The feeling comes first
Reflecting on my time as a VC, instinct played a far bigger role than any outsider would guess, in my own decisions and in my colleagues'. You meet hundreds of founders a year. Three or four evoke a certain feeling, and that feeling is what investors are chasing constantly. Founders assume the decision is built up from the data in the deck. It is not. Emotion decides, then logic gets assembled around it. Your job in a fundraise is to be one of the three or four founders who create that feeling, which is why narrative beats traction more often than founders want to believe.
Deal flow: the game investors are actually playing
To understand any investor, understand what they are measured on. Deals arrive from three places: introductions from their network, their own research and outreach, and inbound from the fund's reputation or their personal brand. At my old fund, our primary goal was to see every deal in the market. Missing more than 5% of them counted as a significant failure against our KPIs for the year, because if we saw everything, our returns were determined purely by our own judgement. Every incentive in the job flows from that fear of missing the winner.
Loss aversion runs the room
Investors are more afraid of missing the next great company than of backing a dud. But the fear cuts both ways: if a deal looks like everyone else has already passed on it, the first question in the room is what is wrong with this company. The market gives investors very little hard data, so other investors' behaviour becomes the data. Hundreds of rejections attached to your name reads as information, even when it should not. This is why visible desperation is lethal in a raise: it tells the investor they are last to the deal, and nobody wants to be last.
What losing a deal does to an investor
Every investor loses deals they wanted, usually because they moved too slowly or never built a real connection with the founder. I lost three to Atomico, and after ten weeks with a founder, watching them sign with someone else stays with you. It made getting in early one of my explicit objectives: when I believed I had found an exceptional founder before others, I worked to close it before anyone else could see it. That is the psychology you want aimed at your round. When an investor asks themselves why they are seeing your company, the answer you want in their head is that they have struck gold early, never that they are catching something everyone else threw back.
What this means for how you raise
Three practical consequences. Arrive through a warm introduction, because it frames you as a discovery rather than a leftover. Present as early-stage momentum, never as a company grinding through rejections; how you talk about your raise status is part of the pitch. And run a tight, coordinated process, because investors move fastest when they can feel other investors moving. Rejections along the way are normal and carry no information if you frame them correctly, which is worth understanding before you hear the polite ones (what "you're too early" actually means).
The decision you create in the meeting still has to survive the fund's internal write-up. See the actual investment committee paper investors write about you, annotated line by line. Read the VC investment memo here. It is free behind an email.
Common questions
Do investors decide emotionally or rationally?
Emotion first, rationalisation second. An investor meets hundreds of founders a year and invests in the few who create genuine conviction; the diligence that follows largely builds the case for a decision already forming. The order never reverses.
What is deal flow and why should founders care?
Deal flow is the stream of investable companies an investor sees, from network introductions, their own research, and inbound reputation. Funds measure themselves on seeing everything; at my old fund missing more than 5% of the market's deals counted as a failed KPI. Founders who arrive through the network channel start with the strongest frame.
Why does it matter if other investors passed on my startup?
Because investors treat other investors' behaviour as data in a low-data environment. Visible rejection history triggers the question of what everyone else saw. You are never obliged to volunteer a rejection count, and your process should make you look early, not picked over.
How do I create FOMO with investors?
Genuine competition, compressed timing, and communication that shows momentum. Investors who have lost deals move faster the next time they feel one slipping. Manufactured urgency without substance backfires; a real coordinated process does not.
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I coach founders through the whole raise, from building the investor network to closing the round. 120+ founders so far, with $250M+ raised between them. If you're planning a raise in the next six months, here's what working together looks like.
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