As angel investors, when founders reach out to us, we try to be helpful, because we think that’s part of our role in the start-up ecosystem. We try to provide them with useful feedback so that even if we are not the right investors for them, we hope that interacting with us will help them to improve their chances of polishing their pitch and finding another investor.
This sometimes backfires. We say ‘No’ politely, but when the founder keeps on asking for advice or guidance, this can be a little frustrating. My most important asset is my time. It’s the one irreplaceable resource which I try to conserve, and I need to make sure that I deploy it effectively. I am a full-time practicing
I am a full-time practicing doctor and my patients come first, which is why I try to provide mentorship only to those companies that we’ve invested in. I try to be focussed because this is where my interactions are likely to have the biggest impact. I need to think of a return on investment on my time, just as I think of a return on investment of my money.
The problem is that a lot of founders don’t understand this concept. The one thing most startup founders don’t have a shortage of is time. When they do find someone who replies to them, they think that’s a marker of potential interest, and they try to nurture that relationship.
The hope is that at some point I will perhaps write a cheque, which is why they continue to seek coaching. Now, unfortunately, I’m not a full-time investor, which means I need to be frugal with the way I allot my time. While I would love to be able to mentor tons of people, the fact of the matter is that I need to be picky and choosy.
I don’t want to be rude when saying no, but I think founders also need to understand that investors value their time. We try to guard it jealously because it’s our most valuable resource. The value we add is not just the money which we invest in a company – it’s the hand-holding we provide when they run into a rough patch, and this means we need to lavish time and energy on it.
As a founder, when an investor says No, accept this gracefully, say thanks, and then move on. Try to learn from the refusal, so you can do a better job with the next investor you pitch to. If you want, you can ask for permission to send regular updates, and most investors will agree to this, provided you don’t expect them to respond.
However, don’t keep on pestering the funder, because that sours the relationship. Not only does it irritate the person you’re pestering, it also wastes your energy. You could deploy this better by trying to find another investor who understands what you are doing and is happy to back you.
The good news is that there are lots of investors in the ecosystem today but it can take time to find the one who is right for you. Every time you get a refusal, you get a chance to improve, which means you are also getting closer to a Yes – and you only need one Yes to make up for lots of Nos!
[This post by Dr. Aniruddha Malpani first appeared on LinkedIn and has been reproduced with permission.]
