The "No" part

A couple of people asked me how I say no.  I know, it seems funny, but  both of these young entrepreneurs were trying to understand why no gets translated into everything but no.

Here is an email I sent to a company moments ago. My comments are after the email.

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From: Rick Segal
Sent: Thursday, April 05, 2007 1:35 PM
To: David 
Subject: Meeting

 

Hi David,

 

NEWCO was reviewed at our partners meeting on Wednesday.  Unfortunately, we have to pass. We’ve got a number of active deals going on and do not have the resources to devote to this opportunity.  It is in no way a reflection of your opportunity, simply a matter allocation of people/resources in our firm.

 

Thank you for thinking of JLA, I appreciate you letting me take a look.

 

Best regards,

 

>R<

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There are a couple of things I didn't do. They may seem rude but they are done to try and be clear about our firm's intentions.

 

"We have to pass." and not "We have to pass for now."

 

It is the "for now" part that I believe may confuse people.  I don't say, I'd be interested in hearing about your progress, let's continue the dialog, keep in touch, write often, etc.  I don't do that because the smart folks will do that anyway.  They will send email with an update, I'll respond with congrats, they ask if there is an opportunity to re-open the discussion, and there you go.  

 

I try to always answer email, always be polite and always be clear on our intentions.

Comments

[Marcelo Calbucci]

Good stuff Rick.

I received both responses in the past: "we pass" and "we pass for now", and of course, all the variations like "call me as soon as you get more traction".

My interpretations of those are exactly the same, along the lines of "we are not interested now, but if things change dramatically we should talk again".

I never take a "we pass" as a "we pass forever". VCs are investors, and I expect them to know that if you had 1,000 users a few months ago, and suddenly you have 100,000 users that you are into something potentially big and they will want to hear back.

On the other hand, I had worse answers than that, indirectly of course because some VCs are dumb enough to not tell me what they are thinking but to tell someone really close to our business.

We had VCs that not only didn't take time to understand our business, but guaranteed that we couldn't succeed, or that XYZ was doing exactly the same thing ("how would you know if you never looked at our service?"). Or that passed, heard of our decent growth, called us back just to dismiss us again.

We have a least of VCs on our blacklist. Some that we didn't even meet face-to-face but that were "not nice" through email or phone. In case we get multiple term sheets on the table (and we will at a not so distant future) the blacklist-VCs will need to offer significantly better deal to compete with a nice VC.

It is not all about the money.

[Bobby]

Rick -- I think your response, especially if offered quickly, is perfectly fine and what's more, probably very accurate:

While there are lots of reasons to pass on a deal, I wonder if a large number fall into the category of, 'we're not too savvy on this sector, it doesn't excite us and we're just too focused on the things we like to spend time understanding the sector and then evaluating your deal'.

My belief is that a fair number do fall into that category, and instead of a 'no', entrepreneurs get a 'no reply' because the VC probably doesn't have a rationale for the rejection that would help the entrepreneur.

In any case, most successful entrepreneurs will press on, no matter how many 'no's or 'no replies'.

Thick skin is a success-linked gene.

[Paul Kedrosky]

Hey Rick --

While I take your point, I actually think the "we don't have bandwidth" answer is too often a cop-out. I'm speaking entirely for myself here, but waaaaay too often we're afraid of saying what we really mean -- which is usually some more or less polite variant of "this doesn't match our interests, sorry" -- and so we get all PC, vacuous and puffy instead, and say things like "we don't have time".

Sure, sometimes we really don't have time, and we really do want to stay in touch, but that's far less often the case then answers from VCs suggest.

P.