A failed founder’s survival guide
Everyone wants investment from venture capitalists.
It’s the validation that catapults you onto the cover of Forbes, your ticket to the pantheon of tech legends. VCs can be a curious bunch, however. They have a special secret language — a dialect that’s borderline incomprehensible to the uninitiated.
For instance, much like the Inuit people, who have many words for snow, were you aware that venture capitalists have more than 400 words for “no”?
Language betrays purpose. In Orwell’s 1984, Newspeak was created to narrow the range of thought and, ultimately, make dissidence impossible. In the same vein, VCspeak has evolved to serve one key tenet:
“Never say no to a founder, just in case.”
VCs have absolutely no incentive to sour their relationship with you. What if you become the next Zuck and remember the junior deal analyst who let you down gently?
You’ll never hear the true reason for turning you down this time. For a pre-seed or seed round, this is either:
They don’t believe in the management team.They don’t believe in the market opportunity.
I will tell the story of my multitude of VC rejections, impart my hard-earned knowledge of VCspeak and give you an inkling of what VCs say when they just mean “no”. Finally, I’ll close with my top 10 survival tips for when you’re out fundraising.
My first real startup, Fixr — think Uber for car repairs — was a mess from the start. When I joined up as ‘CTO’, there were endemic power struggles between the existing founders and a chronic case of “if we build one more feature, then the users will flock to us”.
Through a Herculean effort of LinkedIn networking, we managed to get some short calls with a few very junior VCs. None were brave enough to rip off the poisoned shirt we had woven for ourselves:
“Talk to us again when you have traction.”
In our first-time founder naïveté, we took this to heart. Our startup lived or died on…