5 Things Investors Will NEVER Tell You

Has an investor ever told you…

It’s just not for us.

But then when you press for more details as to WHY they won’t invest, you feel like you’re just not getting the whole truth?

Which hurts more? A) The No, or B) The frustration you feel when no one will give you a straight answer?

If you think there’s something they’re not telling you…

You’re probably right.

Today we’re going to talk about what they’re not saying 👇

The only reason VCs offer candid pitch feedback: because founders know when they’re being lied to.

The top reasons investors won’t give you a straight answer:

• They get tons of pitches & it’s incredibly time-consuming to give concise, concrete & helpful feedback on every single pitch
• They don’t want to hurt your ego
• They know they’re bad at delivering constructive feedback in a way that won’t hurt your feelings
• They want to let you down as easily as possible b/c they actually want you to come back later
• You have a relationship & they don’t want to break it

But there’s a few things you might not ever hear from them, starting with…

5. We’re biased against you

VC bias is real, and you need to know it exists.

The stats don’t lie.

Black founders have it worse than women, at 0.13% of all VC funding in 3Q 2023.

The flipside, though - thematic funds are spinning up all over the place to support underrepresented founder segments, including women-led teams, Black entrepreneurs and more.

Thematic funds can be incredibly supportive, too.

4. You suck at sales

Technical founders, they’re looking at you.

You might be great at developing products, but if you let your pitch get side-tracked on product features & development, you lose the big-picture story.

Some VCs will understand; others just shut off, because anyone can make a product - but not just anyone can sell its relevance, stickiness & scalability in a business context.

If you’re past Seed stage, you better have your investor story on lock.

Otherwise, you shouldn’t be pitching - because investors read this as:

If you can’t pitch me this company, how can I be confident you can pitch customers?

Not every VC is going to shoot you as straight as Marc Andreessen, though.

3. We think your product sucks

VCs get tons of pitches, and they see all the products.

I’ve personally received a different pitch for the same product from four different founders spinning up four different startups.

If it’s not differentiated, defensible, scalable or executable, then you better go back to the drawing board before you keep pitching & sinking.

There’s one way to prove your product beyond a VC’s opinion:

Revenue.

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Prove them wrong by making money & growing [profitable] sales. Speaking of which, here’s one that you’ll probably never hear a VC say…

2. We actually don’t have money right now

Funds don’t operate the way most founders think.

A $100M fund doesn’t necessarily mean the fund has a bank balance of $100,000,000 in their Checking account this very moment.

In all likelihood, it has maybe a fraction of that.

Funds operate on the basis of capital commitments, where the VC fund’s investors (LPs) promise to wire the money later.

Sometimes, those LPs don’t have the cash.

And other times, the fund’s performance has been so bad that when asked, LPs refuse to wire money.

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But a VC would never tell you that.

1. Your pitch deck is really, really bad.

You might just suck at telling the story.

Or you don’t know how to put your best foot forward.

Either way, sometimes busy investors just give you a quick platitude rather than delve into the specifics of why your 47-page monstrosity of a PowerPoint that doesn’t answer their most basic questions, isn’t a fit for their investing theme.

They don’t want to tell you your baby’s ugly, and aren’t going to be the one hanging around helping you fix that.

However, if you read between the lines, you’ll make changes & come back with something better.

If they’re feeding you BS, try this:

If your best-fit, top-choice investor turned you down, you think what they’re telling you is BS, and you really want to know what they think, then do this:

• Accept It: You’re not going to turn a No into a Yes.
• Grin: “Come on, give it to me straight.”
• Ask: “What are the top 3 things you would want to see, that might have made this a better fit?”
• Assure: “Don’t worry, I can take it.”

You’d be surprised at what you hear.

And if you need more translation on what that VC’s telling you, then check out this post.