Startup founders raising funding will often hear an investor say ‘You’re too early for us.

Many founders believe the investor may be a candidate for a future raise.

In reality, most investors who say you’re too early are actually saying, it’s a pass.

Experienced investors become adept at how to say no to the founder without causing resentment.

In this case, they are saying you’re okay, your startup is okay, but the timing is off.  

This implies it’s no one’s fault and it’s beyond our control.

This type of pass leaves the door open for a future discussion when the investor may be open to investing.

Investors want optionality.

They may not want to invest today but in the future, they may want to join the round.

‘You’re too early’ statement positions them to join later potentially.

In many cases, the investor doesn’t see enough traction to engage the startup.

The next step for the founder is to continue building the business and look to attach to a growth story.

There are sectors in the startup ecosystem that are hot and attract investment.

Founders should find a way to connect their startup to that growth sector to generate more interest from investors.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.