“Bill Burnham has a great series (1, 2 & 3) on the Art of the VC No. Saying No is their business (from thousands of business plans to a handful of investments), and Bill explains how it’s hard to say No, common ways of doing it and his reasonable approach. As an entrepreneur who has heard the word as much as anyone over the years, I thought I would chime in from the other side of the table….
Entrepreneurs are in the Yes business.The more you hear that word while cultivating relationships, the greater the valuation of your company. Same thing holds for hiring and selling your product. More critically, the enemy of the entrepreneur is time; and an increase in your Yes volume, provided you can make efficient decisions, the more time saved.
When you first start your business, all you hear is No. Accordingly you become conditioned to never accept it as an answer. As your business grows, Yes volume increases and eventually you start dealing with the sell-side in a delightful turn of the table…
So generally, how do I want people to say No to me?
Before you take the meeting — for competitive, portfolio, structural, thesis, geography and other good reasons let’s save each other time. Don’t bring me in to educate you.
The “It’s Not Me” No — communicate if there is a barrier. VCs work in partnerships, and it’s reasonable for a VC to say that he wants to do the deal (even when he is not entirely convinced), but needs to persuade his partnership — when the VC works with you to do it…
The Constructive No — I appreciate when VCs believe it is worth their time to learn what they don’t know while making me a better entrepreneur… VCs have a keen eye for risk factors and can help you refine your pitch. To work through risk factors, the best VCs will introduce you to potential customers and partners. Not only can this help your business, but you get an understanding of what it is like to work with the VC.”
From this Ross Mayfield’s Weblog post.