Why VCs Ghost Founders and Reject Deals
Getting ghosted is never fun. Especially if you’re a founder seeking capital from investors. It’s similar to dating. You might be left wondering “Why is this person not getting back to me? Did I do something wrong?” Did the investor hate the product? Did they not care for me personally?” It’s enough to drive anyone up the wall. But in the world of venture capital (VC), being ghosted or rejected without explanation is not uncommon.
When VCs ghost founders or reject deals and never speak to the founder again, it can be a frustrating experience. As a founder, you pour your heart and soul into your startup, crafting the perfect pitch, only to be met with silence. So, what gives? Why do VCs sometimes choose to disappear rather than deliver a simple “no”?
One reason VCs may ghost founders is the sheer volume of deals they encounter. VCs are bombarded with pitches daily, and the sad reality is they can’t invest in every promising startup that crosses their path. With limited time and resources, some VCs opt for silence as a way to signal a rejection without engaging in potentially time-consuming conversations.
Moreover, VCs operate in a high-pressure environment where quick decisions are key. If a VC determines that a startup doesn’t align with their investment thesis or isn’t a good fit for their portfolio, they may choose to move on swiftly without providing detailed feedback. This can result in founders feeling left in the dark, wondering what went wrong.
Additionally, some VCs may ghost founders due to a lack of interest in confrontation. Delivering bad news, such as rejecting a deal, can be uncomfortable for some investors. Rather than facing potentially awkward conversations or hurting the founder’s feelings, they opt for silence as a way to avoid confrontation altogether.
Furthermore, communication styles vary among VCs. While some investors prioritize transparency and clarity in their interactions with founders, others may lean towards avoiding difficult conversations. This discrepancy in communication approaches can lead to instances where founders are left hanging, unsure of where they stand with a particular investor.
In conclusion, the phenomenon of VCs ghosting founders or rejecting deals without further communication is multifaceted. It can stem from the overwhelming volume of deals VCs face, the fast-paced nature of the industry, a reluctance to engage in uncomfortable conversations, or differing communication preferences among investors. While being ghosted can be disheartening, it’s essential for founders to remember that rejection is part and parcel of the fundraising journey. By staying resilient, learning from each interaction, and seeking constructive feedback where possible, founders can navigate the VC landscape with greater understanding and perseverance.
So, if you find yourself in the shoes of a founder who has been ghosted by a VC, take a deep breath, regroup, and keep pushing forward. Remember, it’s not a reflection of your worth as an entrepreneur but rather a common aspect of the funding process in the ever-evolving world of startups and venture capital.