Should You Talk To VCs Who Are Not A Fit?
A founder’s time is valuable.
Best case scenario, fundraising takes 100 conversations and 3-6 months.
I know great founders who had 300 conversations over 12 months before successfully raising. Some do even more never to raise at all.
You’ll hear different philosophies:
It’s a numbers game.
Cast a wide net.
Do a targeted lightning strike.
Go deep with a few.
Take any meeting. You never know where it could lead.
Don’t waste your time if it’s not a fit.
So, should you talk to investors who are not a fit?
How do you balance your precious time with the reality of a sales funnel and the magical startup ingredient — serendipity?
Answer: it depends.
Better answer: let’s walk through scenarios for yes, no, and the nuances so you can decide for yourself!
YES! Talk to investors who are not a fit when…
1. You’re starting your fundraise journey.
Always pitch your worst first!
Get some practice. Ask for feedback. Work through the Q&A.
Do this with friendlies who are not a fit for investment.
I’d also do this with non-friendlies (unfriendlies??) before heading to the investors you think are a perfect fit.
You want to bring your A game when you get to those meetings.
You’re not going to play your best basketball on the first day of the season. Save that for March! 😉 🏀
2. You have a personal connection.
Work that network, baby!
I will take a meeting and be helpful to a founder who is not a fit for our portfolio if I know them well or they came highly recommended from someone I like and trust.
The goal for the founder?
To get feedback and see if I know someone who might be interested.
Will we change our investment thesis because of a personal connection? Nope. But I might be able to intro you to someone who is closer to the right fit!
Also, while rare, if an investor has a long term relationship with a founder (known them for years, involved in previous companies), that’s when they are most likely to “make an exception.”
You’re in a weird space.
You don’t fit cleanly into the typical investment boxes of B2B Software or B2B Software. (#momjoke)
No but seriously, maybe you’re medical device-ish selling directly to consumers. Consumer product investors are going to say you’re too medical. Medical device investors will say you’re too consumer.
You will likely have to talk to more investors than someone who is cleanly in one space.
You’re not necessarily pitching everyone for investment.
It’s more of a “I’d love your feedback and if you have suggestions on who to speak with” strategy to grow your network and reach the investor who LOVES the medical device-ish consumer space!
You like them.
I don’t know how else to explain this but if you feel really drawn to someone, even if you’ve never met them, I’d probably take that meeting.
Maybe your lives have a lot of overlap.
You’re both Amherst College grads who love triathlons and have elementary-aged kids?!?
You’re going to hit it off (with me) right away!
I don’t know if this has ever turned into an investment but making a genuine connection with someone is usually energizing and leads to good things.
It’s easy.
“Talk to investors” usually means reach out via email, LinkedIn, a warm intro, and set up a meeting.
That’s very time intensive, especially if that investor is not a fit and highly unlikely to invest.
The math is different if you can go to an in-person event with a lot of investors. Or you meet an investor at an activity that is fun or you were going to do anyway.
(Shameless plug for Founder Funder Jogs!)
Now, don’t go to an all-day robotics event if you are building software for lawyers, but if there’s something that feels like a light lift, you’d have fun, lots of opportunity to run into people and get some face time, that might be worth it.
NO! Don’t talk to investors who are not a fit if…
You think you can change their mind.
The investor has told you it’s not a fit. You take the meeting anyway because you’re awesome at sales and you can sway anyone.
It’s not going to change their mind.
Maybe, MAYBE, this happens .000001% of the time. I’m sure someone has a story but I haven’t seen it and I wouldn’t take those odds.
If an investor has already told you it’s not a fit, they are trying to save you time and heartache.
One less emotional rollercoaster to ride.
Believe them. Use that time on higher ROI activities.
It’s cold outreach.
You cast a wide net and sent a canned form letter to an investor who is very far outside your strike zone.
They invest in clean tech software. You’re a consumer dating app.
A brand new entry-level analyst might take the meeting. (A more senior one would not.) Maybe they have metrics they’re trying to hit.
But it’s not going anywhere because it’s not a fit for them and there’s no personal connection or business overlap!
A waste of 30 minutes plus your prep and follow up.
Better to spend time finding a warm or more targeted option.
The fundraise is not going well.
Things going reaaaaal slow? Like, you talked to 500 people over 12 months with no bites?
It’s tempting to take any meeting you can get. Are you a friend of a friend of a friend of someone who invests? Let’s talk!
Obviously, there’s a balance. You’re going to hear a lot of “nos” and if you’re in a “weird space” (^^in the YES section), it may take more conversations.
But if you’re having trouble fundraising, talking to even more, random investors is probably not the answer.
These are the circumstances when founders get taken advantage of, end up with someone shady or mean, or have a toxic investor relationship that hurts the company’s long term trajectory.
The best use of time?
Pull back and regroup!
Get more customers and traction.
Pivot your market or idea.
Figure out other funding sources like consulting revenue or customer prepays.
Spending a few months focused on the business will be great for your company and usually makes the next fundraising cycle easier.
How do you decide to take an investor meeting? Do you agree with the Yes and No scenarios? Have you seen another strategy work well? Share your tips and advice! 👇
Want more content on fundraising? What questions should I cover? Reply and lmk!
There is a lot of angel money to be had in Atlanta right now. For example, 100+ (!) millionaires were reportedly created from employee stock options in a recent ATL consumer exit. Not to mention the investors in that company. When people feel flush they are very open to investing in the next great startup. Find them.
Also: VCs, have three jobs: raising money, looking for new deals, and managing existing deals. They can only do 2 of the 3 jobs at a time. Don't chase VCs who are not looking for new deals.