Did investors turn down your company? That is entirely typical. In the United States, more than six million enterprises are launched a year on average. Fewer than 5,000 of them will receive venture financing, while over 30,000 will receive angel investments.
I’ve been an angel investor for more than ten years and have taken part in hundreds of pitches, but I’ve never seen a business flourish without facing numerous rejections along the road.
Whether it was an outside investment, small business loan, venture money, or any other kind. In actuality, rejection is a part of being an entrepreneur. You are not the exception—you are the rule.
So, you might be asking yourself, “What’s the secret to finally persuading an investor?” Everything in business boils down to how you react to rejection.
10 things to do if your investment is rejected
Learning and adjusting are the keys to handling rejection in business. Failure to meet the requirements for investment is not a failure; rather, it is an opportunity to develop your company and your entrepreneurial skills. You learn how to interact with investors, identify weak points in your company, and tweak your proposal for the next meeting.
After an investor rejects your company plan, it might be challenging to know where to begin. Fortunately, you can find out why you were turned down and improve your pitch by using this 10-step structure.
1. Ask why your business was rejected
Asking why your business was rejected by investors can help you improve your chances of success in the future. By understanding the reasons behind the rejection, you can make changes to your business model or investor presentation that will increase your chances of success.
There are a few common reasons why businesses are rejected by investors. One reason is that the investor does not believe that the business will be profitable. Another reason is that the investor does not feel that the team is strong enough to execute the business plan. Finally, the investor may simply not be interested in the industry in which the business operates.
If you have been rejected by investors, take some time to reflect on why this may have happened. Then, make changes to your business model or presentation and try again.
2. Evaluate the reasons for rejection
When you’re trying to get your business off the ground, it can be difficult to take rejection. But it’s important to remember that not every investor is a good fit for your business. By evaluating the reasons for rejection, you can learn from your mistakes and make your business more attractive to future investors.
There are a few common reasons why investors might reject your business proposal. One is that they don’t believe in the viability of your product or service. They may also think that your team is inexperienced or that you’re asking for too much money.
If you can identify the reason for rejection, you can work on fixing the problem. For example, if investors don’t believe in your product, you need to work on making it more appealing. If you’re asking for too much money, try to negotiate a lower amount.
3. Consider your business idea
When you’re pitching your business idea to potential investors, it’s important to be prepared for the possibility of rejection.
There are several ways you can handle business rejection by investors, and the best approach for you will depend on your specific situation.
If you’re feeling discouraged after a rejection, take some time to consider your business idea from the investor’s perspective. You may be able to make some changes that will make your idea more appealing.
Don’t take rejections personally, and remember that even the most successful businesses have faced plenty of “no’s” along the way.
Instead of giving up, use rejections as motivation to perfect your pitch and keep trying until you find an investor who believes in your vision.
4. Revise your plan
Nobody likes to be rejected, but it happens to everyone at some point in their lives. If you’ve been rejected by an investor, don’t give up hope. You can revise your plan and try again.
Here are some tips for revising your plan:
- Take a step back and analyze why you were rejected. What could you have done better?
- Make changes to your plan based on feedback from the investor.
- Practice your pitch so that you’re more confident when meeting with investors.
- Be persistent and don’t give up on your dream of owning your own business.
5. Research investors
When it comes to researching investors, handling business rejection by investors can be a difficult task. However, with the right mindset and approach, you can overcome this hurdle and move on to the next level in your business career.
The first step is to understand that not every investor is going to say yes to your business proposal. In fact, most investors will say no more often than they say yes. This is simply the nature of the investment world. With that in mind, don’t take it personally when an investor rejects your proposal.
Instead, use rejection as motivation to continue researching potential investors. The more you research, the better your chances of finding someone who believes in your business idea and is willing to invest in it.
There are many resources available to help you research potential investors.
6. Find alternative funding sources
If you’ve been rejected by investors, you’re not alone. In fact, most businesses are turned down for funding at some point. The good news is that there are alternative funding sources available. Here are a few options to consider:
- Friends and family: This is often the first place business owners turn to for funding. If you have a supportive network of loved ones, they may be willing to invest in your business. Just be sure to draw up a legal agreement so that everyone is on the same page.
- Crowdfunding: Platforms like Kickstarter and Indiegogo can be great places to raise money for your business. With crowdfunding, you set a goal and people can donate money to help you reach it. If you don’t reach your goal, you don’t get any money.
7. Don’t blame investors
It s not uncommon for businesses to be rejected by investors. But don t blame the investors they’re just doing their job.
Investors are looking for businesses that have solid plans and are likely to succeed. If your business does t meet those criteria, it s not personal, it s just business.
Don t take rejection from investors personally. Instead, use it as motivation to make your business better. With a little hard work and perseverance, you can make your business into something investors will want to invest in.
8. Don’t blame the process
As a business owner, it can be easy to take rejection from investors personally. After all, you have put your blood, sweat, and tears into your company, and it can feel like a personal attack when someone says no to investing. However, it is important to remember that investors are simply looking for the best return on their investment, and sometimes that means saying no to a good company.
Don’t blame the process – handle business rejection by remembering that the investor is not rejecting you, they are just rejecting your business proposal. It is important to stay positive and keep moving forward. Keep networking and pitching your business to potential investors; eventually, you will find someone who sees the value in what you are doing.
9. Know when to stop pursuing investment
When it comes to business, there is no such thing as a sure thing. Even the most promising businesses can be rejected by investors. If you find yourself in this situation, it is important to know when to stop pursuing investment and turn your attention to other areas of your business.
There are a few signs that indicate it may be time to move on from seeking investment. First, if you have been pursuing investment for a long period without success, it may be time to give up. Additionally, if the feedback you are receiving from investors is consistently negative, it may be an indication that they do not believe in your business.
If you find yourself in either of these situations, it is important to take a step back and reassess your options. There may be other areas of your business that you can focus on to make it successful.
10. Realize that funding isn’t everything
- Every startup business owner knows that funding is key to getting their business off the ground. But what happens when you try to get funding from investors and are rejected?
- It can be disheartening, to say the least. But it’s important to remember that funding isn’t everything. There are other ways to get your business up and running, even if you don’t have investors on board.
- Here are a few things to keep in mind if you find yourself in this situation: first, realize that rejection is part of the process; second, don’t take it personally; and third, look for other ways to raise funds for your business.
If you’ve been rejected by investors, don’t despair. Remember that funding isn’t everything and there are other ways to get your business off the ground.