How To Turn Rejections Into Introductions With VC Nihal Mehta | Lady Drinks
The moment you enter into business for yourself, the long journey ahead of you is littered with all kinds of rejections.
Most business owners think that the opposite of rejection is acceptance. But, the truth is that the best way to counter rejection is to build resiliency.
And, when it comes to scaling your business, funding your idea, and creating a legacy, there are multiple ways to form that resiliency. Some are mindset and attitude-based. Other strategies are more practical, and they come from years of experience.
Recently, we sat down with VC Nihal Mehta and a panel of speakers at LadyDrinks, lobbing a range of questions from business owners in a variety of niches. Listen in and learn exactly how to turn rejections into introductions, funding, and business wins.
Lesson #1: Rejection is a Curve that You Can Flatten
Rejections spark a lot of emotional and psychological pain. When business owners are following up after the first rejection, the memory of rejection can be a hump that stalls their progress.
Nihal Mehta suggests doing the following:
→ Accept that the sting of rejection is a natural human emotion. You’re absolutely allowed to feel it.
→ Look at resiliency like a muscle — it needs the pressure of rejection, and even failure, to build up.
“After investing in a lot of companies, many of which have failed, you actually do build up a thickness in your skin. You do end up building resiliency as a muscle. The first few rejections are going to hurt. They hurt like hell. But like the 21st rejection is not more than the 20th, you know?”
Here’s the thing — the experience of rejection and the feelings it triggers is a sensation that flattens itself out. When you look at it this way, it becomes even more imperative that you “fail hard and fail fast.” You should be scrambling to get those first few rejections.
Nihal cites Jack Dorsey’s whopping 90 rejections from investors, before he found an investor that would actually back this category to find a company. There is, of course, a surprising dichotomy between men and women, on an emotional front, when “bouncing back” post rejection. Even so, it’s a journey.
And because it’s a journey, it’s important to maintain an equilibrium that will help you stay strong regardless of the fact that everyday isn’t going to be a win.
The CEO of Box, says Nihal, shared that part of being part of being an entrepreneur is managing the higher highs and managing the lower lows and keeping yourself right here.
Nihal says that, for him, it’s meditation, getting up, and working out first thing in the morning. These are the constants that help flatten and stabilize equilibrium in the face of rejection.
Lesson #2: Learn About the Threshold for Acceptance First
Once you acknowledge to yourself that rejection is inevitable, perhaps even desirable, you should seek to learn what the metrics of success would be. That way, you can aim for it.
If you’re trying to hedge against rejection for an early stage company, Nihal points to a couple of factors that can help you gain leverage. These include:
- The strength of the founders
- The experience in their particular niches and industries
- Past experiences that have contributed to their success and growth up until this point
- The size of the market
“Are they the only unique group of founders to really pull this off in the whole world? That means a lot to us. And, then, are they swinging for the fences, in terms of the market? That’s what we look for as venture investors. So we say, when companies shoot for the stars, they often fail and still land on the moon. So the market’s gotta be big, you know, for us.”
Lesson #3: Not Every Business Idea is Built for VC Funding
Knowing this matters because a rejection is never personal. And, even if it were, you should know that most business ideas are not built for VC funding.
The popularity of shows like Shark Tank, and the wide variety of Internet literature talking about B-round and C-round funding can make it seem like outside funding is not just the touted route, it’s the only route.
That’s simply not true.
Many founders have this misconception that external VC funding is the only way they can fund their business. But Most businesses are not meant for venture capital. Nihal acknowledges that VC funding is like rocket fuel, but only for very specific businesses.
Software, for example, is something that resonates well with VC funding. Things that are scalable, that don’t require a lot of human input, or ideas that require a ton of capital like Uber, can use the billions of dollars they’ll raise from funding rounds.
But there are a lot of incredible services businesses or creative ideas like artist production companies that may need funding. VC might not be the place for them — instead, they’re backed by angels, family and friends, or even like bank loans, so that they can grow.
“I think, unless you have something, like a defined digital product for example, you may not need a VC to step in.”
Instead, Nihal points to alternative resources such as crowdfunding. Campaigns run on platforms like Kickstarter or Indiegogo could potentially garner millions of dollars in funding without giving up any equity as well. And the main propeller behind this is that “regular” people are funding businesses that they want to see in the world.
High level VC funding is reserved for five or 10% of all businesses that prove to be the right fit on both sides.
Lesson #4: Use Specific Strategies to Compel a “Yes!” After You Follow-Up
There are a couple of practical techniques you can use to transform your rejections into introductions — and even wins.
Using Activating Language
When reaching out via email, you’re always trying to level up your game so you can learn and grow.
A good technique is to reach out, make an introduction, and then couch your “ask” using language like “while I have you…” In Nihal’s experience, this kind of “activating” language hooks the reader and makes the approach very friendly, casual, and coincidental.
They’re much more likely to say, “Yes!”
Use Data to Your Advantage
When reaching out for introductions or to create connections via email, data is your friend. And you should be using it to your advantage.
This means so much more than just “analytics.” Putting tracking cookies on your outreach emails and tracking whether your emails were opened or not can help you learn more about whether your emails are reaching them, are being read, or are remaining unopened.
From here, you can decide how to proceed and phrase that follow-up. If your recipient is on vacation, for example, then you know how to open up that topic.
Stay Gentle But Persistent
So what do you do if they don’t respond? You have to understand that people are quite busy and it’s not uncommon for individuals to read and then decide to get back to you later on.
Nihal himself will send two to three emails with varying language. But, as Eniac’s “human Rolodex,” he advises that you be gentle and not aggressive. Now, the data is important because, if you see that your recipient got the email and opened it, then you may consider being a little more aggressive.
After a series of sends-with-no-opens, Nihal recommends adding them to your “personal CRM.” If you add them to your monthly MailChimp mailing list, for example, then you’re still in their mind, you still keep in contact with them, but in a different cadence. That’s how you can make that individual a part of your network and you can nurture relationships with them.
They’re still “in the mix.”
“I remember…a female founder I met very early on. She’s based in Brooklyn, building a medical device workflow software for FDA approval. And by the way, we were never even looking for funding opportunities in that space. But when she pitches it it’s like the next best thing to slice bread. And when we first met her, we passed because it was too early, not a lot of traction, but she stayed in touch with us. And she did a great job of that, by the way, which is important. Create your own personal CRM people for that you meet, put them into a newsletter cycle, and email them once a month. If they don’t want to hear from you, they’ll unsubscribe. But, it’s just good to have folks that are reminded about your progress.”
Lesson #5: Build a Network and then Expand Your Brand
Another creative way to buffer against rejection (and transform them into introductions), is to take a brand- and network-building approach.
This method means you’re in it for the long haul. It might be more time consuming, but the relationships and visibility you’ll net are definitely worth it.
Nihal gets a question from a high-end residential interior designer who wants to expand her network. She’s looking for new leads outside her social circle and that of her clients, especially in the age of the global pandemic.
Here’s what he suggests:
- Imagine the most epic people in your industry (experts) and reach out to them via LinkedIn or Twitter
- Establish a virtual event conference or program and promote it on all social channels
- When people sign up, those are your new leads. Even if not everyone who registers shows up, you still have a robust boost in prospects who are interested in what you have to offer
- Your experts, their knowledge, and their workshops can help you convert customers. What’s more, they’ll also promote their presence to their own audiences
- Suddenly, you have a replacement for the tradeshow and a healthy new audience for your mailing list.
If you focus on building your network first, you may not have to worry as much about rejections because your outreach won’t be on people who are “cold” or don’t know you at all. It will be with people who know you, like you, and even trust you.
Originally published at https://ladydrinks.com on August 25, 2020.