After stumbling upon this article I quickly realized how fundraising for a start-up and non-profit are extremely similar. The guidelines that YCombinator Co-Founder Paul Graham states in his article are pretty much applicable for both groups. While there are a few suggestions that may not work for the non-profit side many important lessons can still be learned.
Here are some of the suggestions I like the most:
“Don’t raise money unless you want it and it wants you.”
If you don’t know what to do with the money then don’t waste the energy chasing it. For both groups this is vital, because you and your team’s energy is invaluable and not infinite.
“Be in fundraising mode or not.”
Again fundraising is quite time-consuming whether you’re trying to build a tech company or raise funds to further your non-profit’s cause. It is important to be committed to either making money to progress your company or using your energy to build up some other vital portion of the organization.
“Get introductions to investors.”
Like the image above we all wish that money grew on trees, but unfortunately it doesn’t. Due to my exposure in both fields I would say that I think it’s harder to get money and introductions when you’re a non-profit since it says it right there in your title…not for profit. For non-profits the rewards may not be as easy to gauge with metrics at first, but that just means that you have to dig a little deeper to get to the right people who want to help further your cause. This is why networking as much as you can will come in handy for both groups.
“Know where you stand.”
Giving up your values for money is never okay for either groups. While you should welcome different insights and ideas make sure your companies mission doesn’t suffer to get a dollar.
“Get the first commitment.”
Just like high school days peer pressure still reigns strong, especially when it comes to raising money. Everyone wants a piece of something that is going to be big or something that others are going after. That’s why it’s easier to get money once people see that others are committed and in. Spend time closing that first investor/sponsor and then you can show that others support your idea/cause and let them know why they should invest too.
“Close committed money.”
Money is useless to you and your goal/cause unless you actually have it to spend, so while promises are great if you don’t have anything in the bank then it makes no difference if they like you or not.
“Have multiple plans.”
Non-profits like startups shouldn’t rely on one plan. No one should actually. Being flexible and having different roads to get to your goal is essential for both types of organizations and for your success.
“Have one person handle fundraising.”
Others can help generate leads, but that doesn’t mean everyone should be closing the deals. For startups and small non-profits having one person to point all the money to makes it more streamlined and organized to see what you actually have closed and what still needs to come in.
Who wants to give their money to jerk. This is a pretty simple idea, but you’d be amazed how many people forget about this.
“The bar will be higher next time.”
You’re setting yourself up for how you’ll go at fundraising for the next round, so while it may be hard now you’ll need to prove yourself even more the next time you ask for money. Make sure that both your startup or your non-profit can show how the money was spent, why it mattered, and how it affects the investors/sponsors.
For Paul’s complete article find it here. Have anything to add or that you disagree with?