How do founders handle investor rejection?

There were several moments Rakhesh thought the business was over. The first: after eight months of fundraising he finally passed an investment committee and was elated — then his lawyer read the term sheet and said "I don't think this is very good, and because you don't have another one, you have no leverage." His conclusion: "I felt like I would actually rather not start the company than take that term sheet." That was a bad day — "I thought, why is this ever gonna happen?"

The worst day by far was in August, five months in. An angel investor he'd cultivated — a big name in the industry who would have brought other investors with him — called to pass, with reasons that didn't make sense to Rakhesh. When he tried to discuss it, the angel said: "I haven't called you to have a discussion about this. I called you to tell you that I'm not investing." That was the day he asked himself "have I even got the right idea here? Is this ever gonna happen?"

What the rejections taught him became the pitch that worked: "here's the team that's gonna make this product happen, here's the traction we have already, and here's why we need the money now — it's a problem that can only be solved with capital and not time."

Jevon points out the odds are brutal — making an investment "knowing that like 90% of the time or 95% of the time you're gonna fail" — and calls startup founders "absolutely crazy" for taking them on. What gets you through, he says, is your North Star: a sense of purpose and vision that's "so intoxicating." He'd just been talking with a founder fresh out of an accelerator who was out raising and "not getting a lot of yeses," and his answer was simply to keep going.

Robert points out that for a VC, "most startups do not make it. In fact, it's almost built into the model" — the goal is the one that hits a unicorn, and a company that just returns its money isn't a win for them either. So the way to manage investors through hard news is "just being really clear and transparent with their communication" and keeping them in the loop so "you don't surprise anyone" with monthly and quarterly updates. He adds a warning: "No one cares that you failed except yourself" and the people who didn't have a ton of money but invested anyway — so "You want sophisticated investors."

Nate describes being constantly bombarded with no's — on calls, on LinkedIn outreach, everywhere — because it took a long time to get the first yes. His approach was to stay relentless: "I was like very relentless in our process of outreach. Like, I wasn't I almost wasn't letting the nos affect like the next step. It was just like, okay, no, let's move on to the next one." He also reframes the negativity as fuel: you go through "that shitshow of a process" with all the constructive-but-negative feedback "and then kind of come out the other side resilient and ready for the next one."