They're saying that a) they worry you don't have sufficient potential, and b) they are not very smart. The reason it's a sign the investor isn't very smart is

They're saying that a) they worry you don't have sufficient potential, and b) they are not very smart. The reason it's a sign the investor isn't very smart is that there's no real distinction. There are a lot of impressive startups (e.g. Twitter) that could have been called mere features when they started. So all anyone accusing you of being a feature is really saying is that you're small, which you both already know.