178 No’s (and 22 Yes’s)

I’m the CEO of a Silicon Valley-based technology company called Inkshares. We publish books. Throughout our three-year tenure, we’ve had a lot of investor meetings.

A lot.

And when I hear people say something like “choose your investors wisely,” I just smile and shake my head. Being in a position to actually choose who “gets” to invest in your company is something that a handful of startups experience.

Most of us have to fight to fill our rounds.

I think it’s important that we tell the real story of what it’s like to start up in Silicon Valley. There is no romance here. There is only grit, timidity, will power, depression, determination, self-doubt, animosity, camaraderie, rejection, and acceptance — with each of these manifesting every day.

No

Inkshares has heard “no” from 178 institutional and angel investors. Yes, maybe we’re just bad at pitching (judge for yourself — I’m the first to pitch). But I think I think I’m being objective when I say it’s just hard to fundraise for most startups.

Here are some actual emails we received where investors passed.

“Publishing is a curse.”

Jeremy

I have an extensive knowledge of the publishing industry which is a blessing and a curse I just don’t see the ROI here for numerous reasons We’re going to pass

“We’re cheering for you from the sidelines.”

Hi Jeremy,

Please to e-meet you, and thanks for following up. After taking a look, we don’t believe that the business is a good fit for us at this point and want to be respectful of your time. We’ll be cheering for Inkshares from the sidelines.

Good luck!

“Well, I just don’t feel like it.”

Jeremy,

I agree with you that what you are doing is a market need.

At the same time, for whatever reason, I don’t feel the gut level of personal excitement to go to the next step. There isn’t a rational reason. Its just how I feel.

So I am going to bow out now. I wish you well.

Thank you for the opportunity.

“I know we met in-person twice, but we have a SaaS mandate.”

Hi Jeremy,

Rich and I chatted about the possibility of investing in Inkshares. We really like you, the team, your traction, your business model and your vision for the future. Unfortunately, it’s not a great time for us to invest in a startup that’s targeting publishing. Our investment mandate right now is primarily around big data, SaaS, and cloud computing, so Inkshares is a stretch from that perspective. I think that it’s likely that our scope will be expanding in the next twelve months, so I would love to keep in touch and figure out if there’s a way to work together in the future.

Sorry, that I wasn’t able to make something happen near-term. Really like you guys and what you’re working on.

“Instead of giving you the $1.2MM we discussed, we’re completely out.”

Sorry for slow reply, I have been working on this.

Here’s where I come out:

I am not ready to lead the seed round. I am stuck on some significant concerns still:

1. Can you effectively replicate the value-add of the major publishers

2. Can you get liquidity in your author marketplace — both sides, authors and supports. I know authors supposed to bring the latter, so maybe it’s just authors, but still

3. Will the end product be comparable or superior to existing publishers (editing quality, book quality, marketing/distro quality)

All of these are very possible, and I know you are focused on them. I don’t know the publishing space well enough to make a conviction bet on this. I like you a ton, and I think the team has strong and interesting elements.

It was a close call, and you almost brought me back in the fold, but I return to where I was when I passed.

Here’s what I will propose, for you to consider:

I would like to stay close and consider doing a Series A as you bring some answers to the questions above. That could come from just spending time together, and I am fine with that. Alternatively, if you find a credible lead to the seed round, I’d be willing to put $250K into the seed round as a show of support, on the condition that I can meet periodically to get an update on progress (and try to be helpful). I think that amount is low enough to not risk negative signalling, and to tie me in a bit to what you are doing.

Anyway, you can sleep on that. I’m happy to discuss on the phone — tomorrow is packed dawn to dusk but tuesday I have availability — I am not avoiding you, but I have found it better to lay out this news this way and let you chew on it, and we can then have a good discussion if you like (or not, if you don’t want to!)

Thanks for all the engagement here, I am rooting for you.

This last one came on a Sunday night after the investor asked the founding team to re-distribute founder equity the week prior (which we did), and had asked for term sheets to take $1.2MM of our $1.5MM seed round. We had four meetings with this particular firm, and met all the partners. They ended up not coming in for the conciliatory $250K either. This one felt like a punch in the stomach, and I took the rest of the day off after getting this email.

Yes

It took a lot of “no’s” to find the 22 investors who said “yes,” and we’ve raised a total of $1.89MM over three seed rounds (“Friends & Family”, “Seed”, and “Seed Prime”). Our investors are believers in us and our vision. They have re-invested in subsequent rounds. As we’ve grown our business, some of our partners have also become investors.

We talked with one founder who was ready to quit and disband his company after receiving 8 “no’s.” “No” is hard. But it’s also incredibly common. Power through it. You’ll find “yes” out there. And when you do, you’ll experience acceptance, at least for the day.