what to do when an investor passes

📆 Event Alert

Notion is one of the most forward-thinking teams in tech. Yes, they’ve built AI into their (remarkable) platform.

But their team is also leveraging AI internally. And it’s working.

Join us on June 23 for a conversation between Elizabeth Yin (GP at Hustle Fund) and Shir Yehoshua (Engineering Lead at Notion) to learn how Shir manages her team, structures sprints, and builds a culture of experimentation—using AI at every step.

This is going to be super tactical, with Shir sharing her step-by-step processes, templates, and workflows.

No charge to join, just RSVP here.

Read this if you’re building a rocketship company

Rocketships are fun. But they don’t fly on flash alone.

Sure, you need thrust engines and re-entry shields — but without fuel tanks and thermal insulation? You’re toast.

Startups are the same. Vision gets headlines, but the essentials keep you alive.

Nelson Mullins’ Emerging Companies is your startup’s legal fuel tank — mission-critical support from launch to exit. Formation, fundraising, M&A — they’ve seen (and steered) it all, across fintech, retail, life sciences, and beyond.

Start smart. Grow fast. Exit strong.

Partner with Nelson Mullins.

*this is sponsored.

📰 Today's Edition: What do to when an investor passes on your startup

Hearing "no" from an investor after pouring your heart into a pitch can be deflating.

You've spent weeks perfecting your deck, rehearsing your narrative, and de-risking everything that might be a concern.

So when the response comes back with something like "We're passing because your sales cycle is too long," it's easy to feel discouraged.

The way I see it, you have a few options.

Option 1: You could write back to the investor and tell her all the reasons she’s wrong

Option 2: You could say nothing and never speak to her again

Option 3: You could turn it into a learning moment

Why Option 1 Doesn’t Work

Investors want to know that the founders they are backing are coachable.

Now, that doesn’t mean implementing every single piece of advice that you get.

But it does mean being open to being wrong. Being open to hearing others’ ideas. Being open to trying new things in an effort to learn and grow.

So replying to a rejection email by telling the investor that she doesn’t understand your business and that she’s losing out on a billion dollar opportunity won’t land well.

Secondly, the reason stated in the rejection email may not be the only reason the investor is passing.

It just might be one of the reasons she is willing to share with you.

There are a ton of reasons that an investor could say no. She might not think it’s a big enough opportunity, or there might be a conflict with her portfolio, or she might not invest in that particular sector.

Rather than trying to turn a “no” into a “yes” – which probably won’t happen – I’d recommend expanding your top-of-funnel outreach rather than trying to convince a hesitant investor to change her mind.

But this doesn't mean rejection lacks value.

Do this instead

When an investor cites a specific reason like "long sales cycles" to explain why they’re passing… that’s a learning opportunity.

You could follow up with something like:

“Thanks for reviewing our deck! What would you consider a good sales cycle for a product in this category?"

Or…

“Are there examples of companies with similar target customers that achieved faster conversions?"

Or…

"What metrics or changes would make this more attractive from your perspective?"

This approach accomplishes two things:

1. demonstrates your openness to feedback

2. provides benchmarking information that could help with your pitch (and your business model) in the future

You can also attempt to keep the door open with this investor.

How? By offering to keep them updated on your progress. A simple "Would you mind if we keep you on our update list as we develop more data points?" is a good way to maintain the relationship.

It pays to be respectful

The startup ecosystem is small.

An investor who says "no" today might change her mind as your business evolves and finds product/market fit.

Plus, investors frequently share notes with their investor friends, who might be a better fit for you.

Rather than burn bridges (or letting them collect dust by staying silent after a rejection), we recommend maintaining positive relationships with everyone you pitch — regardless of outcome.

This is going to help you build the kind of reputation that makes investors want to work with you in some capacity.

It still stings,

Kera from Hustle Fund

🎥 Watch This