You may have a business idea that you’d think will shake the world. Alas, you don’t have the money. For the business to see the light of day, you need investors to provide you with the funds that you need.
So armed with your firm belief in your business and a 75-page business plan, you meet a prospective investor whom you expect to be blown away by your idea and give you a check. Then you hear the dreaded words, “No, I’m not interested.”
Hearing the word “No” can be a crushing blow to any entrepreneur. In a previous article, we provided some reasons why investors say “No,” which can include:
- Failure to present strong total picture
- Question of sustainability
- Unwillingness to share control
- Underestimation of startup costs
- Pumped up revenue projections
- Lack of know how in the business
- Too much fluff, little substance
- Poor communication skills
- Inability to take criticism
There are a lot of reasons why the investor could have turned you down. Perhaps you need to tweak your business plan. Or maybe the investor didn’t know you well enough to give money to you, and that you failed to establish enough buyer confidence to secure that “Yes.” The investor may also have realized that you – and your business idea – are not a match for him/her.
Before you head out the door to lick your wounds, experts suggest that there are a number of things that you can do to get something positive out of this heart-crushing situation. You can turn this rejection into an opportunity to gather information necessary to improve your next pitch to another investor:
- Find out – not ask — why they said “No” to your proposal and what in the offering and discussion made them reach that conclusion. This can save you countless minutes replaying the event in your head asking what went wrong and what should you have done differently. Just make sure that you phrase your question in a consultative, not accusatory tone that smacks of desperation.
- Ask for their advice on how you could improve, and maybe even probe what would make them say yes. Inquire about what they’d like to see changed or added to your proposal that would motivate them to invest the next time around. Not only are you showing them that you respect their expertise, but the suggestions raised may provide you with clues of where you can improve and what issues need to be addressed.
- Inquire if they know of anyone who may be interested in your business idea. They may not think that you or your idea may be right for them, but who knows, they may know of one (or two) who may be more willing to support you. Never miss an opportunity to get a referral.
- Ask if it is worth talking with them at a later date when you have tweaked your business plan, gotten that patent you’re applying, you have other investors on board, solid orders, better prototypes, etc.
- Ask for feedback on what they think you could improve in the delivery and the content of your pitch
Think about what the investors said, and address the concerns raised. Find ways you can improve how you package the business idea and how you make your pitch. But if “no’s” are all you get, then maybe it is time to seriously rethink your idea.