[copyhackers]

I dunno, but when it happened to me, it totally derailed everything. It was one of those moments when you want to argue with the prospect - "As if funded companies don't go out of business?" - but that's probably not a good strategy. :) So I just sat awkwardly and tried to explain that we'd been approached by VCs but hadn't pursued anything.

I hope it doesn't come up that often. I worry, though, that it's actually some sort of signal to the average prospect (who's not in the startup world).

[x0x0]

patio11 has talked about this

One approach -- besides make sure you have an answer ready to go next time -- is to talk about two things (straight up stolen from patio11, but if there are mistakes in memory, they're mine):

1 - who do you think you matter more to, some company with thousands of customers or me?

2 - I don't give a shit what their SLA says, when you call late at night, you don't get eng. If you call my cell, you get the person who wrote it all. Who is going to get your problem fixed faster?

[patio11]

The real kicker to this line of argument is "When you call BigCo at 3 AM, you will get someone who listens attentively to your problem but cannot do anything to help you. When you call at 3 PM, you will get... an interchangeable replacement for that person. If you prioritize getting the problem fixed versus someone picking up the phone, pick us: we work defined hours but all of your requests will be handled by the person who build the system and can actually help you rather than just opening a ticket and sympathizing that nothing has been done about it."

(Hat tip to Jason Cohen for this line of argument.)

[blizkreeg]

This is a fantastic way to respond to it. But I do fear if it's a slightly emotional response and not a more assuring one. It's probably the best way to address the elephant in the room though, aside from having a kick-ass product that addresses their pain points.

[x0x0]

In my limited experience selling things, sales are all about emotion. Yes, there are a few actual deal-breakers, but things like a willingness to learn new things or adjust their workflow or deal with a mildly suboptimal workaround depend entirely on emotion. And the same suboptimality or problem in the hands of a person who wants a deal to work vs someone who doesn't swings in two different directions entirely based on the potential customer's emotions.