If you’ve made it this far, you must have something pretty solid. We tend to recommend bringing solid ideas before Venture Capitalists as a first step once they’re scoped out and all the questions have been answered (see parts 1, 2, 3 and 4). It’s true that they end up getting a percent of your success, but it’s usually worth it to be able to invest somebody else’s money instead of your own. They also have connections that would be massively valuable for getting your idea off the ground.
Of course, what happens if they say no? It doesn’t necessarily mean that your idea is a bad one, but it can be a pretty big tell. These people invest in ideas for a living and it’s wise to factor in their judgement. You may feel a bit dejected, but make sure to question them about why they don’t want to invest. Sometimes they are already investing in a competing product, which at the very least is valuable information for you to know. Is your idea still feasible if competition is already well-funded and in the works?
Their reasoning could also be something more general. Perhaps they think the market is too volatile? Do you have evidence or research that can disprove that notion? VCs often bring the most experienced and objective opinions you’re likely to get, so make sure you take heed of them.
If VCs don’t think your idea is a good one, it very likely isn’t. They may be wrong, but if venture capitalists are turning your idea down, you should certainly reflect on what that means. It’s difficult to be objective about your own ideas, particularly if you’re already emotionally invested in it and people have been giving you positive feedback. Remember that friends and family have a tendency to tell you what you want to hear, but venture capitalists will tell you what they really think, so listen to them closely.
That’s it for this series. I encourage all of our clients to read this entire series before beginning, because for many of them this is their first foray into the web application world, and it’s a tricky industry. I love entrepreneurs and do my best to encourage people’s entrepreneurial spirits. I’m always happy to help out startups and existing corporations that want to bootstrap a new idea.
If you want my opinion on whether or not your idea is a good one, or would like to engage the services of Chromaplex, shoot me an email: email@example.com or get me on twitter: @nstolmaker.