This is an A+ reply when a prospective investor has passed on your deal.
(1) He replied.
(2) He expressed gratitude for our time, diligence, and feedback.
(3) He acknowledged the issues and respected our perspectives.
(4) He resisted the temptation to protest our viewpoints.
(5) He reciprocated our motivation to collaborate on something else in the future.
This impressive sponsor had a compelling SaaS deal that we nonetheless decided to pass on. Providing the sponsor with feedback is the least we can do, and a “rejection” email typically includes a handful of observations that led to our decision.
The natural instinct for a sponsor is to address, explain, or protest these issues. After all, they are usually aware and have managed to get comfortable.
Some sponsors, typically those less experienced or more desperate, may even plead that we reconsider. This is futile; when an investor passes they’ve moved onto the next deal.
