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Ask HN: What's your best (worst) VC pass reason?
Like the title says, what's the worst/silliest/just plain weird-est reason a VC has given you for passing on investment in your company?
For us, it has to be the time a VC passed because we couldn't show him 70% retention over 12 months on our six-month-old product.
After hearing that, I have to know: does it get worse? I'd love to hear some more stories of excuses to pass on a round.
- throwaway57892 8y agoThrowaway on the off chance this VC recognizes this: VC: "We really like your product, and think it could really succeed with business model X" Us: "Oh that's great, X is actually our exact business model!" one week of no contact later VC: "We're passing because we don't really understand business model x"
- tlb 8y agoSee "21. Investors don't like to say no." in http://paulgraham.com/guidetoinvestors.html http://paulgraham.com/guidetoinvestors.html Investors often feel the need to give a made-up reason, but the real reason is that they're not as excited about you as about something else. Don't be discouraged -- even the most successful companies got many nos on the way to their first yes. Don't change your business strategy based on the reason any one investor gives you, although if several good investors give you the same reason, you might want to think about it. BTW, it's normal to extrapolate retention to a yearly number using cohort analysis. Your claim is a bit like "I can't have been going 80 MPH because I've only been driving for 30 minutes!"
- moberemk 8y agoFrom my experience, extrapolating retention like that isn't really particularly valuable. It's basically the same as making something up whole-cloth past a certain point--feels more like lying than projecting. (I also read the OP's story as the investor asking to see actual numbers, and not projections--if someone asked to see those kinds of numbers my first thought would be that they were asking for historical data)
- vcproofalias 8y agoRealized the title and final sentence were misleading, was less looking for advice and more looking for war stories. Some of these interactions can feel pretty bizarre from the entrepreneur side and was wondering if anyone else had good ones to share.
- tlb 8y agoWar stories are best when you hear both sides. One-sided war stories are mostly like "they made a mistake, and we took advantage of it." But why did they make a mistake? What were they thinking? Did they have bad data, or wrong analysis, or internal disagreement? Were they losing a battle to win the war? That's when it gets interesting.
- investoralias 8y agoReceived an email from a VC at 3:30am that expressed interest in investing. Sent over deck and demo. Turns out he just couldn't sleep and wanted reading material "to pass the time."