Why is it so hard to close VC funding? I feel like it’s an impossible hurdle to overcome.
by Naomi Kokubo, Cofounder of Founders Space
Don’t give up. Every single time my partner and I went out for venture funding it felt the same way. Between us, we’ve started and gotten funding for three separate companies, and each time we had a moment where we felt like you do. But we kept on pitching because we believed in what we were doing.
Let me help you understand why it’s so hard:
Let’s say you’ve got some traction and a promising business plan. Well, it’s still hard, and here’s why. Most VCs won’t invest in your company if a single partner (or even an associate in the VC firm) doesn’t like the deal. VCs are looking for a reason to say, “No, we can’t do this deal.” They are inundated with startups trying to get their attention and money, and they need to filter out the less appealing ones as fast as they can. So if a single partner objects to the deal, it’s dead.
This can be very frustrating. After countless meetings, you can make it all the way up to the partner meeting, only to have your deal killed by one naysayer. Unfortunately, that’s how it works. In most cases, you need to get every partner onboard, and this can be a high hurdle for many startups. One piece of advice I can give you is to keep revising your business plan as you get feedback. If someone pokes a hole in your plan, then make sure you fix it before you go to your next VC meeting.
Above all, don’t give up! You’re the only one who can truly say, “it’s over!” — and it’s not over until you no longer believe in your business. I hope this helps.