REASONS FOR REJECTION BY VENTURE CAPITALISTS




Failed to gather funding by venture capitalists? Poor you. The thought that must be all across your mind right now is, why did they reject my proposal. But don’t be frustrated. It is quite normal. When looking for venture capital funding in Texas, you have to be quite careful as even the slightest mistake can result in a big failure.

Listed below are a few common reasons for getting rejected by venture capital investors.

  • A deal too small
A small deal results in less return income. So, many venture capitalists do not prefer small businesses. Sometimes, they won’t even talk to you if you are seeking a small capital. The minimum amount must be $1 million or $10 million.

  • Brand new company
Venture capitalists usually refrain from investing in baby stage businesses. You can go for them after the business has been in the market from some time and is running well. It is better to go for Angel networks Austin Texas if you are looking for business startup funding.

  • No existing revenue
Lack of revenue is quite a practical reason for rejecting any sort of investment in the business. Think for yourself, why would somebody invest in your business if there is very less or no revenue generation. If your business has made some profit, show it to the investors. Only then will they be interested.

  • Too much technicality
Always remember to keep it short and simple. Your great idea is of no use if you express it in a way that is difficult to understand. If you listen to venture capital funds discussions, you must be aware that venture capitalists like creative and unique ideas presented in a simple manner so that they can understand what they will be investing in. If you get too technical, you will lose the funding.

  • Desperately in need of money
If you are desperate for money, you will most likely be rejected. Venture capitalists prefer to invest in businesses that are already stable and need capital only to grow more. So, demonstrate to them that you do not need money. It is just for further expansion.


So, now that you know the reasons for getting rejected, try to improve accordingly. If you are looking for startup funding, keep a track of angel investor discussion to learn various tips on securing the capital.


Location: Austin, TX, USA

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