take it personally. Try to turn a seemingly negative outcome into a positive one, by understanding why they said “no.” Here are the top reasons why founders receive rejections from VCs:
There is steep competition in the startup world, and sometimes VCs are unwilling to invest in an industry that seems oversaturated. If this is the reason for rejection, it can be a chance for your startup to develop uniqueness and stand out from other similar startups.
Lack of Momentum
Investors often reject startups who are in the early stages of development simply because of the lack of momentum or traction around the idea. Simply put they don’t see the proof that your startup will be lucrative. Take this reason for rejection as a challenge to amp up the velocity of your sells or further clarify that your potential customer population is one that will deliver results.
Your Idea Is Costly
When discussing the valuation of your startup some investors will attempt to negotiate down or say “no” altogether. If this is the reason you get rejected, take it as a lesson in knowing and believing in the value of your idea.
Some investors will reject an idea if they feel the startup is late to the game or the industry is old news. Flip this negative into a positive by revamping your mission statement and showcasing why your startup has longevity.
It is important to bounce back from a VC rejection so your startup does not become stagnant and lose momentum. One way to do this is by approaching the right VCs that you believe are a fit for your startup. Come back strong by researching firms that have a track record in investing in your demographic and pitching to them. Choosing which firms you pitch to will not only save you the despair of rejection but can be empowering for founders who have experienced multiple rejections.
Mentally strong entrepreneurs bounce back stronger than before with their dignity intact and head held high ready to approach the next investor. Don’t make the mistake of internalizing or dwelling on a rejection for too long. Instead, use the above strategies to improve, then it’s on to the next.