Why I won't invest

01 Jan, 2024

Between the pre-seed and seed rounds for Griffin we pitched nearly 200 different investors. These are some of their reasons for saying no.

• It's too early¹
• *sound of investor ghosting*
• Brexit
• The market is too small
• The market is huge, but only if you expand to the US, which we don't think you can do
• The market is huge and has experienced massive growth but we feel there is no more growth to be had
• The market has long-term commodity pricing dynamics so there is no profit to be made here
• Your customers are too small and not enough of them will grow beyond that
• You won't get a bank license
• Your team doesn't have enough people with banking experience
• We think the product is too simple
• We think you will not be able to build a product
• It will take you too long to build a product
• We see strategic value here, we just want to wait until we can engage commercially [from a strategic investor]
• We see strategic value here and we think this would be a good investment, but we're only investing in AI and blockchain companies right now [from a strategic investor]
• You're not raising enough capital now - you need way more
• You're raising too much capital now - you should try to do a smaller version of what you're doing
• You will have to raise a lot of capital in the future and we're not sure you will be able to
• You will have to raise a lot of capital in the future and that will dilute our ownership stake
• We're not comfortable investing unless you as founders invest £[more money than we have]
• It has taken you too long to raise this money
• What are you talking to us for? You should raise with an ICO!
• We're too small of a fund for this
• We're too big of a fund for this
• [vague excuse to cover for the fact that they are in between funds]
• [honest statement that they are in between funds]
• We only invest after revenue/product-market fit [from a seed fund]
• You don't know how to sell this
• We like to see an "explosive" sales pipeline
• We don't invest [in the UK / in the EU / outside of the US]
• We don't invest in firms that aren't EIS eligible out of preference
• We don't invest in firms that aren't EIS eligible out of legal requirement
• You have too many competitors
• The biggest firms in your space aren't doing this, therefore it's not worth doing
• These businesses aren't fundable
• Your competitors are too well-funded
• We don't understand what differentiates you from your competitors
• Your competitors are executing badly now but they will start to execute better in the future
• [summary of efficient markets hypothesis]²
• "The solution is somewhat derivative"
• You don't have a competitive moat
• We have a competitive investment in [competitor]
• We have a competitive investment in [not a competitor]
• We don't have the expertise to evaluate you
• This is out of scope for us [from a fintech fund]
• We don't have conviction about what the future of this space is

Honorable mentions: unreasonable conditions

• We'll only consider investing if you can bring a second institutional investor to the table
• We'll only invest if [a major strategic firm] takes a stake
• [once we actually had a term sheet] We'll invest if you let us invest on the terms of your last round
• [once we actually had a term sheet] We'll invest a very small check if you give us a 40% discount and a board seat

And a recommendation for aspirational VCs reading this: