Ask HN: How would you treat a VC who turned you down but now wants to invest?

3 points by kiyanforoughi ↗ HN

10 comments

[ 2.8 ms ] story [ 38.8 ms ] thread
The same way you'd treat any other VC who wants to invest.

You may have an additional data point to consider if this VC behaved badly in the past.

Don't consider punishing the VC for not believing in you or something similarly silly. It's just business.

Do you feel resentment over his/her previous rejection?
No resentment. We're in the situation where several VCs rejected us because they thought another player (who has raised way more than us) was the better investment. Now, "the better investment" is crashing and burning, and all these VCs are turning to us.
What do you need the money for?
See my response above. We don't actually need money at the moment. We just raised 2 months ago :-)
Knowing this, my advise is to kindly explain that they are too late this time but that they are considered for next round or new plans.
Treat them the same way you'd treat any other later-round VC investor. If you're going to need to do substantial work with them but feel this will be difficult you can certainly bypass them, but unless the initial rejection was for something other than legitimate reasons then get over it.
Many large startups who've gone on to raise multiple large rounds have taken money from VCs who've rejected them previously, it's not uncommon as VCs reject companies for a whole host of reasons many of which have nothing to do with how much the VC likes you/your vision/etc.

In practice what really matters is your relationship with the VC and the the partner who's leading the round.

If you feel resentment or that they don't understand your business then politely decline and move on, it'll be in no-ones interest if you take their money while feeling angry at them. If you're feeling ambivalent then consider them like any other VC you're evaluating taking money from.

- Before I do business with them again, I would want to know why they changed their mind in the first place.
Don't get emotional or do ego-trips.

Get into cold business transaction attitude. This will make it win-win for everyone.