The one thing you need to know when raising funds that nobody tells you is that:
Funding is not a mechanical process, it is a human process:
Funding decisions are as emotional as they are rational.
This fact has two major implications, one for you, the individual requesting funding and one implication for the individual providing funding. It is easier to raise funds if you are passionate about what you are doing, and it is also easier to raise funds when the individual making the decision to provide funds likes you as a person, and believes in your cause.
You are more likely to raise funds if you leverage on your passion and off your skills. By leveraging on your passion you are more inspiring and resilient.
You are also more likely to raise funds if you are creating wealth, instead of making money. The subtle difference in intention between creating wealth and making money creates a huge difference in the outcome of your actions. If you are working to create wealth you grow the economy, and you take some of the wealth you are creating for yourself. It is then more likely that others buy-into, follow your vision and collaborate with you, as they can also share your big picture. If you are looking to make money, chances are that your efforts are for your own benefit and it might be more difficult to gain the support of others. Creating wealth is a much more powerful proposition than making money. You can’t create wealth unless you are passionate about what you are doing.
In the case of those providing funding, a return on investment is an important consideration but not the only one. The individual making the decision to provide funds or resources also considers how likely you are to accomplish what you promise, how you both relate to each other, and, in many cases, how comfortable he or she is with your project. What you promise to accomplish must be meaningful to the individual making the decision to provide that cash or resource in whichever role he or she is playing. The connection of the individual to you and your project plays an important role. For example, the same individual can be a family investor, a venture capitalist, a lender, or a collaborator for different projects. Different funding mechanisms and sources of funds have different needs for the investor.
A good deal turns into an irresistible proposition when the goals and needs of the supply and demand of capital are well aligned. Businesses don’t make decisions, people do, and we can’t discard the human nature of the fund raising process.
There is a systematic approach to fundraising that involves a 10 step process. Following these steps will greatly increase your chances of receiving the much-needed resources so you can fund a high impact idea. The reason I do this is so that people are better prepared for investors. We live in a great period for fund raising. Follow these steps to access funds and make your dreams come true.
- Define your passion based vision,
- Outline how you will measure success,
- Identify the A team,
- Define the needs for funding resources,
- Clearly define the current state of your organisation,
- Select the ideal source of funding,
- Prepare a funding proposal,
- Customise the message,
- Start, test, improve, grow your list of potential funders,
- Due diligence, closing the deal and opening the door.