Fundraising has always been a daunting task for founders, with many describing it as almost a full-time job and one of the most difficult aspects of their many roles.

It doesn’t help that the power dynamic has always been with the investors — that someone decided to come up with Glasswall, which is sort of Glassdoor to allow founders to review VCs, perhaps in a bid to stem some of the unsavoury behaviour they display and steal some of the power back to founders.

I would like to share a concept that I learned during the early part of my career in the hope that it would help founders do a post-mortem of their conversation, wondering or even blaming themselves for what has gone wrong, to move on slightly easier.

Objection or rejection

An objection, simply put, is a concern that, if successfully addressed, would mean a yes or a sale or at least one step closer. Rejection is a state of mind held by the person that no matter what you say, nothing matters.

Let me give you a scenario. Imagine you are a car salesman. A serious buyer walks in and, after the test drive, remarks on the price. This could suggest he or she is seriously considering buying the car but has some reservations about the price.

Being able to recognise that would allow a good salesman to say something along the lines of, for example, the aftersale service is more, the warranty is longer, actually cars with similar specs and build are higher priced, and that may allay the buyer’s concern.

Also Read: Navigating the capital winter: Strategies for successful fundraising in a slow market

Now imagine a wife who wants to buy a car and asks her husband, who agrees to it begrudgingly and is not prepared to buy a car at all, to come along. In such instances, no matter how much your best effort is, there is almost nothing you could have done.

You can give the same rationale for a longer warranty, and he will quote you another one that is even longer. You recommend a cheaper car, and he would start criticising its build and specs. It is like playing whack-a-mole with him, and no matter what you say, a mole will just pop up.

Such conversations can be soul-crushing.

It is something I made a point of training my salesforce back then so that they could recognise it happening and concentrate on talking to the wife. Or move on and concentrate on greener pastures instead of getting themselves bogged down mentally by it.

That said, while we can do more cold calls to generate more customers to talk to, a chance to present to an investor is hard to come by, and it is only natural to feel dejected afterwards. But I hope being able to tell the difference between Objection and rejection and knowing when you never stood a chance when it is a rejection could spare you those days of ruminating in your head, pondering about what went wrong, what you could have done better.

But why would they do that, you might ask? If they are willing to speak to me, surely they cannot be that begrudgingly husband and should be seriously hunting for a good startup to be so dismissive, you say. 

Well, for starters, there is the Goodhart Law.  Most would instinctively feel like picking one out of 100 vs. one out of 1000. The latter 1 is better than the former one. That is why competitions always feel the need to announce the winner along with the fact of how many have taken part, but at times, it may mean not being able to take the time to hear everyone thoroughly and being overly assumptive. 

Understand that bias (which I also shared more on in this article) also plays a part in any conversation, and at times, nothing you had a role to play in would allow you to walk away undaunted and to keep on trying your fellow founders. 

—

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

Join our e27 Telegram group, FB community, or like the e27 Facebook page

Image credit: Canva

The post Navigating fundraising: Recognising objections vs. rejections appeared first on e27.