Isn't this a rule of thumb for almost everything in life as well ?
Every decision you're confronted with. Oftentimes, saying "yes" to one thing is equivalent to saying "no" to a hundred other possible choices.
ErikSchwartz
· 2 years ago
As one you said "no" to I can report that the feedback that came with your "no" has helped us immensely. Your input has shaped the product we've built and made us re-examine a bunch of assumptions we had made about the business the product and the team.
We got told no by VC's about 10 times. Most of the time you never get a "no", you just get silence. Sometimes you get a "no" that doesn't really help. Your "no" helped us make a better product and eventually get funded.
Thank you for that.
fredwilson
· 2 years ago
erik - i only wish i could provide everyone with the experience you had!
amit
· 2 years ago
The answer "No" is the 2nd best answer one can hope for ("Yes" being the best.) In my experience -the most common answer is no response, and the worst answer is "Maybe".
a "No" with an explanation is even better, but i'd take a a quick flat no over the other alternatives (other than yes) any day.
thanks
vruz
· 2 years ago
Perhaps because "yes" and "no" in your case are actual information and that helps to move on for bad or good, but "maybe" is more of a delayed response in time, not an actual answer, more of a non-answer.
Like in the Oasis album title "Definitely Maybe"... eternally delayed judgement is not of much use.
Chris
· 2 years ago
Why say no?
Why not tell someone what you wished you saw? Why not tell someone what they could do to make things better? Why not suggest a specific deliverable that someone can provide (including a different founder) to improve? Why not make an introduction?
Fred and I met and I received feedback (that I did not take as a "no") that the market for my idea may not be large enough. Perhaps I am naive or perhaps Fred was being polite, but nowhere in our hour-long conversation did I hear "no" in what was said.
I'm sure "no" is a one-word metaphor for "managing expectations" or some loftier term, but in my experience, the best way to say "no" is not to say it at all. Offer a "wish list item," an alternative approach, or perhaps someone else who can be helpful. Such a "re-routing" may not always be available, but it will likely take just about as much time to type and/or speak, provided the willingness to give thoughtful feedback is there.
Andy Freeman
· 2 years ago
Because he probably hasn't looked into every issue; knowing one reason for "no" is not the same as knowing that there's only one (or a few) reasons for "no". If he says "fix this and I'll fund you", he's committed.
fredwilson
· 2 years ago
andy's right - it's hard to say "do this and we'll fund you". you don't want to set expectations that way. it's best to say "this is a problem for me" without the explicit committment
fred
John K
· 2 years ago
I wouldn't ever hold you to this Fred, but what if a team came back to you a month later and said, "we fixed all the things that turned you off". Would you look again?
Andy Freeman
· 2 years ago
That said, how often do you run into an opportunity that has one fixable problem and what do you do?
Peter Bell
· 2 years ago
Back when I was looking to do a series B in 2000, it would have been great to get some "no's". One of the dissatisfactions was that most firms we talked to wouldn't just come right out with an objection - it was all "maybe's". The general rule always seemed to be "lets not say no - that way we may be able to get back in if the revenues start to ramp or something else good happens".
Has something changed in the industry since I've converted to bootstrapping, or are you planning on starting a new trend?!
Daniel Markham
· 2 years ago
Great article.
I was talking to a perspective partner a couple of months ago and got a no. She basically said "Look -- it's a great idea, but I just can't get excited enough about it to join into a partnership."
That was great feedback. Simple nos are fine, a sentence or two is terrific. While nobody can give up on an idea but the entrepreneur himself, the more honest feedback we get the better decisions we can make. That's good for everybody.
Jerry
· 2 years ago
Do you remember when I used to make people cry saying no? Yeow.
fredwilson
· 2 years ago
you took honesty to a higher level!
Michael Bailey
· 2 years ago
Well Fred - you are either going to invest in the company, or you aren't. Telling the requester NO as soon as possible let's them continue their search with other firms.
I agree with the comments above that saying "maybe" or dishing out "silence" are the worst things that VC's can do.
I think that "maybe" messes up the flow the worst - From the requesters point of view, if there is even a slight chance the the VC firm is considering the proposal, then things slow down while waiting for a response.
I have heard "no" a bunch in the last year, but mostly I have received "silence" - the silence makes me nervous because I figure that my idea is a good one, and that they're asking around with people they know if duplicating my process/service is possible.
Of course, I remain hopeful when I can read the headlines on TechCrunch and see others getting funded for ideas smaller than mine. Persistence is a blessing and a curse.
Steve Kane
· 2 years ago
"I hate people when they're not polite."
-- "Psycho Killer" Talking Heads '77
fredwilson
· 2 years ago
"watch out, you might get what you're after" -- "Burning Down The House" Speaking In Tongues
Robert Seidman
· 2 years ago
"And you may find yourself in a beautiful house, with a beautiful wife" --"Once in a Lifetime" Remain in Light
fredwilson
· 2 years ago
Wonderful. I wonder how many talking heads fans we've got in this community
Greg Pass
· 2 years ago
"Try not to look so disappointed. It isn't what you hoped for, is it?"
-- "Memories Can't Wait" Fear of Music
JimB
· 2 years ago
The same goes for recruiting. If a job candidate is not going to work a gracious "no" with some brief constructive feedback should happen sooner rather than later. Large corporates are still really bad at this. They can spend weeks and weeks pondering a hiring decision and then not even have the courtesy to do a follow up. Silence just says you are not even worthy of a one line e-mail
DAR
· 2 years ago
+1
I've worked a lot of places in my career, and consequently have done a lot of interviewing. And I have to agree, most companies (both large and small) are extremely rude about saying no - or even getting back to you at all!
That *really* ought to change. It's extremely unprofessional in my book, and reflects badly on the organization.
Joe
· 2 years ago
I think you should have everyone ask you NOT to invest in their company. Then you can spend all day saying Yes! It would be very refreshing, I think.
Fred333
· 2 years ago
If you did that then you would have time to actually find the business ventures worth investing in.
Nelson
· 2 years ago
Speaking as an entrepeneur, "no" is a much better answer from a VC than the usual "maybe, could you give us a bit more data on your business? and we have this technology person we'd like you to meet. and could you update us next month with the latest business metrics?". Naive entrepreneurs tend to believe the VCs are sincerely interested when they're just being strung along. It's one of the unpleasant lessons a founder has to learn.
Don Jones - VentureDeal
· 2 years ago
Great post. Sadly, the venture capital industry is infamous for the never-ending maybe...
ashkan karbasfrooshan
· 2 years ago
good post, but it's actually harder to say no when you're an entrepreneur faced with 1000 and 1 growth opportunities, employee requests etc...
kareem
· 2 years ago
I met with a VC recently who was relatively new to the job. She gave us explicit feedback on what she didn't like about our business. It was the most refreshing and helpful meeting I'd taken with a VC, and I told her so.
You're in a service business... if you help out an entrepreneur now (and not just blow smoke like 99% of VCs out there), that entrepreneur will be more likely to want to work with you in the future.
Mrinal
· 2 years ago
That is so good to hear Fred - very very few people think like this and then do that. When I was "vocationally challenged" during the downturn, I had the same request from companies/recruiters - 1) tell me no - at least something and then if you can 2) a why so that I can learn and get better.
I think the responsibility lies on both parties and more with the one listening to the No - if they can make the person giving feedback comfortable about it, you will increase your chance of learning and practicing kaizen. A good No almost is better than a Yes - you have a problem to solve and you will probably come out stronger if you have the right attitude. Smooth sailing never teaches you anything.
JA
· 2 years ago
I wouldn't mind seeing a Fred Wilson 'anti-portfolio' -- a la Bessemer --. Let's see the deals you passed on that you wish you said 'yes' to.
fredwilson
· 2 years ago
How far back do you want me to go?
Mark Waterstraat
· 2 years ago
Fred. Thanks for the insight you so willingly and frankly share. Our (hopefully soon to be) capital partner tells us their decision process goes, in order, People, Product, Market, Valuation. An investment opportunity must pass each criteria in order to move on to the next. If you pass all four and get through their underwriting committee, you get funded. Do you use a similar process, or will you share your high level criteria?
fredwilson
· 2 years ago
We don't have a process that is written in stone like that.
Clearly the people are the most important followed closely by product and market.
And we do care what price we pay.
I wish I could tell you that we have a specific way that we look at each and every deal, but we don't. Each one is different and we analyze them differently.
fred
ldeakman
· 2 years ago
As an LP (with Fred and many others), we are in the same position of constantly saying "no". I do try to look at all of the PPMs and presentations but we are often overwhelmed by inbound interest. I've tried a thousand different ways of saying "no" to VCs and I'm sure all you entrepreneurs will be glad to hear that they (the VCs) are faced with the same hunt for capital from LPs and that they hear a lot of "maybe's" and just don't get answers from many LPs. Most of the time it's not the market or the business plan that I'm shooting down but the team. It is very difficult to say no because you can't get conviction around a person or their partners. So when I do say no, I try to be bluntly honest and I've found that is the best way of stopping the bleeding. So far, I'm pretty glad that I said "yes" to Brad and Fred. Lindel
Youre talkin a lot, but youre not sayin anything. - psycho killer
fredwilson
· 2 years ago
I love the Talking Heads quotes.
This might be a fun thing to keep up in the comments of this blog going forward
fred
SCP
· 2 years ago
Thanks for being human. I've been on both sites and the truth is always better. Be strong. Be direct. Be yourself.
Aruni
· 2 years ago
As others have said, 'no' is 1000 times better than the neverending 'maybe' answers that many VCs give. I'd rather hear 'no' because of xyz (even if it's a brief reason). Just because I hear 'no' I don't interpret that as 'never.' In many cases, it means not right now. I also appreciate this answer from a potential customer because otherwise you can spend your life trying to get them when they really have no intention of working with you. When I have a prospect tell me this I thank them because I can put them on the backburner and focus my attention on other areas.
If you are not confident in the founder/CEO then I think it's perfectly fine to tell them that by saying something like "I think you need to add xyz skills to make this a deal one we are interested in evaluating further." A true entrepreneur (IMHO) will say 'OK, thanks let me work on that and I'll get back to you if it makes sense.' I think many entrepreneurs think they have to force a fit (just for $$) where there just may not be a fit and just like in many relationships if you force a fit in the short term...it can go sour b/c both parties weren't at least 95% bought in on a) the company, b) the mgmt, or c) the market. Make friends, keep them posted, and if not this deal then another deal you are involved in the future might make sense and be a better fit.
Denny K Miu
· 2 years ago
I wish there are more VC's like you. My personal experience is that very few of them are capable of saying NO.
" ... in a perfect world, if an idea from an entrepreneur is not ready for funding, VC's should simply tell them to go away and come back when it is ready. But the problem with VC’s is that ... while their instinct might tell them that I stink, their intellect would convince them that they might miss out on the next Google. So VC’s will never actually tell me to go away. Instead, they will hover around and keep me at a sniffing distance until they are convinced that I will never get funded by one of their neighbors."
I prefer you telling me I cannot run the company than waiting for your forever response on investing into my company. At least if after fews "no" with the same reason I Cannot run the company, I'd start to look for someone who could run the company. That's better than "waste" your time trying to get a VC to invest without knowing why they all say "no"
Pete
· 2 years ago
Hi Fred, I agree with everything you said. The only thing I would add-- if you're going to turn an entrepreneur down saying that you don't have confidence in the entrepreneur, then I think you owe that person some constructive critcism. I'm sure that you do this, but you didn't mention it in your post, so I thought I'd comment.
It's one thing to turn down an idea or a market, but it's a pretty harsh blow to turn down a person, and tell them to their face. At least explain to the person why there is no confidence: i.e., lack of track record, questionable hires made to date, etc.
All Comments
Every decision you're confronted with.
Oftentimes, saying "yes" to one thing is equivalent to saying "no" to a hundred other possible choices.
We got told no by VC's about 10 times. Most of the time you never get a "no", you just get silence. Sometimes you get a "no" that doesn't really help. Your "no" helped us make a better product and eventually get funded.
Thank you for that.
In my experience -the most common answer is no response, and the worst answer is "Maybe".
a "No" with an explanation is even better, but i'd take a a quick flat no over the other alternatives (other than yes) any day.
thanks
Like in the Oasis album title "Definitely Maybe"... eternally delayed judgement is not of much use.
Why not tell someone what you wished you saw? Why not tell someone what they could do to make things better? Why not suggest a specific deliverable that someone can provide (including a different founder) to improve? Why not make an introduction?
Fred and I met and I received feedback (that I did not take as a "no") that the market for my idea may not be large enough. Perhaps I am naive or perhaps Fred was being polite, but nowhere in our hour-long conversation did I hear "no" in what was said.
I'm sure "no" is a one-word metaphor for "managing expectations" or some loftier term, but in my experience, the best way to say "no" is not to say it at all. Offer a "wish list item," an alternative approach, or perhaps someone else who can be helpful. Such a "re-routing" may not always be available, but it will likely take just about as much time to type and/or speak, provided the willingness to give thoughtful feedback is there.
fred
Has something changed in the industry since I've converted to bootstrapping, or are you planning on starting a new trend?!
I was talking to a perspective partner a couple of months ago and got a no. She basically said "Look -- it's a great idea, but I just can't get excited enough about it to join into a partnership."
That was great feedback. Simple nos are fine, a sentence or two is terrific. While nobody can give up on an idea but the entrepreneur himself, the more honest feedback we get the better decisions we can make. That's good for everybody.
Yeow.
I agree with the comments above that saying "maybe" or dishing out "silence" are the worst things that VC's can do.
I think that "maybe" messes up the flow the worst - From the requesters point of view, if there is even a slight chance the the VC firm is considering the proposal, then things slow down while waiting for a response.
I have heard "no" a bunch in the last year, but mostly I have received "silence" - the silence makes me nervous because I figure that my idea is a good one, and that they're asking around with people they know if duplicating my process/service is possible.
Of course, I remain hopeful when I can read the headlines on TechCrunch and see others getting funded for ideas smaller than mine. Persistence is a blessing and a curse.
-- "Psycho Killer"
Talking Heads '77
-- "Burning Down The House"
Speaking In Tongues
--"Once in a Lifetime"
Remain in Light
It isn't what you hoped for, is it?"
-- "Memories Can't Wait"
Fear of Music
I've worked a lot of places in my career, and consequently have done a lot of interviewing. And I have to agree, most companies (both large and small) are extremely rude about saying no - or even getting back to you at all!
That *really* ought to change. It's extremely unprofessional in my book, and reflects badly on the organization.
You're in a service business... if you help out an entrepreneur now (and not just blow smoke like 99% of VCs out there), that entrepreneur will be more likely to want to work with you in the future.
I think the responsibility lies on both parties and more with the one listening to the No - if they can make the person giving feedback comfortable about it, you will increase your chance of learning and practicing kaizen. A good No almost is better than a Yes - you have a problem to solve and you will probably come out stronger if you have the right attitude. Smooth sailing never teaches you anything.
Clearly the people are the most important followed closely by product and
market.
And we do care what price we pay.
I wish I could tell you that we have a specific way that we look at each and
every deal, but we don't. Each one is different and we analyze them
differently.
fred
Youre talkin a lot, but youre not sayin anything. - psycho killer
This might be a fun thing to keep up in the comments of this blog going
forward
fred
If you are not confident in the founder/CEO then I think it's perfectly fine to tell them that by saying something like "I think you need to add xyz skills to make this a deal one we are interested in evaluating further." A true entrepreneur (IMHO) will say 'OK, thanks let me work on that and I'll get back to you if it makes sense.' I think many entrepreneurs think they have to force a fit (just for $$) where there just may not be a fit and just like in many relationships if you force a fit in the short term...it can go sour b/c both parties weren't at least 95% bought in on a) the company, b) the mgmt, or c) the market. Make friends, keep them posted, and if not this deal then another deal you are involved in the future might make sense and be a better fit.
" ... in a perfect world, if an idea from an entrepreneur is not ready for funding, VC's should simply tell them to go away and come back when it is ready. But the problem with VC’s is that ... while their instinct might tell them that I stink, their intellect would convince them that they might miss out on the next Google. So VC’s will never actually tell me to go away. Instead, they will hover around and keep me at a sniffing distance until they are convinced that I will never get funded by one of their neighbors."
How to Turn Your VC into Your Worst Enemy
http://www.lovemytool.com/blog/2007/10/vc-worst...
--Denny--
At least if after fews "no" with the same reason I Cannot run the company, I'd start to look for someone who could run the company.
That's better than "waste" your time trying to get a VC to invest without knowing why they all say "no"
It's one thing to turn down an idea or a market, but it's a pretty harsh blow to turn down a person, and tell them to their face. At least explain to the person why there is no confidence: i.e., lack of track record, questionable hires made to date, etc.
Pete