The Difference Between “No” and “Not Yet”

Even the best entrepreneurs often hear “no” from potential investors.  I’ve blogged before how this remains one of the hardest parts of my job.  Yet a clear and quick “no” is often the best response other than an enthusiastic “yes”.

But there’s a difference between “no” and “not yet”.  And “not yet” responses can depend both on the investor and the entprereneurs.

When a startup doesn’t match the stage where a particular investor focuses, founders may get a response along the lines of “This is interesting to us, but come back once you get from X phase to Y phase”.  That could be from seed stage to a larger Series A financing need, or to progress from pre-product to post-revenue.  Good investors try to be clear in terms of what they look for in terms of progress and milestones of the startups they invest in.

Occasionally though, a “not yet” response simply stems from the inevitable staging of conversations that happens in any startup’s fundraising process.  As I’ve stated before, I’m a big believer in being deliberate and explicit in startup fundraising.  But at NextView we try to be as deeply engaged in the entrepreneurial community in a variety of different ways (mentorship, accelerators, demo events, etc).  As a result, we frequently spend time with entrepreneurs before they’ve started fundraising or while they’re still contemplating various pathways for funding their businesses.

So just as we strive to be clear and candid with entrepreneurs we meet, hopefully entrepreneurs do the same with us.  If you hear a “not yet” from NextView it’s probably because we’re uncertain if you’re simply seeking feedback and advice versus running an actual fundraising process, or we’re still in the process of educating ourselves about a particular space.  And inevitably even the best entrepreneurs refine and improve their pitch as they progress through the fundraising process.

We do our best to provide a polite but quick “no” to startups we’re unlikely to ever invest in.  So when we say “not yet” this isn’t code for “we’re going to hang around the hoop and see what happens with your round” we which frankly think is lame.  In fact we’re not very influenced by how a startup is received by other investors, as we’re comfortable investing in seed stage startups as either lead investor or as a participant with other investors.  Similarly for any startup we say “not yet” to, we actively seek to help in whatever ways we’re able in order to earn the right to have a look when the startup’s fundraising is in full swing.

Lee Hower

I’m an investor, entrepreneur, and helper of technology startups. I’m currently a General Partner of NextView Ventures, which focuses on seed stage internet-enabled businesses. I co-founded NextView in 2010 with my partners Rob Go and David Beisel. I started in the VC business as a Principal at Point Judith Capital, an early-stage firm. I joined PJC in 2005 and served as a Principal at the firm through early 2010. During this time I co-led investments in FanIQ, Sittercity, and Multiply and sourced investments in Music Nation and NABsys. Prior to becoming a VC, I was a startup guy myself. I was part of the founding team of LinkedIn, and served as Director of Corporate Development from the company’s inception through our early growth phases. Before that I was an early employee at PayPal, and worked in product management and corporate development roles through the company’s IPO in 2002 and subsequent sale to eBay later that year. I went to college at UPenn and received degrees from both the School of Engineering and Wharton School of Business.