Having trouble raising venture capital? You’re probably doing something right.

At a Glance:

• The truth of venture capital

• Why our shame is missing the point

• How real value is created

“Investors keep saying no. I’m feeling ashamed and scared of losing everything. What am I doing wrong?” - CEO to me (actually many CEOs to me)

Rejection sucks. The polite “It doesn’t fit our thesis.” The ghosting. The “let’s keep in touch” diss. 

It feels like judgment on you as a human. 

But most founders are picking up on the wrong signal. It might mean you’re doing it right. 

The Truth 

Venture investors typically make money on fewer than 10% of their investments. 

This means they aren’t looking for great companies. They’re looking for weird outliers that can 10x or 100x their money. 

They are not operators; they are money managers with a moonshot portfolio. That’s their game board. 

When I wrote Reignition, I realized that 30% of VC investments never get off the ground. However, between the failures and the unicorns are 60% that have promise but are pushed too hard and fail due to the model. 

Those startups are like middle-distance runners, but when they raise too much VC, they’re told to line up for the 100m dash. Ill-prepared and confused, they sprint out of the gate and never make it around the track. 

You may have a strong business. But because it doesn’t match their psychological profile, a VC can’t justify the investment. And even if you took the money, you’d likely kill the company. 

This is not a judgment of you. It’s the math of their world.

The Shame Monster

I am riddled with agent rejections right now for my next book: “We love the content! Call us when you get a million TikTok followers.” 

It would be easy to fall into a shame spiral. I’m a loser. Why am I even trying? 

Founders do the same. 

As do the VC investors. I’ve seen them devastated when they can’t raise their next fund, miss out on the “hot” companies, or have a public failure. 

The shame isn’t helping. As Brene Brown says, “We can’t shame ourselves into change.”

What helps? Play a different game. 

Real Value = Long and Strong 

Why do investors say no?

• Market isn’t big enough 

• Growth not fast enough 

• Category not hot

• Doesn’t match their “pattern” or playbook thesis 

• They don’t see a sustainable moat 

What do you notice?

None of these says anything about your long-term value (even the last one, because long-term moats are often at the expense of short-term moats). 

These are signs that you don’t fit the fantasy they want to gamble on. They are signs that you are building to last. 

Where does long-term advantage arise (especially in the age of AI)? 

• Capital efficiency

• Discipline

• Customer obsession

• Ownership

• Cultural stability

• Deep Focus 

• Imagination

• Freedom to experiment

• Healthy pace

• Durable growth

• Purpose-orientation 

Sometimes the universe is protecting you from the wrong money.

Summary: 

1. VCs live in short windows. Valuable companies are architected for the long run and only raise when it’s irresponsible not to. 

2. They’re betting on one of thirty. You’re betting on one of one. Treat it accordingly. 

3. A pass doesn’t mean “not good.” It means you’re not running it like a moonshot, which is pretty risky given point #2. 

When investors pass, it’s easy to collapse into shame, self-doubt, and comparison.

Your job is not to fit into their power-law fantasy but stay focused on the lasting vision, even if it means not having a big bank account in the short term. Be strong.

Build something the market wants and customers love, that isn’t subject to unrealistic or arbitrary growth goals. Stay curious longer. Let the market pull you. Let your purpose pull you. Don’t let CAC and LTV pull you.

Rejection doesn’t mean you’re off track. It means you shouldn’t be on their track in the first place. You weren’t meant to run a sprint. You were meant to run free.

With love, 

Dave 

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