Avoiding the slow no

There’s nothing worse than the slow no—here’s where you might encounter it, and how to avoid it.

When you’re trying to get a sale, trying to raise money, or trying to sell your company, you dread the thought of the other person saying no.

But there’s something much worse than the “no,” and that’s the “slow no.” Here’s where (and why) you might encounter it:

In sales

A “no” in sales isn’t a bad thing. If anything, it’s a great learning opportunity, as long as you didn’t sink tons of time into the sale.

The problem is: it’s easy to sink tons of time into a sale that feels like it’s moving at a glacial pace—and then after months and months of effort, you finally get the no.

When this happens, it’s either because (a) this wasn’t a high-enough priority for the buyer, or more commonly (b) because you haven’t actually done the work to come to a mutual understanding with the buyer about what steps need to happen to get the sale, or who needs to be involved.

Here’s an example from a conversation I recently had with a founder: they were excited that a large company was potentially interested in using their product. The buyer wanted to run a month-long proof of concept before buying, and the founder was apprehensive about committing the resources needed to do it, but was leaning in favor.

My question to the founder was: if this proof of concept is a success, are you sure that they will buy? If you can get the deal to a point of “If this POC works, we’ll buy for $x,” then yes, you absolutely should do it. But you have to do the work up front with the prospect to make sure that’s the case—because otherwise what’s going to happen is that you’re going to complete the POC, it will have been successful, and you’ll find out that they don’t have the budget, that someone you’ve never heard of needs to approve it, or a million other things that might sabotage the deal.

How to avoid the slow no in sales

You have to do the discovery/qualification work up-front. Is this going to be a good customer for us? (Can we serve them well?) Do they actually have real pain here? Is this a top-three priority for them? Do they have the budget to buy this? Who actually needs to be involved in the decisionmaking process, and have you met with (and made the case to) all these people?

If the answer to any of these questions is “no”, you risk losing the sale after months and months of unnecessary work.

In fundraising or acquisitions

I’d originally written this as two sections, one about fundraising and one about acquisitions, but there are enough commonalities that it makes sense to combine them:

The danger of the slow no in fundraising or acquisitions is that it’s super-morale-destructive. You and your team have gotten your hopes up about this transaction going through, you’ve imagined what the future looks like, and probably work has ground to a halt while you’ve tried to get this process to execute rapidly—unsuccessfully.

The slow no here stems from a lack of interest or a lack of urgency. And the reason it’s not a fast no is that it’s not in the investor/acquirer’s interest to tell you no right away—why not keep things warm, just in case it turns out to be interesting later? The VC associate or junior corporate development person’s job is the same: to keep tabs on all startups that even might potentially some day be possibly interesting, even if there are no near-term plans to do anything at all.

How to avoid the slow no in fundraising or acquisitions

Two things are needed: first is actual conviction from the right person at the acquirer/investor.

At a company, this means an executive of the company needs to be sponsoring the transaction. (Corporate development doesn’t decide to buy companies on its own—they buy companies on behalf of the business, and there needs to be an executive who is the champion of the deal. If there isn’t, you don’t have a real deal.

At a venture capital firm, this means a VC partner, and preferably one who is more senior and has sufficient pull with the other partners. Associates and analysts don’t write checks.

But that isn’t sufficient to make things go fast. To truly prevent the slow no, you also need a compelling alternative. Meaning: you have to either have another credible buyer or investor that’s also poised to move quickly, or you need to actually be willing to walk away.

Wrapping it up

The reason the slow no is dangerous is because it wastes your time. If you’re going to get to “no”, get there quickly. The way to do that is to make sure you understand who your counterparty is, what they actually care about, and what their decision criteria are—and use that to get to clear, mutually-agreed-upon next steps.

(This is, incidentally, also just good life advice.)