Start-up Fundraising: Getting Investors to Say “No”.

Written to my fellow-optimists, the bulldozers and the persistent, the eternal die-hards…

I am starting to raise funds for my third tech venture.

Having raised capital from VCs and angel investors before, I have a different perspective to share — and to abide by this time:

Round One — Instead of gunning for a ‘Yes’, aim for a “No”.

Why?

It’s easy to present a compelling story. And if you’re a founder — it’s likely you can be at least a little persuasive.

With enough hard work, you can unearth a whole list of reasons that demonstrate why your market potential will be huge.

But what if you’re wrong?

It’s easy to quantify what it’s gonna cost your investor. But do you know what it’s gonna cost you?

I’ve invested in startups, and I’ve spoken to enough founders to know — that they give up a lot more for their ventures, their team and their investors than they actually anticipated at the start. Also — been there, done that.

After the cash has run out, after the last employee is out the door, after investors are done believing, you’re still working on it.

So — for my new venture — I’m looking for investors who can give me reasons Not to do it.

• Perhaps, they don’t think the idea and/or the business model is exciting enough or worth investing in.
• They don’t think the market is big and exciting enough.
• They don’t think that customers feel enough pain to solve for.
• They don’t think you are worth investing in — great, find out why, and if there’s is a valid reason, fix it
• They like you, and the idea, and the business model, and the market; but don’t think there is a product-founder-fit.

The list goes on… but if you keep seeking a ‘No’, and keep ending up with a ‘Yes’ — then you know it.

And that may be more valuable than your first cheque.