I make a point to avoid using the word “pass” when telling founders their startup isn’t a fit for Firebrand. Maybe it’s because I was a founder – I can’t help but feel empathy for them. It’s a key part of our approach. And that word just feels cold and impersonal to me. I don’t even like using it when talking with other investors.
I meet with so many entrepreneurs who pour their blood, sweat and tears into their startup. Though many loathe fundraising they put in the work and try to prepare for rejection while hoping for a Yes. These days there are more investors than ever but the balance of power is still firmly in the hands of VCs. This means for every 100 startups that pitch an investor, they may invest in one. That’s a lot of of No’s.
I totally get that rejection is a big part of fundraising and a thick skin makes it easier, but that doesn’t mean it’s easy for founders to hear “no” over and over again. Especially first-time founders. From some investor responses it can be hard to distinguish “not a fit for us” from “your startup sucks and therefore so do you!”
A few years ago a founder I know showed me a response from a VC he had pitched via email. The founder had gone through all the right steps – researched the investor to ensure he invested in his space and stage, got a warm intro, emailed a concise description of what they did and why he thought it was a fit, and asked if he’d like to meet for coffee or chat on the phone. The investor’s email reply had one word: Pass.
It’s an extreme example but that stuck in my head and when I started Firebrand I swore I’d never be that kind of VC. I never forget these are human beings I’m dealing with, not deal flow metrics for my LPs. Don’t get me wrong: I’m very clear when we choose not to invest in a startup and strive to give the answer as quickly as possible. And I always provide the reasons when it’s not a fit.
I’m sure plenty of founders and VCs don’t have a problem with the word “pass”. And I certainly don’t judge other investors for using it. My personal experience with it just created a negative association. Founders are the whole reason I have a job and this business process of fundraising happens to be a very personal one. I tell lots of founders their startup isn’t a fit for us, and why, but I don’t use the word “pass”.
I’d love to hear from the founders out there: How does it hit you when an investor says they’re going to “pass” on your startup?