Mike here. When I was fundraising, I carried a chip on my shoulder. In fact, I literally kept a running list of all of the investors who passed on me so that I could prove them wrong.
I’ve come to learn how counterproductive it is to have a chip on your shoulder when fundraising, and how practicing empathy towards investors is far more productive. Recently, I’ve talked to founders recently who carry bitterness towards investors who have passed on them.
The truth is that all you need are a handful of “yes’s” in order to raise your round, and the “no’s” don’t matter at all in the end. And there are so many investors out there that any mental energy spent on investors who say “no” is a complete waste.
In fact, if you zoom out, no matter how high your conviction is, a majority of investors should say no to you. We tend to lump “investors” into one big group, when in reality there are hundreds of different ways to classify investors. They have different spaces they prefer, different risk profiles, different backgrounds, different preferences, and different ways of operating. With all of the different types of investors out there, less than 1% of investors are actually a good fit for your round.
That’s why when you’re fundraising, it’s far more productive to practice empathy towards an investor than it is to fundraise with a chip on your shoulder, as it will accelerate the time it takes for you to find the 1% of investors who are a good fit.
Being an investor is hard. They have to sift through a lot of noise, many have Limited Partners to answer to, and they’re trying to find the right risky bets to take. Rather than trying to pitch every investor on your business, instead work to better understand how they think, the types of investments they like to make, and what their incentives are. By practicing empathy, you’ll learn how to pitch the investor the right way if they are a good fit, or you’ll be able to build a long-lasting relationship with them even if it’s not a good fit.
If you don’t practice empathy, then you won’t know the types of investments the investor likes and you’ll end up wasting energy trying to fit a square peg into a round hole. When founders complain about getting strung along by an investor or carry bitterness after hearing a “no” it’s usually because they haven’t put themselves in the investors’ shoes.
If you show empathy towards investors and embrace the fact that you will not be a good fit for most, then you will be able to more rapidly find investors who are a good fit. Investors are far more likely to help make introductions to founders who “get it” than for founders who clearly don’t understand how seed stage investing works and are forcefully trying to sell them.
Don’t have a chip on your shoulder when fundraising. Embrace the “no’s” and let them roll off your back, so you can keep moving to find those few “yes’s” you need.
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