There are a few levels you can go through as a startup with a VC:
- Basic fit. "Sorry, your mobile gaming app is not really a good fit with our biotech focus"
- Does the idea make some sort of sense. If the VC thinks not, you are likely to get very generic feedback from the VC, "too early for us". There are simply too many things wrong with it that the VC does not even get started to get into it.
- No obvious hygiene issues. Difficult cap table. Unfriendly co-investors. Questionable IP. Lots and lots of follow-on investment required. VCs will usually give straight feedback, unless the issue is for example a really toxic CEO they don't like, at which point they might say "too early for us".
- Then there are the real, gentle difficult questions. Is there really a market for this? Will the regulator agree? The VC really wants the answer to these to be "yes", but needs backup to convince her partners.
Once you have reached stage 4, the VC will tell you what the issue is. And this is the main issue that needs to be cleared. All the other slides in your presentation have been bought into already. You can give a great presentation, but if you did not manage to convince the investor of the Big Question, then you are not going to land the investment. Trying to hide the elephant in the room is not an option.
The interests of the entrepreneur and the investor are aligned. You want the answer to be "yes". A good VC might even hand over data sources, give access to people to talk to, to help you make the point. Hopefully it is the start of a long cooperation together.