A lot of times the answer will be a no…
Rejection is something most founders experience frequently. Be it a potential new client, a very interesting strategic partner for your startup or a venture capital investor — dealing with rejection is common as founders typically put themselves “out there” and sell their vision to others. This is especially true in the early-stages where there is often a lack of resources, a (very) small team executing the MVP or even a complete lack of a product.
Startup founders risk getting rejected more often than other “jobs” due to the sheer risk that is perceived by customers, investors, potential co-founders etc. Founders are often-times the face of their startup and everything they say and do represents their venture. People making an evaluation of your startup certainly do so by including you in their evaluation. Unfortunately, not everyone deals with rejection in the same way. For some it can be a very emotional process of sadness, fear and inadequacy which may even lead to imposter syndrome. Hearing that your idea or business model is “not ready yet” or “won’t ever work” can be very harsh for some. The amount of effort it takes to raise your first round of funding or close your first ten customers is typically a lot. Dealing with failure after all that effort can certainly be demotivating. So how can first-time founders that are working on their startup deal with rejection from others?
Keep Calm
Coping with rejection can be a very emotional experience for many founders. Frustration, time invested and expectations can lead one to lose character and have a negative reaction when receiving a rejection. Taking it personally and “attacking” the other person is a major fallacy. Founders should always strive to refrain from doing this, especially during communications (be it during a call, via messages or email). Not only does it leave a bad impression on the other person but it also has a negative effect internally. A co-founder or team member might not want to continue to work together as it may be seen as being unprofessional and even disrespectful (in some cases).
What to do instead? Startup founders can always choose not to reply or thank the person for their time and simply move on. Losing character and lashing out on a customer or a potential partner due to frustration is not the way to go. In today’s world, an investor that says no today, might be saying yes tomorrow. This is very true for seed-stage startups that lack traction or P/M Fit for example. In some cases, a founder could get rejected for their first venture but get a term sheet for another venture they start later on from the very same investor they spoke to before. However, burning the bridge might mean losing a contact in your network as well as a future potential investor. So whatever the situation, stay calm first!
Develop Resilience
As founders go through their entrepreneurial journey and experience rejection, they tend to develop resilience. This means not putting all their eggs in one basket or knowing that lengthy discussions with a potential investor doesn’t always mean that they will actually invest at the end. Being able to manage your expectations better helps to develop resilience and deal with rejection as it comes your way. Changing your mindset and not taking things personally is a big step towards this.
What often helps is realizing the perspective from which the other party is coming from, i.e. how are they looking at things?
A startup usually has very little history, a lack of clients/portfolio, partners, investors, advisors etc. who can be a point of reference for someone to evaluate. This often means that you’d have to make a judgement based on what is being presented in front of you. Given such limited information, many people choose to stick with what is familiar to them and avoid the “unknown”, in this case your new startup. Others of course would still be willing to take the risk and collaborate to “see how it goes”.
The most important ingredient for developing resilience is to not give up. Doing your outreach, placing cold calls, sending cold emails — it’s all part of the process. While the first few rejections can be very disappointing, as you move on, the weight of the rejections usually becomes less, allowing you to spend more time working on improving what you are doing, be it pitching your startup to investors or winning customers over during a sales call for a pilot project.
In addition to building up your resilience, asking for feedback is also a great way to cope with rejection!
Ask for Feedback
Asking for feedback can be a great way to get some insight into what is working and what is not working for you. For example, when looking for a vc to invest in your startup or a new customer — it can be very insightful to know why the investor or customer rejected your startup/offer.
When getting rejected by an investor, a founder can learn about things they may not have been aware of previously.
For example, their way of presenting the startup, their (quality of) answers provided to key questions asked, the business model or even simpler things such as the founder’s attitude or perceived personality. Early-stage investors very much look at the team and the qualities of the founding team. This also influences an investment decision and can even be the deciding factor for some vc’s. When asking for feedback, politely thank the other party for their time and ask what could have been improved or done better. Some vc’s are passionate about what they do and some are very generous with their time — willing to provide such valuable feedback.
Share Your Experiences
Talk to other founders! Sharing your experiences with others helps to confirm things and get a better idea of how to move forward. For example, if everyone got rejected by a certain angel investor (due to the same reason) then it might help in changing your mind and/or points of view on the rejection received by said investor. Being able to attend networking and/or startup events and discussing things with other founders or even investors, mentors or advisors can be of major help and a kind of therapy in a sense. Discussing how you feel and what your experience was can help you to gain insight into how to go about things next time without the fear of being rejected. This is especially helpful for startup founders who are not yet comfortable when dealing with rejection. As a first-time founder, learning from founders working on their 3rd funding round or even 2nd startup can be a great learning experience.
Be Open to Change
Working on a startup means that things are always changing and developing. This means that ideas are constantly getting challenged and changing. For founders, this means not getting married to any idea and realizing that your initial idea/business model can change as you move forward. Talking with customers, users, investors, partners etc., all helps to develop an initial idea about your business model, product or strategy and build it up further.
This can result in a new and improved idea or realizing that you need to go back to the basics and re-evaluate your entire venture again. This cycle is key for any startup founder and helps to test and improve ideas until they are confirmed to work. Achieving P/M Fit is an example of just this. Many founders end up doing a changing their business models several times along the way and some even end up doing a pivot and develop an entirely new focus or MVP. Hence, not being afraid of rejection and failure is a prerequisite for being a startup founder. It’s very much necessary to test out ideas, being willing to receive criticism and feedback in order to change and/or improve your startup.
Closing Remarks
Everyone is different. As such, founders are different. Not everyone deals with rejection in the same way. For some it might be a brief thought — moving on right away, while others are more affected by rejection and take more time to process what happened. Regardless of this, asking for feedback, being open to change and developing resilience can help founders become better at what they do and gain more experience as they go. However, it’s key to realize that you are in a learning process as a new startup founder. You gain experience as you go and build up your skills from those experiences. As such, don’t fear the big “NO” but try to turn it into a potential YES — remember it’s all about your attitude! There are countless examples of founders who were rejected by vc’s only to end up being very successful in the end.
Here at N3F Ventures, we understand that it takes a lot of effort to build something great. Having been on the other side of the table ourselves, we always aim to listen to founders and find ways to collaborate together on their startup. If you are working on an exciting early-stage startup, feel free to get in touch with us and let us know how we can help build your vision.
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