Private Angel Investor - How to Take Their NO!

Picture this scenario and let me know if it sounds familiar. Youve met with a potential private angel investor about your new startup opportunity. During the meeting the private angel investor told you that the business plan sounded interesting and they really liked the opportunity. They enthusiastically shook your hand on your way out the door and you left feeling elated.

Days later you waited patiently by the phone for a follow-up call, but the phone didnt ring. You checked your e-mail, your instant messenger, and your text messages nothing. The days soon turned into weeks and somehow you never heard a peep from those highly interested private angel investors.

What went wrong?

The short answer is that nothing went wrong - thats the way private angel investors work. You see, private angel investors speak a very different language that most entrepreneurs have a hard time translating. They tell entrepreneurs that they are excited about a business opportunity which entrepreneurs of course take to mean they are ready to invest.

What they really mean is that they have no interest in investing in your company, but they want to leave the relationship on a positive note in case they ever change their mind. Its like going on a date in high school with someone and not officially telling them youre not interested just in case one day they turn into Brad Pitt or Angelina Jolie.

Why Private Angel Investors Cant Say NO Directly

The truth is that private angel investors cant afford to say no to any opportunity in a direct manner. Most opportunities that pass through their door might sound terrible today, but tomorrow they could be the next MySpace or Google. Smart private angel investors know that theres no value in ruining a relationship with an entrepreneur just because the deal doesnt make sense today.

This is of course completely maddening to the entrepreneur. In life were used to hearing no when someone means no. To make matters worse, entrepreneurs are so excited to get their deals funded that they often perceive anything that isnt a heck no to mean yes.

The Art of the LONG NO

Private angel investors have made what I call the long no into an art form. Theyve found dozens of ways to avoid saying no while meaning no way. The result is a long, roundabout way to tell you no without actually saying it. To help you understand this process a little bit more, let me give you some examples of what the long no sounds like.

The long no often involves some iteration of the phrase interesting. Youll hear something like sounds interesting or this could be real interesting which of course sounds like a positive response. In reality, its the equivalent of describing your not-so-attractive date as having a really good personality. You dont want to offend them, but you dont want to tell them what you really think either.

Although it may sound counter-intuitive, you dont want to be interesting. You want to be invested in, which means you need to get as quickly past sounds interesting as possible and get right on to we really want to get this deal done today.

Youll also get a fair amount of let us think about it or let us get back to you. These are also telltale signs of the long no. Private angel investors run across very few deals that are exciting enough to invest in, so you can imagine the ones that they like get their immediate attention. They didnt forget to call you back they are just ignoring you.

Entrepreneurs often think of pitch meetings with private angel investors they way they think about sales meetings with customers. Sales meetings usually involve follow-ups with an eventual close after the decision-maker has had time to decide.

Private angel investors on the other hand are more likely to have made their decision before you even walk out of the room, whether they express it or not. Therefore you can imagine if they are not following back up with you right away, your deal probably isnt going to get done.

The Answer Is NO Until the Check Clears

Instead of driving yourself crazy listening to private angel investor double-speak and corporate euphemisms, perhaps you should try this piece of advice assume the answer is no until the private angel investors check clears.

That may sound overly pessimistic but youll probably find after spending enough time with private angel investors thats its a far more pragmatic approach. Its typical for an entrepreneur to spend 6 9 months trying to raise capital (if they raise any at all) and most of this time is spent being misled by private angel investor reactions.

Assume everything an private angel investor says that doesnt involve writing a check is as good as hearing the word no. Even if you are fortunate enough to get into the nitty gritty of a deal where you begin to talk through specific deal terms dont assume the answer is yes. Assume the answer is absolutely no until the private angel investor has written the check and handed it to you. And then assume its no until it clears.

Wil Schroter is the Founder and CEO of the Go BIG Network, the largest network of startup companies and entrepreneurs. He is also the author of the new book Go BIG or Go HOME, download it for FREE at http://www.GoBIGnetwork.com.Shirl Blog33973
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