Nov 20 2007

Don’t Ask For A Referral If I Say No

Fred Wilson wrote an excellent post last month titled Saying NoI thought of it today when I found myself tangled up an in email exchange with someone I said no to.

I won’t repeat what Fred said (his post is worth reading) but I’ll add to it.  I get tons of inbound email from entrepreneurs (and bankers, and lawyers) pitching new investments.  I take a look at all of them and always try to respond within a day.  I say no to many of them, but I’m happy to be on the receiving end of them (and encourage you – dear reader – to send me stuff anytime.)

When I say no, I try to do it quickly and clearly.  I try to give an explanation, although I don’t try to argue or debate the deal.  I’m sure that many of the things I say no to will get funded and some of them might become incredibly successful companies.  That’s ok with me and – even if I say no – I’m still rooting for you.

However, if I say no, please don’t respond and ask me to refer you to someone.  You don’t really want me to do this, even if you don’t realize it.  By referring you to someone else, at some level I am implicitly endorsing you.  At the same time, I just told you that I’m not interested in exploring funding your deal.  These two constructs are in conflict with each other.  The person I refer you to will immediately ask me if I’m interested in funding your deal.  I’m now in the weird position of implicitly endorsing you on one side, while rejecting you on the other.  While this isn’t necessarily comfortable for me, it’s useless to you as the likelihood of the person I’ve just referred you to taking you seriously is very low.  In fact, you’d probably have a better shot at it if I wasn’t in the mix in the first place!

While I’m concerned about my time, it’s secondary.  I can say “no” a second time (to your request for a referral) very quickly and – if I’m so inclined – I can point you to this blog post. 

Somewhere in a parallel universe, someone trained a bunch of us (probably Networking 101) to always “ask for something” when you hear a “no” (e.g. keep the conversation going, get a referral, try a different question.)  There are cases where this isn’t useful – to you.