When we pitched VCs for my first company, FlightCaster, we received 52 rejections before we got our first term sheet. Every time I got a rejection, I asked for feedback.

Some VCs said our market was too small. But I found that odd, because travel is a global $500 billion market. Plus, lots of other travel startups were receiving VC backing, and presumably those VCs cared about market size.

Some VCs told us they weren't experts in the travel sector, and so they wouldn’t be a good match for us. But I found that odd, because they were invested in all sorts of esoteric industries, and they didn’t seem to be experts in those either. Plus, I later saw those same VCs invest in other travel startups.

Some VCs said, “We like you, but we need to do some more due diligence on the space.” Then they asked us for a bunch of hard-to-get stuff--market research, traction metrics, and better proof of growth. But even when we got them this information, they still didn’t say yes.

What's Really Going On?

Over the course of 52 rejections, I got tons of feedback on our startup. I spent incredible amounts of time responding to that feedback. I’d like to think that all this work responding to feedback and improving on our pitch made us better, but the VC firm that we ended up getting our first term sheet from didn’t care about any of that. In fact, they didn’t even request it. As we were proceeding past the third meeting, I asked them if they wanted our due diligence pack that was filled with juicy market research data, growth metrics, and industry overviews. One of the VCs, Sunil Bhargava, responded quite easily, “I don’t need any of that. I’m betting on you.” We signed the term sheet, and he became our lead investor.

I’ve been thinking about that recently. The big difference between Sunil and those other investors wasn’t that I magically found a VC that was willing to take a bet on me instead of getting preoccupied with all these other due diligence items. The real insight is that the single biggest reason those other VCs didn’t invest in me was that they didn’t believe in me.

Reading Between the Lines

All of the concrete feedback about market size and traction and metrics, that was just their polite way of saying they weren't interested. In fact, several of those investors who rejected me for FlightCaster are now investors in 42floors. And now that I have talked to them about this, they’re willing to be frank with me.

We can both acknowledge the fact that I am a different founder now than I was then. Several of these investors put money into 42floors when we hadn’t figured out our vision for the product or done any market research. Several of them don’t even know that much about commercial real estate. But they had seen me grow as a founder, and they were willing to bet on me. I do wish they had been more frank when they rejected me at FlightCaster, because I wouldn’t have gone off on so many wild goose chases. But I can give them a pass on that, because it’s incredibly hard to tell someone that you have no faith in him or her.

Here are a few tips to help figure out whether you’re getting honest feedback from potential investors:

1. Get a great advisor. This person should be a peer of yours, who is 12 to 18 months ahead of you. This is not an industry veteran. It’s not someone who sold their company for hundreds of millions of dollars. This should be someone who is good at playing the game that you’re playing, and they’re just a little bit ahead of you. This person is most likely to tell you frankly what’s going on.

2. Listen for repeating criticisms. If you truly have some problems, whether with the product or the market size, smart VCs will continue to see them. However, if the feedback you receive feels contradictory, then it may just be noise.

3. Find a good back channel. If you’ve done your networking right, you hopefully know people in common with the investors you’re pitching. Ideally, one of them gave you your initial introduction. That’s the person you want to go to, to try and figure out what went wrong. Most investors will chat with your reference, and the real story will come out. You still may fall victim to getting sugar-coated feedback if your friend feels bad for you, but at least you have a better shot of getting it than trying to get it from the investor directly.