Besides my never ending Inbox overload, from time to time also "suffer" from deal flow overload --and the real problem sets in, which is failing to get back to entrepreneurs to say thanks, but no thanks.In other words, No.
My partner Lior Lifshitz and I often discuss the difference between an American (read polite) and Israeli reaction to a company presentation. My American background has failed me over and over when trying to decipher the responses that some of our portfolio companies receive from VC funds all over the world. "Very interesting" could mean very interesting, but also could mean "I can't think of any questions, don't want to sit here and not say anything..."
The perennial " we will get back to you" could actually mean that, or it could mean "please never ever call us again."
And when does a VC actually just mean No? And does No mean No,or does it mean keep me in the loop and try and convince me.
What I can do is give you our take on this whole issue, and offer a recommendation that is limited to dealings with Jerusalem Capital, I do not deign to think I can speak for an industry.
We receive, on average, 10-20 new "deals" a week. Some are cold calls, some referrals. We will meet with five companies a week, both new ones and ongoing discussions (most of our time we reserve for existing portfolio). That's at least 60 yes/no decisions a month.
Now many of those are quite easy...not in the range of investments we make (above $1 million), not in areas we invest in (we do not do bio-tech, chip development, hardware development, classic enterprise software).
Then we get to the deals which are potential deal flow for us...first we take quick look at material to gauge whether we have any interest... if so we schedule a meeting. But already there many fall through the cracks--lost in aforementioned Inbox overload. So feel free to send again, as of now email is free. I receive hundreds of emails a day (after cleaning out spam). Sometimes I forget to respond. Even to the deals that I am interested in!
Then we meet...and we try to determine is these are people we can work with -- if not, no reflection on them or the business, just our belief whether we will mesh well. In our business we need to work quite closely with our partners -- and not everybody can be partners.
After the "people" test comes our analysis of the business itself...and sometimes we are not sure. Usually breaks down that 1/3 of the time we say, we like the people, but don't agree with the business vision. 1/3 we are not sure, 1/3 we say, hey, maybe we can do this.
Then comes the difficult part--can we agree on partnership terms. Some in the venture/start-up world call this "valuation," I say partnership terms...at the stage we get involved in a company, it's silly to talk about inherent value. It's all blue sky.
So why do I mean with the question "When Does a VC Mean NO?"
Because anywhere in our process we could mean NO, but not quite get around to saying it. And then there are times when it may feel like we are saying no (e.g. emails not answered) but we really are just overwhelmed, or perhaps never even saw the email (that happens, email is NOT foolproof).
And when we say No, but keep in touch..it means just that. It means maybe we will do something down the line together, maybe the IDEA will change over time, or we will realize that there is a there there.
If we say a straight no, accept it. Probably means no. But we wish you the best.