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- What are signs that an investor isn't interested?
What are signs that an investor isn't interested?
Read time 2.3 minutes.
One of the biggest problems with the Venture Capital space is that it’s never in an investor’s best interest to be honest and tell you “NO” when they aren’t interested.
They are incentivized to drag you along, leaving the door open for them to make an investment if you suddenly get a commitment from a major client, go viral or get backing from a major VC or accelerator.
Even if they do want to say “YES” unless there is a competition or you will go under without immediate funding, it’s better to be the last $100k in a round than the first $100k, you are getting in at the same valuation but making a decision with more information.
This is why if you feel like investors are dragging you along, you aren’t alone. This is how 99% of founders feel because this is the natural state of VC. Founders want money, and investors wait till the last possible moment to give a solid answer.
Knowing this, to avoid wasting time with investors who aren’t serious, there are a few things that you should look out for. These are indicators that this VC is likely just stringing you along.
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No pushback after your pitch - If an investor has no attempt to push back on your:
Team’s ability to execute;
Problem;
Solution;
Traction;
Business Model; or,
Market Size.
Then that investor isn’t serious. Would you invest $100k+ without seriously having a talk through each element of the business? No. And neither will 99.9% of investors.
No next steps - If you find yourself at a point where you are waiting for a VC with a lack of clarity as to the next steps that you or they need to take to move it forward, then you likely have an investor who isn’t interested. In this case, don’t write them off, but send an email to establish the next steps; if you don’t get a clear answer, you know they aren’t interested.
No engagement - If you are pitching and the investor does not seem interested at all, then you likely have no chance. If this investor seems to be showing interest, then it’s likely to be polite. Push them for real feedback and commitment. At this point, you’ll likely see them retreat.
Negative Feedback - If an investor is negative (in a non-constructive way), then they aren’t interested. Challenging you and/or providing constructive feedback is beneficial, and you should look for this, but simply tearing apart your company with no attempt to help you is someone with no serious interest in investing.
When you are fundraising, make sure to look out for these signs. Remember that your time as a founder is important. You can’t waste it following up on dead ends.
Has an investor ever wasted your time with "false" interest? |
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