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This is the last of four posts offering practical advice for early-stage startup founders turned venture capitalists. Jonathan Shriftman is a partner of expansion of capitalis a growth stage VC fund that has invested in companies such as Coinbase, Cameo, Classpass, Postscript and Astra Rockets. Jonathan previously founded his Humin, his AI-powered address book acquired by Tinder. sole bicycleis the first online consumer bike retailer.
You can read previous parts of this series at:
Raising capital is brutal. We asked Jonathan for his best advice for dealing with rejection.
It’s really hard for VCs to say “no” when they’re raising money. Below is a practical list of things to do if you get rejected by a VC.
thank you for your time
Don’t let the bridge you cross be the one you burn.
Seek feedback from VCs
They may have very specific concerns about whether they have the right growth, the right numbers, or the right team. You may believe. You may disagree with the feedback, but if there are parts you agree with, those issues can be addressed before your next funding approach.
In my experience as a founder, I take seriously feedback from VCs who reject companies. Later I went back to them and showed them how I implemented the proposed changes and they became investors.
Even if a VC rejects you the first time, the door isn’t closed forever.
ask for referrals
Even if the VC says no, ask if they can refer you to other funds that you think are a more strategic fit.
You may have talked to VCs with deep expertise in fintech and healthcare. You can ask them if they know of other funds that are better suited to your business. Venture capitalists are often happy to make helpful referrals to other funds that go forward and invest in your company.
For tips from venture capitalists and access to the resources your startup needs to tackle their next challenge, sign up today for the Microsoft for Startups Founders Hub.