Investors turn down deals for some pretty dumb reasons. They lack logic, consistency, and sometimes even a grasp of what their own job is...
You know... taking actual risk.
"We're not interested for this round, but come back to us when Sequoia is leading at a $1.5 pre-money, you have seven enterprise customers and you're cashflow positive. Oh, and make someone from your 25 person Moldova tech team your co-founder. Don't forget to tell all your founder friends about our ultra-pre-pre-seed program. We love early."
It's easy to get frustrated and focus on all of the things the investor did wrong and the ridiculous questions they asked.
You shouldn't, because it's still your fault they didn't invest.
Assuming they weren't unethical and they met your character standard, you went into a pitch with the goal of getting money from this person, and they didn't get there.
Maybe they didn't even have the guts to say no.
But they didn't say "yes", and that was the goal, so that's a failure. It doesn't pay to look at it any other way--and I think too many founders focus on the investor as the problem versus their pitch or their company.
If you walk away from a "no" without any ideas on what you could have done better, especially if you're consistently getting turned down, then you're missing out on a learning opportunity.
Let's not forget the possibility that the lesson to be learned is that perhaps your idea just isn't a very good one. You're still a wonderful person, I'm sure, but your idea or company could be one that is disproportionately unlikely to return investor capital in multiples given the risk.
Let's keep in mind that is the definition of good, too: An investor has to see that you have a statistically significant chance of building a huge company--with "huge" having specific definitions most likely in the hundreds of millions of dollars in enterprise value.
There are a lot of "good" ideas out there that don't have that much potential or don't have a very strong chance of getting there.
Getting an investment is very difficult thing. How difficult? Well, my own statistics are that about 2000 things come across my desk in a year, and I make 8-10 investments. That's the top 0.5%.
Think about that as a race. How fast are the top half-percentile people running? Not only are they running really fast, but think about how much they must be training, how they eat, what kind of shape they're in, etc.
They've got their race prep *down*. That's how good you have to be to be in the top 0.5%. If you didn't train and you didn't finish that high, you wouldn't blame the course, or the weather, or your shoes. It would just be obvious you weren't that competitive of an athlete. Sure, you might have had some shoelace issues or maybe a brisk wind, but chances are that wouldn't have mattered.
Same with pitching.
Some investors will say yes to deals that others say no to, but statistically, most people who try to pitch are getting no's across the board or by a majority of people--and when that happens, you need to turn the mirror on yourself as a founder.
Ask yourself, "What would somebody need to believe to make this investment and how can I better convey that?"
Or, perhaps, "How can I make believing in this idea so easy, even a caveman could understand it."
(Unfortunately, that's not terribly far from the truth of the situation.) Still, if you know that's what you're up against, then it's up to you to convince them on their terms.
Here are a few ways founders can improve their chances with an investor:
1) Make sure you actually have a viable startup idea, *before* you pitch.
Pitching isn't about testing the viability of an idea--it's about getting money for something you already know should exist, can work, and will likely return enough capital to investors to fit their criteria. It's this last part that trips most people up. You need to be able to explain how this company can grow to a size and scale in the hundreds of millions of dollars, if not more--so if you're forward revenue projections have you at $5mm in revenues in your eight, you're just not going to get there.
2) Use time tested sales techniques.
Pitching is a sale--a sale of your own equity. The investor is *buying* into your company, so why wouldn't you use techniques used by experienced sales professionals? Here is a list of the top selling sales books of all time. Seems to me that if you're going to pitch anything, you might as well read one or two of them. A key one for me is outlining ahead of time how you're going to use the time in the meeting and getting me to buy into it right off the bat. Tell me what you'd like to convince me of.
3) Tell a story, don't just convey information.
A story as an arch to it--a path with momentum that leads to a place. I can read the slides just fine on my own, but when we meet, you want to mentally take my hand and lead me to a conclusion that I can make a lot of money getting involved. Each slide, each fact, has to be part of a whole, versus just another fact you're throwing at me.
At the end of the day, there are a lot of "wrong" decisions made by investors--but it's your job as founders to make sure we don't make that wrong decision. That's the only way you'll win us over--not by reminding us or yourself of our wrongness.