Journals usually cover what was bought. The opportunities you declined are an equally large source of learning, and the only way to know whether your reasons for saying no were sound.
10 min read · Level 4
I think an investor's declines are the more revealing half of their record, and almost nobody keeps them. What you refused, and why, shows your standards operating in real time. Reading a year of those sentences back tells you whether you have a process or a mood, which is not something the list of things you bought can ever show you.
Most people record what they did. That leaves a systematic gap: every opportunity declined disappears from the record, so the reasons behind those declines are never tested.
A decline entry can be brief:
Field What to write Opportunity what it was, in one line Date and source when it arrived and through which channel Reason for declining one sentence, written before you communicate it Confidence how sure you were What would change it the fact that would have made you say yes
A year later, these entries answer questions no other record can:
Were my declines mostly correct? Do I decline for the same reason repeatedly, and is that reason sound? Did I decline anything for reasons I would now find weak - unfamiliarity, timing, a bad first impression?
The last is where most learning sits. Reasons like "too busy that month" or "did not like the deck" look very different when read back beside the outcome.
This is not about regret over missed winners. In a portfolio of declines, a few will always succeed; that is expected. The question is whether the reasoning was sound at the time and whether any pattern in it is costing you.
Because judging yourself only on what you bought is a biased sample. You may be excellent at avoiding bad opportunities and never know it, or you may be systematically screening out a whole category that would have suited you.
Declines are also cheap to record. A single sentence at the moment of saying no is enough, and you were going to write a reply anyway.
Educational, not personalised financial advice. Nothing in the Investor Academy is a recommendation to buy, sell or hold anything — what is right for you depends on your own circumstances and the rules where you live.
A year of declines reviewed.
Reason for declining Count Outcomes since Outside my thesis 9 7 unchanged or failed, 2 did well Could not verify a key fact 4 3 later had problems, 1 did well Price too high 5 4 did well Timing, was too busy 3 2 did well
The first two categories show sound reasoning. The last two are the findings: declining on price alone missed several strong outcomes, and three opportunities were lost to busyness rather than judgement. The investor responded by requiring a written reason beyond price, and by giving every opportunity at least the short screen regardless of workload.
Recording only the investments you made, which leaves the quality of your no decisions permanently untested.
Record the real reason before sending your reply, while it is honest and specific.
State what fact or change would have made it a yes.
Group them by reason and look at what happened to each group.
Distinguish declines based on evidence from those based on timing, presentation or mood.
Every time you decline an opportunity you considered seriously.
Do not record every unsolicited approach. Log opportunities you genuinely evaluated, not everything that arrived.
Some venture firms publicly maintain lists of well-known companies they declined to invest in, describing them as reminders of judgement errors. Bessemer Venture Partners' publicly published anti-portfolio is a widely cited example.
Recording declines openly, including the reasoning, is a practice serious investors use to examine their own standards.
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