I Finally Figured Out Why VCs Refuse to Say “No” — It Wasn’t for the Reason I Thought
Investor rejections are more thoughtful than most entrepreneurs realize.
Back when I was fundraising for my startups, I noticed a pattern in the way venture capitalists ended meetings. If they weren’t interested in investing, they’d always end meetings by saying something along the lines of, “I’d love to follow your progress. Keep in touch!”
The first time I heard those words, I was thrilled. I still remember the exact investor who said them to me as we finished our phone call nearly 20 years ago. I also remember my immediate response. As soon as the call ended, I turned to my co-founder and said, “He loved our company. I think he wants to invest!”
Spoiler alert: I was wrong.
He didn’t love our company, and he didn’t want to invest. Instead, I eventually learned “keep in touch” doesn’t mean investors like your company or think you’re going to be successful. It’s a polite way of dismissing entrepreneurs they think aren’t likely to succeed while not seeming like enormous jerks.
Once I finally realized this, I began to hate the phrase. It turned me into a cynical jerk who’s skeptical of the entire VC industry. I’ve even written multiple articles accusing investors of being selfish and manipulative by giving entrepreneurs a false sense of hope when they should really just say they’re not interested.
But something happened to me last week that made me wonder if I’m not being fair to all the investors who end their meetings with the words: “keep in touch.” Maybe they aren’t being as selfish as I thought. Maybe they care a lot more about the entrepreneurs they’re rejecting than I realized.
The neighbor who wants to be an entrepreneur
I’m friends with one of my neighbors. Because he’s someone I met thanks to proximity rather than work, our relationship isn’t professional. Sure, he knows I do “Internet startup stuff,” but that’s it.
For years, I’ve not told him anything else about my work because I’ve always enjoyed not having to incorporate “business” into our interactions. It’s a refreshing change from most of…