Any entrepreneur who has ever tried to raise capital hears “No” a lot more than they hear “Yes”. This is particularly true for impact fund managers in underserved markets. On rare occasions, you might get an immediate “Yes”, but you’re more likely to get an immediate “No” or something in between.

Raising money is hard. It’s a grueling process that requires perseverance and grit. As most of you raising capital know, the vast majority of the asks won’t result in an immediate, clear-cut response. Given that reality, we thought it would be helpful to share our insights on how to best approach investors and get a clear answer from them.

Let’s assume you’ve done your homework, gotten an introduction from a trusted contact, and had your initial meeting. If get an immediate “No”, ask them

• If they could provide specific feedback on why they declined
• If there is anyone else that they would suggest you target for investment
• If they would like you to keep them updated as things progress (and add them to your mailing list if they say yes)

If you piqued their interest, you’ll likely hear one of three things:

• “We’d like more information”
• “We need to discuss this internally and get back to you”
• “We’re interested but we’re not sure if it is a fit for us at this time” (this means “No”)

So what are some approaches to get to “Yes” or “No” more quickly? Below are five strategies that you can put to immediate use which come from our years of experience working with investors and fund managers

1. Clarify the Process & Timeline: At Capria, we have an established process of application review, calls with each Partner/Principal at the firm, reference checks, and additional information requests. The date for the Intensive (our multi-week in-person working sessions in Seattle), drives our timeline. Although we’ve had full submissions from more than 150 teams, only a few proactively engage us about our process and timeline . An investor timeframe is important to know so you can add it to the attributes you use to determine an investors overall priority in your pipeline.
2. Understand How Decisions are Made & Identify Your Champion: In some institutions this may be a single person. In others, moving forward might require unanimous agreement among senior leadership. At Capria, we require a unanimous consensus among our Partners/Principals. Interestingly enough, I can only remember one time I was asked about this area. Figure out how decisions are made early in the process so that you know how to best engage, as well as who you ultimately need to convince. Understanding large organizations, such as Development Finance Institutions (DFIs), takes time but it is time well spent. As you get to know the organization, you can identify other opportunities to work together or gain clarity on how to best position your offer. Figuring out who will make the decision is key, but you’ll also want to have an internal champion. This person will take the extra time to give you additional insight and help you prepare for what’s to come. It’s far more impactful for an internal champion to sell your story. So figure out who really “gets” you and work with them as an extended part of your team.
3. Following Up with the Right Information and Managing Expectations: We have some pretty aggressive timelines associated with our requests. Following up and responding promptly helps you stay relevant. Always try to summarize your understanding of the information needed in order to move the process along. Most of us have heard the dating analogy. Is it your first date or second date? Have you been dating a couple of months? Depending on where you are at in the process, the level and depth at which you are sharing will vary. If you already know there are particular areas of concern, consider providing some more information to directly address those items. As you move through the process, be sure you’re managing expectations. You should know what deadlines and information requests are coming next and if you’re not clear, ask. Investors also need to know what to expect from you. If there isn’t a deadline provided, respond with the specific date you’ll have things ready for them. If a deadline is provided, get it done.
4. Create a Sense of Urgency: Deadlines drive action. Your investors will have deadlines. Do you? As an impact fund manager, you need to be clear on when you’re going to hit first close. If an investor’s timeline doesn’t align with yours, ask them if there are opportunities to expedite the process. If you can, work with them to identify a path forward that satisfies mutual time constraints. In the event it’s not a fit for a particular investment cycle, clarify when it makes sense to reengage.
5. Understand if it’s a soft or hard “No”: There could be a number of reasons why someone said “No.” If you’re going to get to “Yes,” you need to know the crucial elements to take into account. In some cases, there may be an opportunity to re-open the dialogue with the investor sooner rather than later. In order to understand if that’s an option, you need to identify critical concerns and evaluate if:

1) The investor is receptive within a particular timeframe

2) Re-engaging with the investor is worth your time.

Either way, drive towards a definitive answer. If the result is still “it’s not a fit at this time” then identify an appropriate date to reengage.

Not getting a clear cut answer is actually worse than a straight “No.” Of course the desired result of any investment pitch is “Yes,” but getting to “No” will save you valuable time and allow you to focus your energy on other opportunities.