Why Investors Don’t Always Give Honest Feedback – And What You Can Do About it

Hello Startup Community!

In today's edition, we're tackling a common frustration many founders face after pitching to investors: receiving vague or unhelpful feedback. So, why does this happen, and what can you do when it does?

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Why Don’t Investors Give Honest Feedback?

  1. It Takes Time, and They’ve Moved On Once an investor decides not to invest, there's little motivation for them to spend more time on your startup. Crafting detailed feedback takes effort, and most investors will choose not to do it, especially if they’ve decided you’re not the right fit for their portfolio.
  2. They Can’t Always Say What They Really Think Investors make decisions based on both logical factors and gut feelings. There are times when they just don’t "click" with a founder or idea. But admitting that isn’t easy, so instead, you might get a polite, generic response like "It’s not the right fit for us at this time."
  3. They Don’t Want to Deal with Negative Reactions Some founders, understandably, get defensive or try to convince investors that their feedback is wrong. This can make investors hesitant to give detailed responses in the future, knowing it might just lead to frustration.
  4. They Want to Keep Doors Open for the Future Investors know that early-stage startups can change quickly. They don’t want to burn bridges in case your startup takes off later or another investor sees potential where they didn’t. So, they often keep their feedback neutral, just to play it safe.

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What Should You Do When an Investor Passes?

  1. Accept the "No" and Move On It’s hard, but if an investor decides to pass, respect their decision. Pushing back or continuing the conversation rarely changes their mind and can hurt the relationship.
  2. Take Feedback with Caution Not every piece of feedback will be helpful. It’s important to think critically about what’s being said and decide what’s worth considering in your next steps.

Quick Tip:

Instead of getting caught up in vague responses, focus on what you can control. Keep refining your pitch, improving your product, and building relationships with other potential investors. The right fit will come along.

Looking forward to sharing more insights in the next edition of Startup Success Weekly with GACS!

Best, The GACS Team

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