Getting ghosted is never a pleasant experience, especially when you’re a founder seeking funding from investors. It’s much like dating—you’re left wondering why an investor hasn’t responded after an initial pitch or even after what seemed like a promising meeting.
Ghosting is often a clear indication of a lack of interest. If a VC wants to invest, they will respond. But why do VCs vanish without an explanation? Several investors shared their insights with TechCrunch to help founders understand why this happens.
The Role of Time in VC Decision-Making
Time is one of the most valuable resources for VCs. Mercedes Bent, a partner at Lightspeed Venture Partners, highlighted in a viral LinkedIn post that writing thoughtful rejection emails takes effort. If a deal won’t convert into an investment, it often gets deprioritized.
The investment landscape has also changed significantly over the past decade, with an increasing number of firms, more capital, and a surge in startup pitches. This rapid growth has led to a high-volume, fast-paced decision-making process, making personal rejections even less likely.
Sheel Mohnot, co-founder and general partner at Better Tomorrow Ventures, admitted that things slip through the cracks when he’s overwhelmed. Fundraising periods, events like Money 2020, or investor meetings can contribute to lapses in communication.
To manage the volume of inbound pitches, Eric Bahn, co-founder and general partner of Hustle Fund, relies on automated email responses. He receives about 30 pitches per day and uses a permanent out-of-office message guiding founders to submit their pitches through an investment team form. However, he insists that if he has already taken a meeting with a founder, he will always provide a response.
Red Flags That Lead to Rejection
AI-Generated Cold Outreach
Ironically, while VCs are investing heavily in AI startups, many of them dislike receiving AI-generated cold emails. One anonymous investor revealed that the influx of AI-generated outreach has become overwhelming, making it difficult to filter genuine pitches.
Lack of Self-Awareness
A major red flag for Bahn is when founders claim their startup has no competitors or existential risks. When asked about potential threats, a surprising number of founders insist their business is bulletproof. Investors prefer founders who acknowledge risks and have strategies to mitigate them.
Unrealistic Expectations
Mohnot is skeptical of founders who claim their startup will immediately disrupt an industry or who provide overly optimistic financial projections without solid evidence. Overpromising without a clear execution strategy is a major concern.
Team and Technical Depth
Investors also pay attention to the founding team’s dynamics and technical expertise. Tension among co-founders, lack of complementary skills, or an overemphasis on fundraising rather than building a sustainable can all be red flags.
Misrepresentation and Dishonesty
Rex Salisbury, founder of Cambrian Ventures and former partner at Andreessen Horowitz, views outdated pitch decks as a warning sign. However, misrepresenting numbers or lying about deals is an instant deal-breaker. Mohnot recounted an incident where a founder falsely claimed a partnership with a startup in his portfolio—something easily debunked with a quick text.
Founder Behavior That Ends Conversations
Beyond the pitch, a founder’s behavior can also influence a VC’s decision.
- Offensive or Disrespectful Language: Bahn recalled a founder who insulted a competitor using derogatory language. Such behavior is an immediate red flag.
- Disrespecting Rejections: Some founders react poorly to rejection, resorting to name-calling or threats. Bahn noted that this behavior disproportionately affects female investors. Once a founder reacts aggressively, they risk being blacklisted.
- Speaking Negatively About Others: Investors pay close attention to how founders speak about past investors, colleagues, or partners. Badmouthing previous connections can indicate a lack of professionalism.
The Reality of Ghosting
While investors acknowledge that ghosting is not ideal, many believe it’s an unavoidable part of the industry. As Bent put it, “It’s the reality. It’s the game.”
However, she also emphasizes the importance of mutual respect. Founders should treat investors how they wish to be treated, as relationships in the venture world can resurface unexpectedly. The key takeaway? A simple “no, thank you” from both parties can go a long way in maintaining professionalism.
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