When VCs Say No

What to do between the VCs say “no” to funding your startup, and when to change their minds or find some other path

One “no” doesn’t mean anything. If you meet with 8 VCs and all say no, it’s not a coincidence. There is something wrong with your plan.

Meeting with more without retooling your plan is a waste of time.

Ask them for feedback, thank them for their time.

Retool your Plan

Onion theory of risk → Peel layers risk of your onion until VCs say “yes”

1. Founder Risk

Does it have the right founding team

• Great technologist
• Someone who can run the company

Solution - add one or more founders

2. Market Risk

Is there a market for the product? Will anyone want it?

Solution - Validate the market, preferably paying customers

3. Competition Risk

Are too many startups doing this? Are you sufficiently differentiated?

Solution - Make your differentiation sharp (don’t say you only need a small amount of the market)

4. Timing risk

Is it too early or too late?

Solution - Make more progress, get customers

5. Marketing Risk

How will you cut through noise? What are the economics of customer acquisition?

Solution - Have a super sharp differentiation, model customer economics in detail

6. Distribution Risk

Does it need certain distribution partners to succeed?

Solution - Get distribution deal before raising

7. Technology Risk

Can the product be built?

Solution - Build a beta product

8. Product Risk

Can this team build it?

Solution - Build

9. Location Risk

Where is the startup located? Can they hire right talent? Is it close to the VC?

Solution - You need to move there’s a reason why most startups happen in Silicon Valley

Eliminate all risks possible to make the company fundable.