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Actually the way most VCs say no is either by not returning your phone calls, or by saying "looks interesting; let's keep in touch," while not actually giving you a termsheet.

Things change fast in the startup world, so VCs always want to leave the door open in case you suddenly take off. (Taking off can mean becoming popular with users, or just other VCs.) As a rule they reject you in ways that can be claimed later not to be a rejection.

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Right, not only to keep alive the possibility of getting in on it later, but also to avoid the embarrassment of having rejected the next big thing.

Business and VC funding are not American Idol. There's almost always a chance to keep a door open to future prospects, upon failure, thus gaining an ever growing list of contacts and resources. This is part of "follow up". Unless the entrepreneur is dead or in jail, the door can be open.

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