Update below with the final email in the chain where the entrepreneur apologizes (and talks about some challenges around fundraising that led to his frustration).
I just tweeted about an unfortunate email exchange I just had with a company founder, but 140 characters isn’t enough to really do the matter justice. And more important than my venting (and to be clear this post is definitely part that) is the real issue that many entrepreneurs face about how to handle a “rejection” email from a potential funder. This is an example of how not to do it.
I pride myself on answering all the legitimate emails that I receive (punctuated by the point that it’s 8:24 on a Tuesday night and I’m sitting here at my desk doing just that). I think this is getting more common amongst VCs, but I do hear from a number of entrepreneurs that they send notes off and get nothing back. I figure everyone who emails me their plan is really excited about what they’re doing and deserves a response. Sometimes it’s a quick no, sometimes it’s more extensive if I have an idea that I think is worth sharing back.
From the entrepreneurs perspective I can understand the frustration of hearing that the idea that you’re so excited about isn’t something that whoever you emailed wants to hear more about (and I can relate – Foundry raised money from investors and got plenty of “no’s” before we managed to pull together a syndicate of fund investors). But the reality is that not everyone shares your passion, not everyone is at the right time in their fund, not everyone has time vs. other things their looking at to take a closer look, etc. And with most firms having some kind of focus, there are plenty of ideas that simply fall outside of a firm’s investment bounds. And, of course, the math makes it hard as well. At Foundry we see something like 5,000 business plans every year of which probably 500 or more are clearly plans that will get funded by someone. So there is no lack of really interesting things to take a look at. But there is a lack of time and money. In our case that means making about 8 new investments a year (give or take). I’m sure many firms have a similar funnel.
Nonetheless, handling a rejection is important. Done well it can keep the door open to further engagement (I’ve had plenty of companies that I’ve turned down drop me notes with updates on their progress and asking me questions or advice) and can sometimes lead to a later investment (we have a company in the Foundry portfolio that we (I) turned down that we funded several years later). I strongly believe in the “no assholes” rule and try to live my life by it.
Below is the exchange in question (personal details redacted), posted in all its glory. Ironically in this case it looks like this is someone I gave some advice to about a prior business plan (I don’t remember the details – it was one of thousands of these sorts of emails that I have responded to over the years). Oy!
Our social site based on privacy never went anywhere.
We were right about the privacy stuff. But no one cares. Oh well, win some you lose some. I’m proud we did it, no regrets.
Check out our site:
We make money, been around a long time, our customers love us.
There’s a big opportunity we need help with (not sure if that’s the right lingo or not).
My initial response:
Sorry that the [redacted] idea didn’t take off. It’s hard to get people interested in a new social networking idea these days (even those who say that privacy is important). Good for you for moving on to something else.
.[redacted] is definitely novel, but doesn’t really fit our investment focus (see www.foundrygroup.com/themes). Big opportunity is definitely the right lingo (and what you’re searching for…).
And then this is what I get back:
Be honest.Did you even look at the site?
Just worked out a deal today that leads us into one of the two largest captive auto lenders and one of the three largest banks in the US.
But you’re not interested.
Go see the movie “Twenty Feet from Stardom”.
Then get that funding is more about who you know, pedigree, etc., than anything. Get how many talented entrepreneurs there are out there, that don’t make it. For no other reason, then they’re on the outside looking in.
One of these days, I’m going to write about it.
I could have a cure for cancer, you wouldn’t give us a dime. Because you don’t know us, you don’t anyone who knows us, and in my case, I’m too old.
You know how you could make the planet a better place? Start telling the truth to people.
I’m not angry, at least you were kind enough to reply.
or just be.
Obviously it totally pissed me off (thus the tweet and the rant here). This was my response:
I’m debating whether to answer or not given the tone of your email. But I didn’t want to let your belligerent, tactless note pass. I did look at the site – and you have no reason to rudely call me out on having not done so. If you looked at our website you’d understand why this isn’t a fit for us (seewww.foundrygroup.com/themes – we’ve written extensively on what we’re interested in and what we’re not). And yes – if you had a cure for cancer we wouldn’t be a good target for you because health sciences isn’t in our investment focus (which, again, you would know had you done any research on us). We get over 5,000 business plans submitted to us each year (and fund about 8 new ideas). That’s why we’re so deliberate about what we’re interested in (and good at) and what we’re not. We have entrepreneurs of all ages and “pedigrees” (whatever exactly that is). And have funded people we’ve never met before or who don’t have 1 degree of separation with us. You can believe otherwise if that makes you happy. But there’s no need to be an asshole about it.
Good luck with your idea and with your life. I’m sorry it has left you so bitter and angry.
Postscrip below. Final email from the entrepreneur below. Felt that I owed it to him to include it here.
Yes, rejection sucks.
Yes, I have feelings about VC’s that are…real for me and plenty of others.
For me, they come from how I grew up, poor. They emanate from coming into the tech world in 1988, the hard way. From being turned away at the door so many times, because I didn’t go to Stanford, didn’t come from the right family, didn’t have the right friends.
All these years I’ve financed my business with SBA and bank loans. So has everyone I know. So I don’t know anyone in the venture world, neither does anyone in my circle. You have no idea, how hard it is, to break into this world of yours from the outside. Nowadays, it’s just impossible. Throw in that I’m 54 now…
There’s discrimination in the tech world now. The tech world makes those on the inside richer, and it keeps those on the outside — there. It never used to be that way and yes, I’m angry about that. I need to deal with it.
No one talks about that the chances of getting funding if you aren’t in the know (went to the right school, worked for the right founder, know people in the VC world), are older, are slim and none. Instead, the VC’s have websites that create a false sense of hope. It’s bs and no, I’m not going to apologize for the truth.
That’s what you should write about. That’s, what no one writes about.
But I do apologize for making you wrong. You do what you do. I need, to deal with it.
Go see the movie. I drove two hours to see it. Background singers and entrepreneurs on the wrong side of the tracks, are on the outside looking in, have so much in common.
You’re right, I got anger.