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When Rejection Becomes Protection: A Startup Lesson

Every entrepreneur faces rejection, but not every rejection tells the same story. Sometimes what feels like a devastating “no” in the moment reveals itself as a blessing in disguise. This is the story of how one investor’s deceptive behavior taught me that some rejections are actually protection.

The Setup

In one of my first businesses, we were almost out of money. An investor who had been stringing us along for months invited us to a steak dinner to discuss the terms of his investment.

We never would have chosen this restaurant, and my partner and I tried to order the cheapest thing on the menu.

Red Flags in Plain Sight

The evening should have been a celebration of our upcoming partnership. Instead, it became a masterclass in recognizing red flags.

While we carefully selected the most affordable options, conscious of our dwindling funds, our potential investor showed no such restraint.

Moment of Truth

When the bill came, the investor said, “How do you wanna do this?” dropped a $50 bill on the table, and left in his $200,000 car.

His steak alone was $49.99.

Unsurprisingly, he never invested in our company.

Conclusion

This experience taught me that some rejections are protection in disguise. The investor who seemed like our salvation would have likely brought more problems than solutions.

In fact, a couple of years ago, I saw an article about him being sued by the federal government for massive tax fraud.

In that moment, everything clicked into place. What had felt like rejection was actually protection.

For more entrepreneurial stories and insights, visit https://noahberkson.com.