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How do you keep your relationship going with an investor who rejected you?

Most investors don't give you money for a pitch, yet your relationship with them can still go on or be built. I'd argue it's important to keep a relationship going, both so that you can come back to them when things have progressed and/or if you build something else. I'd love to hear how other founders have nurtured "Nos" into relationship - both your immediate response and how you've kept in touch. Please only respond if you've done - no speculation.

7 Replies

Peter Weiss
7
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Peter Weiss Entrepreneur
President at American Outlook, Inc.
If you can, inquire about why they're passing. Sometimes the timing is wrong; sometimes they're interested but have a concern about whether you'll be able to accomplish something or overcome a particular obstacle.

Begin by asking if they know anyone else who might be interested. Then ask if it's OK if you stay in touch or, alternatively, just add them to your e-mail update list (and remove them if they ask). If you are having an open-house, release party, etc. invite them.

It's never a bad move to call or e-mail once in a while with a follow-up question about something that was said during your conversation or something they may know about.

I've been working with young companies for nearly twenty years and learned I never know when something good will come up unexpectedly. This can include an introduction to a customer/vendor/investor; a check in a later round from someone who passed earlier; or even a bit of insightful help or advice.
Thomas J. Kaled
2
0
Thomas J. Kaled Advisor
Business Development Consultant @ thomas.kaled@gmail.com
I agree with @PeterWeiss and would add if they choose not to answer any of your questions about why they chose not to invest it is best not to add them into your funnel. Identifying suspects is easy-you can use anything from yellow pages (not recommended obviously but to the point) to personal introduction with recommendation however if it is improbable that they will ever become a prospect don't waste resources and time is your most precious one.
Tom Justin
0
0
Tom Justin Advisor
CEO at Center Mass Communications, LLC
Some years ago I was heading up a hotel casino project for Las Vegas. It was a $1.5 billion dollar deal. Our smaller investors would be in the $50 - $100 million dollar range. The head of one group and I got along great. Even though they turned it down (it was so close) he and I stayed in touch. We didn't talk a lot of business but he always asked how it was going. He brought me two potential investors on a casual introduction and wanted nothing in return if they came aboard. He was technically prohibited from even doing that.
Andrea Raimondi
0
2
Andrea Raimondi Entrepreneur
Computer Software Consultant and Contractor
I think that, first of all, investors are human beings (well, most of the time anyway...) so I would say that anything you would do to nurture a professional relationship you can do for investors.

Besides that, focusing your efforts is certainly important: if you tap the wrong investor, then he or she will clearly be very reluctant to do so maybe because it's not a field they know or similar reasons.

Do your homework, make sure you're inquiring with the right person and that should decrease the number of unsuccessful pitches.
David Evans
3
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David Evans Advisor
Fractional CTO and Investor
Like Peter mentioned, absolutely ask for permission to follow up. As an investor, if I am passing because you're too early stage or there is a key flaw in your model, but I have interest, I may want an update when you are farther along the curve or have resolved that key issue. If I am passing because I don't know the space, then the likelihood is small I'd want a follow up.

It's a lot like prospecting in sales, Ask for permission and give them a reason why you want to follow up.
Marcia Allen
2
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Marcia Allen Entrepreneur
Founder and COO BioTech Solutions Enterprise Group, Ltd, LLC
why would you want to? Finding investors is like dating and finding a life partner. If it's not a fit, it's not a fit. If they didn't A. See the vision you have and want to get involved or B. give you homework and ask you to get back in touch, I recommend you move on. There are many more fish in the sea.
Nathan Beckord
1
0
Nathan Beckord Advisor
Co-founder and CEO at Foundersuite
I agree with Marcia-- fundraising is not like traditional sales, where you can often "win over" a lead with enough persistence. Once an investor says no, it's extraordinarily unlikely they will come around later (unless you can demonstrate Snapchat-like growth, in which case they'll be calling you-- and thus no need to nurture the relationship :)

It takes time and energy to build any relationship, and as a founder your time is better spent getting cycles with folks who are still prospects, or at a minimum have given you a "not right now."

I also agree with others' comments about periodically sending a progress update. As the cliche goes, "VCs invest in a line, not a dot" so showing you can regularly and consistently execute is a good thing.

To that end, we just-- like last week-- released a new tool in Foundersuite.com called "Investor Updater" which helps build simple progress reports. You can see an example here.



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