Why Being Told ‘No’ Over and Over Again Should Motivate You in Your Search for Funding

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As an entrepreneur, it’s good to get used to listening to “no.” Investors will let you know “no” whenever you ask for funding — usually over and over once more. That’s a problem that the majority startups should face in the event that they need to survive lengthy sufficient to start out making income.

One in four startups by no means obtain the funding they want for their services or products to take off. Fifty-seven percent of founders finance their companies utilizing private loans or their very own cash till they’re in a position to safe that first spherical of funding.

If you are a first-time founder, it may be laborious to adapt to listening to no after “no.” However, a “no” does not imply that you do not have a viable enterprise. It implies that you have not discovered the suitable buyers and that it’s good to higher put together for your subsequent pitch. Below are some tricks to get you began and the best way to use these rejections to your benefit.

Related: 5 Ways to Keep Moving Ahead After a Rejected Pitch

Learn from the startups that got here earlier than you

When you are beginning a brand new firm, you do not need to take into consideration the a whole lot or 1000’s of companies that fail yearly. Some of probably the most promising tech and merchandise in the world could by no means have taken off just because they could not shut their funding rounds.

The huge entrepreneur success tales are few and far between. Some of the most important success tales come from companies and founders that had been turned away by buyers at each alternative earlier than hitting it huge.

Before Google grew to become a search and adverts large, they had been keen to promote the enterprise for one million dollars, as a result of they could not safe funding. Five months later, they managed to lift $25 million. Netflix is one other in style story of a startup that just about bought however as a substitute stayed the course till its IPO — the place it raised $82.1 million and obtained a $309 million valuation. Two years earlier than that, the founders tried to promote to Blockbuster for $50 million after its progress began to stall. Luckily for them, Blockbuster advised them “no.”

Not each enterprise might be Google, and it is important that you’ve a sensible view of what degree of fundraising you’ll be able to convey in based mostly on the merchandise and companies you provide. You won’t get dozens of hundreds of thousands of {dollars} in funding, however when you’re assured in what makes your startup distinctive, you need to be capable of discover buyers who belief that imaginative and prescient.

Related: Watch: Why Entrepreneurs Should Be Open to Negotiation and Even Rejection

Previous failure will increase the probabilities of a startup succeeding

It’s generally recognized that numerous startups fail. Some statistics put failure charges for new enterprise ventures at around 90%. Interestingly sufficient, that fee of failure holds across most industries.

An fascinating statistic is that in case your startup fails and you determine to strive once more, your probabilities of succeeding increase significantly.

One purpose why that holds true is as a result of the extra instances you hear “no,” the higher you turn into at coping with corporations and buyers. If you’ll be able to take listening to “no” 100 instances and maintain asking the suitable individuals for cash, you’ve gotten the thick pores and skin {that a} founder must succeed. Some of probably the most well-known companies at this time had been advised “no” a whole lot of instances, and now they’re on the prime.

During a dialog about IPOs, Jacklynn Brennan, co-founder of Fylí, mentioned not letting rejections from buyers damage your imaginative and prescient. From her perspective, a “no” is simply a place to begin for negotiations. Even when you get spherical after spherical of rejections for an concept, it does not imply that your subsequent undertaking is certain to fail.

One wonderful statistic is that serial entrepreneurs have a a lot greater success fee than first-time founders. Around 80% of unicorns (extremely valued startups) are based by entrepreneurs with expertise launching a minimum of one firm. Moreover, buyers perceive how helpful that information is. The extra skilled the founder, the extra probably it’s that buyers will take you critically.

Related: 3 Entrepreneurs Share How They Got a VC to Say ‘Yes’

Get snug pushing for a “no” from buyers

One of the most important challenges in elevating funding is that many buyers will not merely come out and say “no.” Instead, they’re going to woo you with guarantees of future conferences or investments down the street.

A standard attribute amongst profitable founders is that they don’t seem to be afraid to push for actual solutions. “Push,” does not imply you have to be calling VCs in the nighttime or sending emails to their private handle. What it means is that you needn’t be afraid to push to speak to the suitable individuals and get direct solutions from them.

Individual enterprise capital corporations get over 1,000 proposals per year. That means they must be aggressive when choosing the right companies to take a position in. However, most individuals you discuss with may not likely perceive what units your small business other than the opposite pitches they get. As a founder, it is your job to push to get a solution from buyers, and that includes:

  • Following up after conferences

  • Submitting any info and due diligence that they request from you

  • Asking to see how the approval course of works, so the place you are standing

Being extra proactive implies that listening to “no” may come sooner, however that frees you as much as chase different funding alternatives. You in all probability have numerous “no” forward of you earlier than you get to the suitable “sure,” so you need to get the negatives out of the way in which as early as potential.

While you adapt to listening to “no” ceaselessly, it is necessary that you do not overlook the best way to refine your small business pitch. Every assembly with an funding agency lets you refine your pitch even additional. If you are utilizing the identical technique and speech for each investor, and the response is not good, the issue is perhaps the pitch itself and not you or the enterprise fundamentals.

No one likes being advised “no,” significantly when you’re asking for cash. However, if you are going to ask buyers for giant sums of cash, listening to “no” comes with the territory. If you’ll be able to’t deal with the rejection, it is unlikely that your small business will succeed over the long run.

As an entrepreneur, it is essential that you simply perceive that “no” does not imply that your small business is not viable. If you are assured in the merchandise and companies you are providing and their place in the market, you may must be persistent in convincing buyers and corporations to place their religion in you by studying from every “no,” pushing for clear and concise suggestions from buyers and persevering with your pursuit!

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