200 Rejections to a Billion-Dollar Exit: Larry Cheng on Resilience and Growth
What happens when you get told "no" 200 times in a row? Most people quit. Larry Cheng raised a fund.
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200 Rejections to a Billion-Dollar Exit
Larry Cheng doesn’t look like someone who’s been rejected 200 times.
The Founder and Managing Partner of Volition Capital sits across from me with the quiet confidence of someone who’s seen the other side of the grind.
His firm backed Chewy before it became a $3.35 billion exit.
But before that win, before the portfolio of successful companies, before the reputation as one of the sharpest minds in growth equity, there were 200 conversations that went nowhere.
Two hundred investors who said no. Or worse, ghosted him entirely.
This is the story most people don’t tell. The one that happens before the victory lap. The one that separates the people who make it from the people who don’t.
Connect with Larry Cheng
Volition Capital: https://www.volitioncapital.com
Larry Cheng on X: https://twitter.com/larryvc
Larry Cheng on LinkedIn: https://www.linkedin.com/in/larrycheng/
The Philosophy That Built a Firm
Larry’s approach to rejection isn’t just motivational poster material. It’s a tactical framework that applies to every part of business and life.
He calls it simple: “Don’t take no’s personally. Don’t take yeses for granted.”
When Volition Capital was just an idea in 2010, two years post-financial crisis, institutional investors weren’t interested in new firms.
They were cutting allocations, sticking with what they knew. Larry understood this. He didn’t take it personally because there were valid reasons to say no. New firm. Unproven track record.
Long-term commitment in uncertain times.
But he also didn’t stop. He set a target and worked toward it methodically. Somewhere between investor 200 and 210, someone committed.
That first yes started the ball rolling. A few more came in. The fund closed. And their first investment was Chewy.
Fifteen years later, Larry still operates with the same philosophy. He doesn’t take turndowns personally because he knows not every fit is right.
…and he doesn’t take yeses for granted because he remembers how hard that first one was to get.
This isn’t just about fundraising. It’s about sales. It’s about partnerships. It’s about life. Detachment from outcome doesn’t mean you don’t care. It means you don’t let the outcome define you.
The Game You’re Actually Playing
Most founders don’t understand the game they’re playing when they raise capital. They hear “venture capital” and think it’s all the same. It’s not.
Larry breaks it down in the clearest terms I’ve heard. Venture capital is a high-loss-rate asset class.
They lose money about 70% of the time and make it up on the one massive winner. Growth equity, where Volition operates, invests in companies with revenue and traction.
They lose money maybe 20% of the time. The upside might be smaller, but the philosophy is fundamentally different.
If you take venture capital, you need to understand that your investor is playing a different game than you are.
They’re building a portfolio where most companies fail. That’s not a bug. It’s the model. If they’re good at their job, they’ll lose money on most of their bets. That creates a misalignment of incentives that can kill your business if you’re not careful.
Growth equity firms like Volition don’t want to lose money. They’re looking for companies that can grow into something substantial without swinging for the fences on every decision. Understanding this distinction isn’t academic. It’s survival.
Larry’s advice to founders: know what game you’re playing. Know what game your investor is playing. Make sure those games align.
The Chewy Story You Haven’t Heard
Everyone knows Chewy as a massive exit. What they don’t know is why it worked.
Larry’s take: brand and community. In a world where products can be replicated overnight, your brand is your moat.
Chewy wasn’t just selling pet food. They were building a relationship with pet owners. They created a community that felt something when they interacted with the brand.
This isn’t unique to Chewy. Larry points to examples across industries. Black Rifle Coffee. Liquid Death.
These brands aren’t winning on product differentiation. You can’t really taste the difference between most premium coffees or canned waters. They’re winning because they’ve built a community around a set of values and a story that resonates.
In the age of AI, where anyone can spin up a product or service in days, your brand and the community you build around it are the only things that can’t be easily copied.
This is more true today than it’s ever been.
Your Brand Is No Longer Optional
Larry is adamant about this: founders and CEOs can’t hide anymore. The days of letting your product speak for itself are over.
You need to be external. You need to be authentic. You need to engage where your community is.
He points to Khadak, the founder and CEO of US Mobile in his portfolio. Khadak dominates Reddit. All product development ideas go on Reddit. All announcements. Customer service. Everything.
US Mobile has the largest corporate subreddit on the platform. It’s not a marketing tactic. It’s a genuine community where Khadak takes the hate, the love, and everything in between.
This is the new standard. If you have two identical AI companies, but one founder has built a community and the other is just coding in the back, you have two completely different companies.
The one with the community wins.
Larry’s advice for introverted founders who don’t want to be the face of their company: you don’t have to be Jensen Huang giving TED Talks. Just turn on the camera a little bit. Share your day. Be who you are.
People want to see the real thing. Even a little bit every day says something to your customers, your shareholders, your team.
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Turn Long Maybes Into Quick No’s
One of the most actionable frameworks from our conversation is this: turn long maybes into quick no’s.
In fundraising, in sales, in partnerships, people will string you along. They’ll say “maybe” and keep you on the hook while they wait to see if you gain traction.
Larry’s approach is to force the issue. Get to a decision. If it’s a no, that’s fine. Move on. Don’t waste time on people who aren’t serious.
This applies to everything. We don’t want to waste time on people who aren’t committed to us.
There are eight billion people in the world. If you have something of even the smallest amount of value, you will eventually run into someone who believes what you believe and wants to be part of it.
The key is not getting stuck in the maybe. Get to the no. Move on. Find your yes.
The Unsexy Truth About Success
Larry’s story isn’t sexy. It’s not a hack. It’s not a shortcut. It’s 200 rejections, a clear strategy, and the discipline to keep going when most people would have quit.
Resilience is a superpower. In a world obsessed with overnight success, the ability to withstand rejection and stay focused on the long-term vision is what separates the winners from everyone else.
Larry didn’t question his strategy after 100 rejections. He didn’t pivot after 150. He kept going because he believed in what he was building.
The strategy he was talking about in 2010 is the same strategy Volition executes today.
That’s the lesson. Not that rejection doesn’t hurt. Not that it’s easy. But that it’s part of the process. And if you can detach from the outcome, treat every no as a data point instead of a judgment, and keep moving forward, you’ll eventually find your yes.
And sometimes, that yes leads to Chewy.
This is the way.
Hanley
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