MONEY

Blogger Logic: Avoiding "The Long No"

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Bootstrapping is harder than most entrepreneurs realize, which means outside investment is a necessary evil, writes Paul Graham of Y Combinator, a firm that backs technology start-ups (see paulgraham.com). But the fundraising process can be discouraging, and any deal, no matter how far along, can fall through. Graham writes:

"The most dangerous thing about investors is their indecisiveness. The worst case scenario is the long no, the no that comes after months of meetings. Rejections from investors are like design flaws: inevitable, but much less costly if you discover them early. So while you're talking to investors, constantly look for signs of where you stand. How likely are they to offer you a term sheet? What do they have to be convinced of first?'¶Investors tend to resist committing except to the extent you push them to."

Last updated: Nov 1, 2008




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