I rarely tell a founder “no.” Instead, I say “not yet.” Here’s why…
When I first started angel investing, I thought I had to give every company a yea or nay. But over time, I realized I don’t.
Most any startup could be a great investment. It’s just a matter of whether it’s met my criteria yet or not.
Keeping Your Options Open
Saying “not yet” preserves optionality…or, as normal people would say, keeps your options open. 🙂
Saying “no” is the end of a conversation. But “not yet” keeps the conversation going.
That’s important, because none of us knows where the next Airbnb is coming from.
“None Of Us Knows What the Future Holds, My Friend”
Everyone thought Brian and Joe’s idea for crashing in spare rooms was stupid. And at first, they struggled to make it work.
What if I’d met them in year one? If I’d said “no,” they might have taken me off their list.
But if I’d said “not yet,” they might message me once Airbnb was starting to work!
And that is exactly what I what a founder to do.
It all comes down to the quote from Paulie Gualtieri in my favorite TV show, The Sopranos. None of us knows what the future holds.
When I Do Say No
I do give a clear “no” to some startups. Those are usually companies that are way outside my investment area.
So biotech would be a “no,” as would a company in an unfamiliar market like Germany or Nigeria.
I might also say “no” to a startup operating in an extremely small market. For example, an app to find firewood just isn’t addressing a large enough market to produce a big outcome.
Wrap-Up
Saying “not yet” keeps a company on the startup conveyor belt. In time, the company that wasn’t quite right might be just perfect.
If you’re investing in startups, try saying “not yet” rather than “no.” You might be surprised how yummy some of those companies look in the future.
Do you say “no,” “not yet,” something else? Leave a comment and let us know!
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