New York venture capitalist Fred Wilson admits it. It's not him, it's you. The guy has to tell you needy entrepreneurs out there "no" a lot. And he's getting better at it. Typically all it takes is a quick email reply along the lines of "it doesn't fit into our investment strategy" or "we don't invest in content businesses" or "it's too early stage" or "it's too late stage". But sometimes you people somehow get your piss-poor business plans past the front door. That's when Wilson gets to tell you "no" to your face and the fun starts.
Sometimes it's not even the plan that yields a negative result. Sometimes its you. And Wilson says he's going to let you know.
What do you say if the reason you don't want to invest is you don't have confidence in the person running the company (the person you are saying no to in most cases)? Do you tell them that? Or do you make up some other reason?
I've tried every way to say no and my belief is the truth, no holds barred, is the best approach. If you don't think the entrepreneur can run the business, tell them that. If you think the market is too small, tell them that. If you think the competition is too tough, tell them that. Many entrepreneurs will take a "shoot the messenger" approach and be annoyed or upset with you. But that is vastly preferable to blowing someone off with a "my partners weren't into it" or "we just couldn't get there".
(Photo by Ben Scicluna)