Nobody passed and nobody moved

An email thread with a fund in it, last message eleven days ago. Two calls before that.

Ask how the raise is going and it comes out in hedges. We sort of have something there.

Three months, nine or ten funds, not one no. That is worse than nine rejections. Nine rejections would be nine decisions, and one or two of them would tell you why.

What is under the word interest

Almost every team we talk to tells us they have interest.

Underneath is usually one reply to a cold message, or two meetings and then nobody answering. We keep the numbers on cold approaches into funds. Seventy of them, three replies, one real conversation. One reply is what the average looks like.

Some of it arrives as being in DD, and that phrase covers everything from a real process to a second look at the deck. One question separates them. Who else needs to see this, in what meeting, on what date. A fund actually working your deal answers in a line.

Nobody is lying. The word is covering for a month that produced nothing.

The nine were also never nine. Two or three of them could plausibly have led. The rest were always going to wait and see who priced it, and that was true on the day you first emailed them.

Say it with a date in it or don't say it

Every founder tells funds that others are interested, so the vague version carries no information and it does no damage either. Nobody passes because a founder said other people were looking.

The version that works has a name, a number and a date in it. Somebody takes it to their Monday meeting on the 14th, the round closes on the 30th, this much of it is spoken for. That moves a person who was otherwise going to think about it for another quarter.

The version that ends you is the one that gets checked. Say a fund is in, have somebody ring that fund, find out they passed in June, and you are done with that person permanently. It does not stay with them either. An overstatement somebody caught is the kind of thing funds do relay, and the same projects reach us from different funds because the circles are small.

The easy version is process stage. They're taking it to IC, when an associate said he would mention it. That one does not feel like a lie and it gets checked just as fast.

What it means when a VC says interesting and goes quiet

Go back to your first call with a fund. It ended on interesting, well done, keep us posted, with no next step and nothing to send.

That word comes out two ways and from your chair they look identical.

One is a decision. They made it somewhere in the first ten minutes and would rather not put a reason in writing, because a stated reason invites an argument nobody wants to have, and the real reason is often the team. No partner writes that down. The other is that nothing they heard let them form a view at all.

You do not get to know which one you got. Either way you come off the call with nothing.

Only the second one is yours. A fund can't decide about something it can't judge, and whether it can judge comes down to who was sitting in the room. Timing, a conflict they won't name, a fund with no money left until the next close, none of those move for anything you say.

So the part you can work on is a minority of the nine. Hold one more possibility open while you work on it. Nine people looked and none of them got there, and sometimes that is a fact about the company rather than about the rooms. Worth asking before you rewrite the pitch a third time.

When nobody in the room can judge the thing itself, the deal gets decided on proxies, and the loudest proxy is who else is in it. That is exactly why you reached for the interest card a month later.

Don't explain the biotech to the banker

Whoever you are talking to spent a career on something specific. If that was payments and infrastructure, and you spend twenty minutes on the science, you have used the meeting on the part they cannot assess.

The person matters more here than the firm does. Two partners at the same fund will judge you on different things, because they have done different jobs.

Five things to look for before the call:

• What they actually back. The last ten deals tell you more than the sector list on the site. Announcements run six to eighteen months behind, so this is their appetite a year ago, and a fund with a hundred names still has a shape
• How early. A firm whose last four cheques went in after a first institutional round is not going to be moved by a pilot
• Who on the team led them. Deal announcements usually name a partner, and that partner's background is public. They get the lead wrong often enough that you should not name a deal you are not sure about
• What those companies were saying about themselves at the time they raised. Their old site and their old posts are the format that already worked on this person
• Whether they have money right now. Roughly checkable from when the fund was announced and when the last cheques went out. A fund between vehicles will take the call and will not do anything with it

What you want out of that is the part of your company this person has seen somewhere before.

Two things worth saying in your first call

Concede the hard part before they find it. Yours might be the sales cycle, the regulatory path, or a number that only looks good because the base is small. Take the one they would find in ten minutes and put it in the first ten, with the number attached.

Selling into large organisations, that sounds like this.

"Enterprise is slow. The first one took us [N] months. We have [N] paid pilots now, each of those teams sits with us on the build, and [the specific thing] changed because of them. This is what they paid, and this is what renews."

With nothing sold yet it is the same move with different contents. Say what you have not proved, give the usage number you do have, and say what the next three months are meant to settle.

Then hand them the failure mode they already know.

"You've been in this category since [company]. So you've watched a few of these come apart on [the specific failure]. That's the thing we'd fail on too. Here's where we are on it today and what we're doing next."

That second one only works if you name the failure that actually keeps you awake and you have an answer ready. Name the flattering one and you've told them you don't understand your own business. And if you name the real one with nothing behind it, you have written their pass for them, in your words, and they will repeat it at their Monday meeting.

Both of those leave the person something to turn over after you hang up. That is the whole job of a first call.

How to follow up with investors who went quiet

By the time a round has stalled you are past the first call with most of the funds on your list. Those are not dead, but they don't reopen on a nudge, and a nudge is what everybody sends.

Don't go back until you have a close date. Reopening nine names with nothing behind you spends the last thing you had with them. And where somebody you both know can make the reintroduction, that beats anything you send yourself.

Go back with the part they could not get a grip on the first time, an actual ask, and permission to say no.

"Since we spoke, [the specific thing that settled]. That's the part I think you'd have a view on. We're closing on [date]. If the answer is no, no is a fine answer. Fifteen minutes Thursday or Friday?"

Most of them will not answer at all. What does come back will be short. Not a fit at this stage, too early for our model, we're focused elsewhere. None of those is a reason. Silence and a brush-off are still the two most useful things you will collect in three months, because each one takes a name off a list you have been running as live.

A real reason almost only comes back from a fund that nearly did it. Read those closely and skip the rest.

What makes investors give you an answer

Some of the funds you go back to will say no. That is the point.

A fund that can judge you has a decision in front of it and makes one. A fund that can't will keep the conversation warm for a quarter. Warm costs it nothing. Closing the file costs it a little goodwill with somebody who might matter later.

Nothing on their side ever forces the answer.

So you have to bring the thing that does. A close date said out loud to everybody in the same week, a first cheque already wired, a lead who has committed. That work is separate from anything here, and no amount of good pitching replaces it.

TL;DR

• A round nobody rejected is worse than one they rejected. Nine rejections would be nine decisions, and one or two would tell you why
• Interesting means one of two things. They decided and won't say, or nothing they heard let them form a view. You don't get to know which, and the nine were never nine anyway
• Vague social proof costs you nothing and buys you nothing. A name, a number and a date moves people. Getting caught overstating one ends you
• The person matters more than the firm. Their last ten deals, how early they go, who led them, what those companies said at the time, and whether the fund still has money to deploy
• Go back to the burned names with the part they could not assess, a date, and permission to say no. What comes back is mostly a short no, and that still clears the list
• Nothing on their side ever forces an answer, so the date has to come from you