Should I reconnect with VCs that passed on our business model prior to a successful pivot?

It is always a good idea to keep in touch with potential investors, if your core business idea/technology is a good fit for their fund's criteria. The best strategy is to make contact with potential investors before you need their money and keep them engaged / updated as you progress - give them regular updates and be willing to share the good, the bad and the ugly. If they are interested enough to remain engaged through this process, if you do make a successful pivot, it becomes must easier to re-engage them in the investing discussions.

I would suggest you try. Its easier to contact someone you know than someone you dont. They can only say no a second time!

First, I agree with Kent and Simon. Second, pivot or not, keep in mind there are what I call a hard pass and a soft pass. A hard pass would be, we will not invest in this type of solution, market, etc. A soft pass can be "come back when you have more traction", "we've had a bad experience with a similar company", "a Partner or two didn't buy in", etc. With soft passes 1) keep sending brief frequent updates and 2) if you qualify that it is worth your time and effort, ask for an immediate rerun and see if you can turn them around. Pass doesn't always mean pass. Working with one of my companies after a pass from a billion dollar plus fund, we got a rerun with that VC and less than a month after the pass we had a good term sheet that we accepted for $6M+ on a $7M+ round.

I think Michael's point is valid. You have nothing to gain by going back to a VC that does not participate in your market or who rejected your technology solution. You also must consider if the investor did not believe in the management team - and you may not know the answer to that one. Still, if you are sure you were not rejected for either reason and if you made a sea change, make contact with someone you know at the firm and tell them what is different. I would push for a meeting with that person alone first so you can impress him or her with your dedication to the new direction. If he or she likes what you have to say, that person can do the heavy lifting in getting you another hearing.

I suggest asking yourself precisely what elements of your business model you pivoted on and what evidence you've gained that your business model now works and is scalable. Startups often seek funding for what is no more than a solution without context of the customer pain it solves or a repeatable sales process for reaching target customers. If you have a meaningful sample size of customers and more than 40% are telling you the solution is a must-have, you may well have something VCs will consider worth a second look. Michael's point is critical also; be sure you are in their space. Some renewed research to understand investment strategy and the types of companies each invests in will go a long ways.

Good luck!

To carry on the thread from Michael and Peter, it will help make your case if you present data showing your customer interviews and how their feedback helped you make the pivot. Customer discovery interviews demonstrate a true market need. If you can then present data on how customers reacted to your post-pivot solution, that builds the basis by which you can argue that the VC should reconsider your firm. Better if you can document some preliminary customer orders for your solution. Best if you can get some initial deposits for the orders.

Raising money and developing relationships with VCs is part of an ongoing learning and maturation process. Given that opening sentence, I would strongly suggest you reconnect with a VC firm that previously passed on the opportunity only if you successfully remediated the specific issues that were raised as reasons why the VC firm previously did not invest and have now demonstrated success based upon that pivot. I'd make sure that the pivot and underlying successes have been consistent for 3-4 consecutive quarters rather than 1 or 2 to demonstrate repeated success.

Unless you've met this criteria, I wouldn't waste the VC firm's time and most importantly your time. Move on, as your recent successes based upon the successful pivot may be worth more to a new VC firm. Good luck!