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The reasons that venture investors often say "no"

The reasons that venture investors often say

Venture investors are obvious to face a great number of various offers. Several thousand startups in a year try to attract the investors, but only about one percent of the total number of projects are invested in. So, the reality is that investors say "no" pretty often.

Many investors claim that giving refuse is one of the hardest parts of the work. The reason is that in many cases you have to turn down really worthy ideas, even when actually you do not want to do so. But experience makes saying "no" a usual procedure of investing. However, this triggers another issue, because saying "yes" starts being estimated as something bad as if it can cause a possibility of missing a chance to get profit.

Another issue that influences investors’ decision is information overload. Too much information can lead to false decisions because venture investors have to be judgmental and filter an enormous amount of information in a rather rough way. That`s why one of the most important features of the successful investor is developing effective approaches in picking out key information. The problem of making the decision becomes even worse when personal preferences appear. The investors aim at those spheres which are familiar to them. In this case, if you get "no" from the investor, the possible reason is that he or she just is not sure enough that such kind of projects are profitable, thus any opportunity to turn down the project won’t be missed.

But what can you do to solve this problem? The solution is creating a systematic information flow. Moreover, the investor should choose wisely the project for his or her investments. For the realization of this, a close industry thesis is maintained, with an emphasis on SaaS or Hardware startups, for example. It is essential to make a careful information research to accept successful decisions.

Finally, the last important tip claims that venture investors must ensure that they do not deceive themselves with their prejudices and are ready to accept some good opportunities.

We recently explained why venture investors invest in startups at the local level.