Founder Topic

How do founders survive investor rejection — and judge a term sheet?

What the archive teaches: volume and rejection are the baseline — Nate Spiteri contacted nearly 1,000 investors and heard "95% no's"; Rakhesh Martyn pitched four to five times a week for eight months. A bad term sheet can be worse than no term sheet — Rakhesh refused his only offer because of the dynamic it would lock in, and 16 days after meeting the right fund he had a better one. Keep the no's close: Nate sends investor updates to everyone who passed, and they come back. And when nothing lands, fix the story, not the optics — "at the very, very early stage, you are the reason they're investing."

The fundraising stories founders actually need aren't the 8-day rounds — they're the eight-month grinds. This hub collects the archive's hardest-won fundraising lessons: a founder who pitched 1,000 investors, one who refused his only term sheet, and the diagnosis that finally fixed a pitch that wasn't landing.

Quick answers

When should you walk away from a term sheet?

When the dynamic is worse than not raising. Rakhesh Martyn's lawyer told him his only term sheet after eight months "isn't very good, and because you don't have another one, you have no leverage." He refused it: "I felt like I would actually rather not start the company than take that term sheet." The right fund issued a better one 16 days after their first meeting.

How many investors do you actually need to talk to?

More than feels reasonable. Nate Spiteri reached out to almost 1,000 investors for Shopfront's raise and dealt with "95% no's" — he'd returned to Australia with a "super thin" network and had to brute-force his way to the right investor profile.

What do you do with investors who said no?

Keep them on the update list. Nate sends monthly updates to everyone who passed — many were wrong-stage passes, and a lot have come back as the numbers grew. Those relationships are the pipeline for the next round.

How do you fix a pitch that keeps getting rejected?

Rakhesh's diagnosis after eight months: "I spent too much time solving for the optics rather than trying to build a great story of the company that I wanted to build." The fix was putting the founder at the centre — "at the very, very early stage, you are the reason they're investing." And don't anchor to a valuation early: Robert Huynh says Nook basically picked $20M from the middle of a range their VCs suggested, a decision he cautions against.

What founders in the archive say

EP 31
Rakhesh Martyn · Hachiko Energy

Battery Storage Founder: 8 Months of Rejection, One Term Sheet He Refused

Made redundant at 28 and scrubbing dishes in a central London kitchen, Rakhesh Martyn rebuilt himself into the founder of Hachiko Energy — surviving eight months of investor rejection, refusing the only term sheet on the table, and getting a term sheet from the right fund just 16 days after meeting them.

8 monthsof fundraising, pitching four or five times a week at a minimum, before the first term sheet — which his lawyer said wasn't good
"I was just looking at a sink full of dishes and I was scrubbing them and I just looked at my hands and went, Jesus Christ, how did we end up back here?"— Rakhesh Martyn, on his July 2016 epiphany at Muriel's Kitchen (02:57)
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EP 3
Nate Spiteri · Shopfront

I Spoke to 1,000 Investors Before Raising. Here's What Nobody Tells You

Nate Spiteri raised 800 K for Shopfront in December — the month every investor told him a round could never close. To get there, he reached out to almost 1000 investors and treated fundraising like a sales pipeline.

800 KRaised for Shopfront, closed in December in a tough funding environment
"It's very hard to, like turn a side hustle into something that's venture scalable. because there's a lot of work that needs to be done before you even think about generating any revenue."— Nate Spiteri, on why building part-time doesn't work (06:41)
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EP 29
Caroline Tran · Hello Clever

$15M ARR Fintech Founder: I Found My First Customer on Facebook

Caroline Tran was building a payments company with no payment background. She started a consumer cashback app, ran out of money, pivoted, and found her first paying merchant on a Facebook group — today Hello Clever runs at $15M ARR, processing payments across 20 countries.

$15M ARRHello Clever's annual recurring revenue
"hello clever is a global financial uh payment technology company"— Caroline Tran, on what Hello Clever is (00:56)
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EP 24
Nam Nguyen · TruthSystems (YC S25)

How He Turned 3 YC Rejections into a $25M AI Governance Company

Nam's co-founder was 19 years old. Law firms told them "come back in 5 years." They applied to YC four times. When they finally got in, their $4M round filled in 48 hours. TruthSystems is now the AI governance layer sitting inside law firms in real time.

$4MSeed round filled in approximately 48 hours after YC acceptance — Sunday night to Tuesday night.
"We had firms tell us, "come back in five years. Come back when you are Microsoft-sized." When you're that young you actually don't get a lot of benefit from the imagination. We realised we had to remove imagination from the equation — less vision, but actually more of the product."— Nam Nguyen, on selling AI governance as a 21-year-old (05:23)
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