The REAL Reasons Why VCs Won't Invest in Your Startup

I’ve found yesterday a great Twitter feed on the reasons a VC might pass on investing in your company. I publish the entire thread below, but go to Twitter to see the comments, as well.

Why VC investors pass on startups: a thread.

Alternative title: don’t take it personally.

You’re solving a problem that doesn’t exist.

The problem exists, BUT not for the audience you’re targeting.

The problem exists, you’ve got the right audience, BUT it’s not as painful to them as you think it is.

The problem exists, you’ve got the right audience, they feel a lot of pain, BUT your solution doesn’t really fix that particular problem all that well.

The problem exists, you’ve got the right audience, they feel a lot of pain, your solution is the right one, BUT it’s not a big enough market.

The problem exists, you’ve got the right audience, they feel a lot of pain, your solution is the right one, it’s a huge market, BUT it’s super saturated.

The problem exists, you’ve got the right audience, they feel a lot of pain, your solution is the right one, it’s a huge market, there’s room for new players, BUT your business model won’t scale.

The problem exists, you’ve got the right audience, they feel a lot of pain, your solution is the right one, it’s a huge market, there’s room for new players, your business model scales, BUT you can’t defend against competitors.

The problem exists, you’ve got the right audience, they feel a lot of pain, your solution is the right one, it’s a huge market, there’s room for new players, your business model scales, it’s totally defensible, BUT you’re not pitching it well.

The problem exists, you’ve got the right audience, they feel a lot of pain, your solution is the right one, it’s a huge market, there’s room for new players, your business model scales, it’s totally defensible, you’re acing the pitch, and they still said no. NOW WHAT?

Non-comprehensive list of reasons why VCs might STILL pass:
– Fund is out of cash
– They invested in a competitor
– They don’t invest in your space (and are beholden to their LPs to stick to their thesis)
– They don’t invest at your stage
– etc etc etc

Of course, at any point in this process, the reason they pass might be YOU. The founder & team. Investors may not believe you got it in you. They will rarely own up to this – it’s hard to tell someone you don’t believe in them.

It happens. It sucks. It hurts.

Fundraising is hard. For 1st timers, it’s harder. For outsiders, it’s worse.

Focus on what you can control, build relationships, look for the people who believe in you. You might fail. Most of us fail a LOT.

But if you really want it, don’t let a pass stop you…

Prove them wrong instead.