7 Ways I Try to Say ‘We’ll Pass’

As a founder, I was trying to raise money for a good amount of time. And by a good amount of time, I mean all of the time. I spoke with a lot of investors, shared my vision and put my heart out on the table. My heart, man! I received many ‘we’ll pass’ emails and these emails have had a profound impact on the way I speak with founders today on the other side of the table. I always respected and found to be extremely helpful the emails from investors explaining why they passed; although I took it personal, it was much better than a quick and abbreviated one sentence ‘We’ll pass’. Based on my previous experiences, here are 7 methods that I use when passing on investments in the most beneficial way for the founder as possible:

1. I Don’t Want to Waste Your Time. If this is something that I a) don’t understand or b) can’t add value, I say it upfront. Additionally, I always tell the founder that we’re going to pass or move forward with discussions/investment/request additional docs in some capacity after the first meeting.
2. Be Candid and Blunt. The best criticism is the most honest; and at the end of the day, who really cares what I think? I’m probably wrong most of the time anyways.
3. Ask to be Helpful. It sounds a little odd, deciding to pass for an investment and then saying ‘…but how can I help?’ but who cares. You just let me hold your baby and told me your dreams; this doesn’t end there. And who knows what you’ll build next?
4. Explain Why I’m Passing. Hopefully it can be helpful, as it provides a different perspective on the opportunity. If nothing else, it reaffirms that I can’t add value or be of any help; which means that we are both doing something right by moving on.
5. Sharing Initial Concerns. I’ll tell you right away what I’m concerned about; why hide that? It will hurt your feelings? Feel awkward? I don’t believe that’s helpful for anyone. If you can address those concerns, awesome, let’s do this.
6. Quick Follow Ups. I try to follow up with initial discovery meetings within 2 days at the most. The reason for this is a) I know immediately if I can add value b) I know if I understand the company/landscape and c) I’ll think you’re a 100% badass-amazing-inspirational founder who I believe in.
7. Making Introductions. ( I do this both before and after I decide to pass). Some founders have a concern; why would you want to pass along to VC XYZ if you’re passing? 1) It fits their focus/thesis better than mine 2) Curated and relevant deal flow helps everyone 3) Warm intro’s to VC’s help 4) Who cares if I’m passing? Who am I? I think the best investors make their own decisions and as long as I provide full transparency as to why I’m passing, this introduction can hopefully help.

Providing a clear and definitive No to founders is difficult, but I think it’s the best thing to do. Obviously, it’s easier said than done- so my actions will have to reflect this. I received way too many No’s from investors so I try to give a helpful insight into why. If you’re a founder, what else do you want to see or hear from investors when they decide to pass? If you’re an investor, do you have any other methods that you use when deciding to pass? Comments below would be great!