recently rated:

Rated by 1

3.0 3.0 1.0 2.0 3.0

2.4

Espírito Santo Capital, S.A.

 

$$$$$ Lisbon, Europe

top rated funds:

Rated by 12

4.4 4.4 4.1 4.3 3.5

4.1

Andreessen Horowitz

Certified

$$$$$ Menlo Park, US West

Rated by 12

4.6 3.4 3.7 4.3 4.1

4.0

Silverton Partners

 

$$$$$ Austin, US West

Rated by 11

4.3 4.3 4.1 3.0 4.2

4.0

Y Combinator

 

$$$$$ Mountain View, US West

Rated by 15

3.7 4.4 4.0 3.7 4.1

4.0

Rincon Venture Partners

Certified

$$$$$ Santa Barbara, CA, US West

Rated by 21

4.1 4.1 4.1 3.5 4.2

4.0

New Atlantic Ventures

Certified

$$$$$ Reston, US East

Rated by 31

3.4 4.1 4.1 3.9 4.0

3.9

Leapfrog Ventures

Certified

$$$$$ Menlo Park, US West

Rated by 41

3.5 3.8 4.2 4.1 3.8

3.9

True Ventures

Certified

$$$$$ Palo Alto, US West

Rated by 11

3.9 4.2 3.2 3.6 4.0

3.8

Mangrove Capital Partners

Certified

$$$$$ Luxembourg, Europe

Rated by 44

3.8 4.1 3.4 3.7 4.0

3.8

RRE Ventures

Certified

$$$$$ New York, US East

Rated by 106

4.7 3.8 3.7 3.1 3.6

3.8

Sequoia Capital

Certified

$$$$$ Menlo Park, US West

Rated by 32

3.9 3.8 3.7 3.4 4.0

3.8

Altos Ventures

Certified

$$$$$ Menlo Park, US West

Rated by 31

3.9 4.1 4.0 2.8 4.1

3.8

406 Ventures

Certified

$$$$$ Boston, US East

Rated by 64

3.9 3.8 3.8 3.4 3.9

3.7

First Round Capital

Certified

$$$$$ San Francisco, US West

Rated by 23

3.6 3.5 4.0 3.7 4.0

3.7

DFJ Mercury

Certified

$$$$$ Houston, US Central

Rated by 27

3.8 3.6 3.8 3.8 3.6

3.7

FLOODGATE

Certified

$$$$$ Palo Alto, US West

Rated by 13

3.7 3.8 3.8 3.4 3.8

3.7

IDG Ventures SF

Certified

$$$$$ San Francisco, US West

Rated by 11

3.6 3.7 3.6 3.8 3.4

3.6

Flywheel Ventures

Certified

$$$$$ Santa Fe, US West

Rated by 17

3.6 3.5 3.8 3.5 3.5

3.6

August Capital

Certified

$$$$$ Menlo Park, US West

Rated by 10

4.0 3.8 3.9 2.8 3.7

3.6

Updata Partners

 

$$$$$ Red Bank, US East

Rated by 62

3.7 3.6 3.4 3.4 3.9

3.6

Trinity Ventures

Certified

$$$$$ Menlo Park, US West

Rated by 21

3.5 3.6 3.6 3.2 3.4

3.5

Wellington Partners

Certified

$$$$$ Munich, Europe

Rated by 12

3.2 3.6 3.4 3.0 4.2

3.5

DN Capital

 

$$$$$ London, Europe

Rated by 28

3.7 3.0 3.0 4.0 3.3

3.4

The Founders Fund

Certified

$$$$$ San Francisco, US West

Rated by 19

3.8 3.1 3.4 3.2 3.3

3.4

Draper Richards

Certified

$$$$$ San Francisco, US West

Rated by 14

2.8 3.5 3.7 3.2 3.7

3.4

Merus

 

$$$$$ US West

Rated by 49

3.7 3.4 3.1 3.4 3.2

3.4

Menlo Ventures

 

$$$$$ Menlo Park, US West

Rated by 31

3.3 3.3 3.2 3.6 3.7

3.4

Clearstone Venture Partners

Certified

$$$$$ Santa Monica, US West

Rated by 16

3.9 3.7 2.9 2.9 3.6

3.4

Versant Ventures

 

$$$$$ Menlo Park, US West

Rated by 10

3.6 3.4 3.9 2.7 3.3

3.4

DFJ Esprit

Certified

$$$$$ London, Europe

Rated by 13

3.0 3.8 3.5 3.2 3.4

3.4

Fidelity Growth Partners Europe

Certified

$$$$$ London, Europe

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It is one of the single greatest things in fundraising to get a quick "no" from an investor. The prolonged "maybe" is a far worse alternative. Yet, after receiving a quick "no," most CEOs tend to either (1) argue their point ad nauseam or (2) disappear without a trace. Both of these are the wrong course of action.

Before going into what to do, there is such a thing as getting a "no" too quickly. If you 10 minutes into your presentation and an investor says "no," then there is a bigger problem. The problem is probably with your pitch itself, as any investor would not even book a meeting unless there was some basic interest in the idea. In the case of a "no" that comes too quickly, it is really important to try and learn what you did wrong by asking a lot of questions, such as "could you understand me clearly," "was my presentation bad," "did you understand the market opportunity," "did you understand the offering," etc.

For the cases where the quick "no" comes after a couple email exchanges, a call, and maybe a meeting, the best outcome is to:

(1) get some advice on how to improve the presentation / business,
(2) ask for advice on other investors to speak with, and
(3) secure a time to get back in touch and report on progress.

Keep in mind that there is no such thing as a permanent "no" in venture capital, so you always want to leave the door open. Arguing your points or walking away cold will close the potential for future engagement with an investor. When you get the "no," send an email like the following:

"Thank you for taking the time to learn about XYZ Company. We would appreciate any quick thoughts on how to improve our pitch.

We are going to continue executing against our plan over the next couple of months. Let me know if you would like an update on our progress. Also, do you know of any other investors that might be interested in our space" I hope that we will have an opportunity to work together in the future."

Over the years, I have heard many VCs say that "the market is not large enough" in the first or second meeting. New entrepreneurs should know that this means "no."

Pocket edition of "Theoretical Future Market Values through 2020 - 3rd Edition" does not exist, nor is there a team of analysts at a VC firm inventing new markets to value. From the way that some VCs can confidently look you in the eye and say that "the market is too small" after fingering your PowerPoint, you would think that they have flipped to page 128 of the market reference guide while pecking away on the Blackberry.

The reality is (a) you have likely done a bad job explaining the market size in your pitch and (b) there is not a lot of anecdotal data for the VC to make an off-the-cuff mental estimate. When you pitch your business, you must reference concrete market data points, the best examples of which are recent liquidity events, that a VC can understand quickly. Read on...