Recently, one of our companies presented to another venture group as they were out looking for their next financing round. After a reasonably positive report on the meeting from the CEO, he received an email from the firm that was said something like “We think you’re tackling a huge opportunity, but we don’t have the bandwidth to take on such a deal. However, we’d love to keep an eye on you to possibly invest in the future.”

Have you ever given an entrepreneur that exact feedback? I know I have. Fortunately, one of the other partners at that firm is a good friend, and we were able to get the constructive feedback that we needed to make sure the CEO could improve his story.

As a venture firm that was out raising a fund a couple of years ago, we experienced very similar situations when we were on our own fundraising trail. We were an emerging manager raising a fund during one of the most difficult cycles ever so, suffice it to say, it wasn’t easy or straightforward. It was particularly difficult getting real feedback from LPs after our meetings, and we often wondered what LPs really thought about our story, as we were working hard to get some initial commitments over the line.

I can’t tell you how many LPs we met with that gave us a response like “The hurdle is really high with us, so we’d like to keep an eye on you for a few funds before investing.”

That’s it. After flying across the country to make a presentation to an institutional investor, that’s what we got, and in an email for that matter and only after we asked to get the feedback. While the net result was that we persevered and landed an unbelievable group of LPs, there was one investor that we didn’t get that had just as much to do with our fundraising success as the ones who we did. What did they do? While their formal response was “No thanks,” they actually took the time to explain to us specifically the areas they were questioning. Their feedback gave us much better clarity on what the LP community at large thought of our story, which then inspired us to make some key changes that eventually got us to success. We internalized the information, revamped our positioning and story and resurfaced a later with a new and improved pitch that ended up really resonating with the investment community.

I ran into that special LP the other day, and I thanked her for having such a huge impact on our company. I told her that we likely wouldn’t be where we are today if we hadn’t received the direct and detailed feedback that inspired us so much.

So the next time you find yourself evaluating a team, and for whatever reason, you’re intrigued, but decide that the team isn’t your cup of tea, try to give them some constructive feedback that they can work with. Avoid sending another one of those responses that looks like it was cut and pasted from your previous 43 rejection emails, and at the very least, give them a response that represents some form of closure so that they don’t keep you on that spreadsheet that tracks investor candidates.

If you’re worried that the recipient of this feedback will simply go off and try to fix the problem only to show back at your doorstep with a new pitch – don’t worry about it. The downside is that you’ll have a slightly uncomfortable discussion that tells them point blank that you’re not a good candidate for them. The upside is that you’ve inspired a group to clean up their story to your liking, and now you’ve got the inside track to being their top choice when the deal gets competitive.

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