In 2008, a then 27 year old Brian Chesky was raising his seed round for AirBnb. He was introduced to 7 very prominent investors in Silicon Valley by a friend of his named Michael Siebel.
His team was looking to raise $150,000 for AirBnb at a $1.5 million valuation. Essentially, if an investor had invested $150,000 in their startup back then they would have owned 10% of the company (valued at $2.5 billion today).
But even Airbnb, a Y Combinator alumni, got rejected multiple times by various investors. Here are the rejection letters posted by Brian on his blog.
Mr. Chesky leaves us with a quote:
Next time you have an idea and it gets rejected, I want you to think of these emails.
Remember, when you’re fundraising, you are going to get rejected. That’s just the nature of fundraising.
It’s important to think of a couple things. Rejection is not necessarily because your idea is bad or can’t work. Sometimes it’s just not a good fit. Some of the investors that Mr. Chesky emailed probably didn’t have the domain expertise to help that company, and therefore rejected the offer to invest. Other times investors want to mitigate their risk by joining in at a later stage, like a series A round. It’s important that even without investment that you keep working on your startup and pitching to more and more investors.
Fortunately for Brian Chesky and the rest of the world, AirBnb didn’t decide to just give up and now they’re poised to be one of the most valuable companies in the world.