My skin thickens every time I hear a VC say “You’re building what? Why? You’re selling to whom?” or just a flat-out “that’s not a good idea.” Stepping outside the norm often elicits strong reactions and disbelief. Of course, there are quite a few No’s that go along with those reactions too.
As a first-time entrepreneur and the founder of Awesense, an early stage tech company focused on helping utility companies reduce inefficiencies and losses in the electrical grid, I’ve had to learn to get used to rejection. I’ve come to realize that rejection from a VC doesn’t mean you have a worthless idea; it just means that two visions of the future failed to align.
If you’re having a tough time hearing “no”, here are three tips for dealing with rejection while fundraising:
1. “Don’t listen to the bozos”
The more I go through the fundraising process, the more I’ve come to appreciate Guy Kawasaki’s words: “don’t listen to the bozos.” Not much is worse than pitching an investor, whether an angel or institutional VC, and watching their eyes glaze over seven seconds in. This glazing over is then followed by comments like “your idea isn’t going to work” or “you’re going nowhere.” And all this occurs within the 30 seconds it takes to describe your business.
These people are whom I call the bozos…they are individuals who have a predetermined conception of you, your market, or your product. Whether you’re making the fundraising rounds or just simply networking, you’re going to meet people like this. It’s inevitable. However, don’t worry about it and don’t let it affect you. Simply thank them for their input, ask if they know anyone who might be interested in helping your business, and move on.
2. Focus on your mission
When you start to feel deflated by the whole fundraising process, think about why you got started in the first place. At Awesense, our whole mission is helping increase grid efficiency through intelligent solutions and technology. Hundreds of billions of dollars of energy are lost each year due to inefficient electrical grids, and with the cost of energy always increasing, this simply can’t continue. We’re not involved in complicated Cleantech energy production; we’re choosing a different route that’s helping save a watt as opposed to making a new watt.
Remember that fundraising is only part of your job as a founder. You’re also making a great product. In order to avoid burnout, focus on how you’re making a difference to your industry, community, world, etc. I truly enjoy building what we’re building, and solving the problem that we’re solving; this keeps my passion for Awesense running strong.
3. Surround yourself with great people
We have a great team at Awesense who are just as dedicated and excited as I am about solving problems in the electrical grid. Everyday we’re thrilling each other in some new way, and it’s pure joy knowing that everyone is committed to the mission. Simply put: it’s damn good fun and I’m really lucky to have the opportunity. Creating that culture and excitement, is a big part of my job. Finding the right people that believe in what we are doing and fit within the existing team is a must (but that’s a topic for another blog post). Ultimately, it’s about savoring each step of the journey, and appreciating the people you’re taking it with.
Not every great idea needs to be VC funded. However, depending on your business, outside funding often delivers scale much faster than early revenue growth can. Every founder needs to take a really hard look at how they want to scale their business. VC funding can certainly help scale, but it is very expensive money.
Never underestimate the time commitment involved to secure funding…and that’s time that could have been spent acquiring customers. You have to be truly committed to raising capital; as Brad Feld says “Do or do not, there is no try”. There will always be a need for solutions to tough problems, and those that are able to crack tough problems have the potential to be juggernaut companies of tomorrow. Time will only tell if Awesense becomes one of those companies.