Saying No


The VC business, for a fund manager, is an orgy of rejection. 

During the course of a year, we will touch 1,000 companies at Amasia; we'll invest in three (maybe four, sometimes two). What this means is that on 997 occasions, we're saying no, either explicitly or implicitly. It is built into how we do our work, which involves a disproportionate time allocation to our portfolio companies. And we can do that only if we limit the number of investments we make.

The hardest are those where there was genuine chemistry and/or genuine admiration. But for one reason or another it didn't make the cut -- not enough traction, feeling the team wasn't deep enough, our inability to perceive a true global opportunity (this is a key criterion for Amasia), concluding that the situation had too much complexity for our small team to diligence. 

Sometimes the reason is simply that we have too much on our plate and need to triage.

I spend an inordinate amount of time trying to say no gracefully. My approach has always been to deliver the message by email, out of respect for a founder -- to give her or him the space to digest the message and decide whether to acknowledge it or not (and ask for a meeting if they so desire, which I am always happy to do). I try being as direct about the reasons as possible, while also being respectful.

It doesn't matter that we were likely frog #48 in the kissing-the-frogs routine that founders have to go through. This founder made time for us, in most cases schlepped to see us, was courteous and graceful, and openly shared an incredible amount of information. She or he is owed respect.

I don't always get it right. Occasionally we dawdle for too long, almost invariably because we are stuck on the fence. This is a rotten situation because I am violating one of our basic maxims: "a quick no is better than a long maybe". It happens no more than once or twice a year but that's once or twice too often. 

What I'd like any founder dealing with us to know is this: we're founders ourselves at Amasia -- in every respect. We know the cascading moral and economic obligations in all directions. We know the stresses. We understand, more than may be evident, and we empathize, more than may be evident. 

I've never fully understood what the phrase "founder friendly" means -- what I try being is "founder respectful", in all our dealings.