How do I manage my anger after pitching VCs?

Dear Lucas…

I have never raised money before and I don’t know how anybody remains sane after pitching venture capitalists. I just finished my first round of bay area pitches… and it sucked. I had to tell the same story a half dozen times a day and I never knew how well I was doing. Sometimes the person I was with seemed engaged and asked a lot of questions, other times they would check their blackberry midway through my pitch.You would think that the engaged VCs were interested, but afterwards what they said was a total crapshoot. Some told me “It’s too early, but we’re very interested and we should stay in touch.” A couple told me flat out that they were not interested. One wasn’t sure about the market and needed to do more research to get comfortable.

The last VC I talked to seemed the most interested and said he was going to talk to his partners the next week and get back to me, but I haven’t heard anything and it has been three days. Meanwhile, the guy who’s blackberry was apparently more interesting than me reached back out. Apparently he talked to a friend and has changed his mind about the opportunity and wants me to come to a partner meeting next week.

Why won’t VCs just tell me what they think? Why do they lie to me? I hate pitching, why do VCs make me do it? Should I just try for angel investment?

—Dazed and Confused

Hi Dazed and Confused,

Raising venture capital is hard. Especially at first, it can feel like fishing backwards and blindfolded with handcuffs and without a fishing pole. But remember who decided to walk into this casino and sit down at the slot machine. You may not make the rules, but if you win, you probably won’t be complaining too much.

First, a few general rules of thumb. You never know how you are doing while you are pitching or just after. The only way to judge how well it went is by how much followup there is the next week. If there are clear next steps a week after the pitch, that is a good sign. If not, then it usually ends as a pass. The other general rule is that the VC who you think liked you most is rarely going to be the one that ends up investing. They are usually the first ones to ask for a followup. They get hot and heavy, and then flame away. Slow but steady burners are more likely going to make it to the finish line with you.

Even though raising capital is hard, many first time pitchers haven’t thought through how hard it is to be a venture capitalist either. I wouldn’t know first hand, but I can imagine. One of my favorite VCs, Frank Artale, has been a venture capitalist for almost three years. You can imagine how many startup pitches Frank listens to—at least four days a week packed with them. Let’s guess around 8-10 pitches a day. That is around 5,616 pitches total. And out of those, he is currently is on only 10 boards. 1/10 of a percent.

Frank Artale has had to say no at least 5,606 times in the last 3 years.

And Frank has other partners that he has to convince even after he is convinced himself. Could he make up a story to tell an entrepreneur that his partners were not convinced instead of just saying no? Yes. But is it more likely that his partners just weren’t convinced? Knowing Frank’s integrity, absolutely. Could Tim Porter from Madrona say “It’s too early, but we’re very interested and we should stay in touch” when he really meant no? Yes. But is it more likely that you are really too early for his investment and that he really does want to hear from you in the future? Knowing Tim’s honesty, absolutely.

Rejection is difficult to swallow. Sometimes it feels even worse to be in limbo; you just want to be put out of your mysery. Sometimes you can’t stand it anymore. But remember that VCs literally have to say no or pass on 99.9% of the deals they see. That doesn’t mean they don’t like you. It doesn’t mean they don’t want to hear from you in the future. It doesn’t mean they may not invest in you in the future. Don’t bite the hand that feeds you, they never forced you to try to raise capital.

This process may be hard, but it is the most efficient way the market has figured out to fund innovative ideas. It may not feel efficient, but every experience you have is there for a reason. Everything you hear (or don’t hear) from a VC may not be the whole story, but is the way it has to happen in a system where tens of thousands of people think they have good ideas and only a small percent of them can ever actually get funded.

—Lucas