Q: We pitched to a venture group 3 times in July and August. They kept telling us that they were very interested and wanted to learn more about our venture so we shared complete details of our venture hoping that they would invest.
Now for last 6 weeks they have gone completely silent. They used to respond to our emails within hours but now…no response to emails or phone calls. Once we got one of their partner on the phone and he promised to call back and hasn’t yet. We would like to move-on. Are we nuts? Why would they spend so much time then behave like this? Why won’ they just say "NO" to us?
A: (Jason) To answer your first question, no, you aren’t nuts and yes, you should move on. Clearly they aren’t interested in funding your company.
The bigger questions is "why do some VCs act this way?" I really don’t know or understand this behavior, but it’s not uncommon. We hear on a regular basis from entrepreneurs that VCs frustrate them this way.
What’s probably happening is that they have other companies in their pipeline that are sorting higher in interest than yours, but they’d like to keep you as a potential option if their other opportunities disappear. That being said, I’ve never heard of a situation where a VC lead goes completely cold and then becomes hot again. Think of this similarly to any romantic relationship that you’ve ever had.
We think it’s really important to say "no" quickly. While it’s not always easy to say no (see Brad’s post on "Why am I passing?"), it really is the most fair thing to the entrepreneur, even if hard to hear. Dragging the process along does no one any good. Sorry to hear about your experience – not all VCs are this way.