Raising capital is exhausting. Trying to convince every investor to say yes will burn you out.
Most investors will say no. Some will be lukewarm. A handful will get it—and those are the only ones who matter.
It’s easy to get caught up in venting about investors. I get it, investors can be contradictory, frustrating, and slow-moving. And I strong believe that it’s healthy to talk openly about your struggles and share war stories (I love it when founders vent to me).
But blaming investors for your situation is a quick way to a dark place.
Rejection is painful, and it’s human nature to want to protect yourself from it. But instead of fighting it, embrace it. Investors don’t owe you anything. Your job is to find the ones who see the world like you do.
1. Investors Are Not One-Size-Fits-All
Founders often assume investors all think the same way “what do investors want”, but no two investors are alike.
Each investor is shaped by:
Their life experiences and personal biases
The type of investor they are (VC, angel, family office, corporate, etc.)
Their investment constraints (cheque size, available funds, stage, sector, investment timeline)
Who they answer to (LPs, investment committees, or just themselves)
How they define success (10x return, strategic exit, supporting a mission) and how they define failure
Personal characteristics (their values, religion, life stage, dependents, goals etc)
💡 Example: Some investors love technical founders, while others prefer commercial founders. Some only back repeat founders, while others look for first-timers solving fresh problems.
💡 Key takeaway: If an investor says no, it’s rarely about you personally. It’s about their own constraints, strategy, and worldview.
My partner and I have been watching it recently and whilst I dislike a lot of what happens on Shark Tank, I do really love how it is great illustration of how diverse investor’s opinions are.
On Shark Tank all the investors see the exact same pitch at the same time, but their responses are completely different shaped by things outside of the founder’s control.
Check out these examples:
iCapsulate – Each investor saw different value and traction in the business.🔗 Watch here
Popup Play – Every investor except one said no, proving how subjective investment decisions can be.🔗 Watch here
Just Jerky – Investors had completely different views on valuation and risk.🔗 Watch here
It’s like buying property. Some buyers pay a premium for a house near a park or school, while others don’t care about those things and would pay 30% less.
Your job as a founder is to find investors who see the value in your company the way you do.
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2. Why Investors Say No
If you’re doing something truly innovative and experimental, then most investors should say no as innovations and experiments are risky and imperfect and investors have to get creative to fill in the gaps.
Investors pass for hundreds of reasons, many of which you can’t control but here are some common ones:
It doesn’t fit their investment thesis. If you don’t fit their focus (stage, sector, geography), they won’t invest, usually no matter how great your startup is.
They have past scars from similar investments. Some investors have been burned before and avoid entire categories.💡 Example: A VC lost money on a MedTech deal a decade ago and now avoids all MedTech startups, even the great ones.
They don’t understand it. Many investors stick to what they know. If they don’t get your tech or business model, they’ll pass.💡 Example: If an investor has only backed SaaS startups, they might struggle to evaluate a deep tech or hardware company.
They already have a competing company in their portfolio. Even if they love your company, they may not invest due to conflicts.
They don’t believe in the market timing. Some think your category is about to explode, others think it’s too early or too late.
They have their own constraints. Maybe they’ve run out of capital, they’re focused on follow-on investments, or they’re just not making new bets right now.
💡 Key takeaway: Get quick nos. Don’t force them, but don’t waste time on investors who were never a fit in the first place.
3. Rejection is Part of the Process
Just like sales, fundraising is a filtering process. Your goal is not to convince everyone, it’s to find the right ones.
Even the best startups get rejected constantly. The key is to separate your and your startup’s worth from the investment decision.
A rejection doesn’t mean your business and you aren’t great. It just means that for that investor, at that moment, the investment doesn’t work.
Some investors want bigger markets
Some want more traction
Some only invest in certain regions
Some are waiting to see what other investors do first
Rejection isn’t failure, it’s just part of the game.
Want more Aussie founder cap raising content?
Check out some of my other articles on fundraising.
The Nerd Invites: Harikesh Pushpapathan on Raising Capital in 2025
Pre-Money vs Post-Money SAFE Notes in Australia: What Founders Need to Know
Australian Startup Red Flags That Investors Watch Out For: What You Need to Know
First Investor Meeting? Questions Aussie founders should ask startup investors
How long does it really take to raise startup capital in Australia?
ASIC and Competitors - A Practical Guide for Aussie Founders
4. How to Align with the Right Investors
The best fundraises don’t happen by pitching every investor in the market. They happen when founders focus on the right ones.
Step 1: Understand the Investor’s Perspective
Before pitching, ask:
What drives this investor’s investment decisions?
Who do they answer to? (e.g., LPs, their partners, or just themselves)
How do they define success? (Are they looking for 10x returns, an IPO, strategic synergies?)
What constraints do they have? (Fund size, cheque size, sector, etc.)
💡 Tip: As a founder, prior to engaging an investor, you may not be able to know that investor’s personal biases or emotional triggers. But an experienced industry insider (like me) who knows the landscape may have a pretty good idea who your company, founding team, and narrative will resonate with most.
Step 2: Build Your Ideal Investor Profile (IIP)
Before reaching out to investors, make sure that your Ideal Investor Profile (IIP) is clear. Define what makes an investor a good fit for you.
Commons Characteristics:
What type of investor am I targeting? (Angel, VC, family office, corporate VC, etc.)
What cheque size do I need?
Do they invest in my sector?
Have they backed companies like mine before?
Are they actively investing right now?
Do they provide follow-on capital for future rounds?
What do they expect from a company like mine?
How do they measure success?
💡 Beware: Rules are made to be broken. Investors regularly make their first bet in a new sector or stage so it’s hard to know if they are a viable investor or not. The hope that you can convince them to invest outside of their comfort zone can drive founders to burn out.
Just like early sales, you don’t have the resources to focus on everyone. You have to prioritise your Ideal Customer Profile (ICP) in sales and your Ideal Investor Profile (IIP) in fundraising.
5. The Right Investors Will Back You (And That’s All That Matters)
The right investors usually see what you see reasonably quickly.
You don’t need every investor to say yes. You just need the right ones.
💡 Example: The right investor usually will:
Get excited about what you’re building quickly
Move quickly to the next steps
Ask smart, engaged questions
Offer helpful suggestions
If an investor isn’t doing these things, they’re probably not the one.
Most will say no. Some will be lukewarm. But a handful will get it. Focus on them.
That’s how you raise capital smarter.
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Hi - I’m Warwick Donaldson—capital raising expert, and unapologetic advocate for Australian startups. Across my career, I’ve worked on 160+ equity raises totalling over $400m. I pride myself on helping early-stage founders secure funding, avoid costly mistakes, and build investor confidence.
If you’re a founder looking to raise capital, attract top-tier investors, and build a generational business—then hit me up for a chat.
Disclaimer: Excentricity Pty Ltd, trading as CapXcentric (ABN 42 679 978 959, AFS Representative No. 001311296) is a Corporate Authorised Representative of True Oak Investments Pty Ltd (ABN 81 002558 956, AFSL 238184). The information provided in this article is intended for companies and startups and is not directed towards investors. Any statements or representations are general information only and do not take into account your personal objectives, financial situation or needs. Readers are advised to have regard to their own circumstances and consider seeking specific advice from a professional adviser before making any business decisions. No representations are made as to the accuracy, completeness, or reliability of any information provided in this article. Readers use the information provided at their own risk.