"and they are more than willing to waste your time. "
But why? What is the motive for doing so, if they don't want you?
First, there's an asymmetry in effort; it costs them very little to ask for things (keeping them informed on progress, having due-diligence calls with their network, &c) that can cost you a lot to provide; second, in exchange for their minimal efforts, they get optionality, which negates FOMO, which is the real reason they invest.
Maybe things have changed in the last couple years, but for first raises for companies, this wasn't like, "a thing that happens sometimes"; it is the normal, standard behavior of VC firms. People who are good at raising have strategies for dealing with it.
They have no idea whether you are something valuable or not. They are gambling, and it's their job to find undervalued companies. To them, there's zero benefit to ever closing the door. If they close the door, you won't come back, and someone else makes all the money. They will keep it open forever, in case your little company turns out to be the next Facebook or Google. They are not actively seeking to waste your time, and they are not wasting their own time. By not saying yes, and leading you on, they are telling you they don't see you as a gold mine yet.
Re:How to Raise Money (2013)
by tedunangst on Thursday October 25, 2018 @05:58PM
(#18304934)
If you're actually successful and raise money elsewhere, they miss out. Better to keep you around so they can wedge in if something happens.
Nobody is expecting VC firms to say "no, and never reach out to us with this idea again". Maybe you haven't had the experience of raising from VCs before, so I'll relate it to you: they mostly say yes, and actually put some effort into making you believe they're actively interested, right now. They aren't. It is very difficult to know where you stand with them (right now), and they are more than willing to waste your time.