Are you making these mistakes while raising funds?

Mistakes while raising funds

Many founders find it difficult to garner sufficient and continuous funding for their venture. Gaining access to appropriate donors is a major component of this challenge. Founders usually lack resource mobilizing skills. Fundraising is an involved process. At any step of the way, the system may falter and lead to the founders missing out on significant funding. It’s important that founders make use of every opportunity that comes their way. There’s no step-by-step methodology for developing a fundraising plan or strategy. Every founder is unique and so is the organization or their product, both in the ideas they present and in the promises that they make to the markets.

However, in fundraising, it’s not the customer’s or beneficiaries’ input that matters most. What’s vital is what the potential funder thinks of the founder and organization. Founder’s fundraising efforts hinge on its ability to make itself and its organizations look attractive. Below are some of the big mistakes that they make while fundraising. You must avoid them.

Mistakes while raising funds
Set a goal!

1) No Goal: Not having a set goal always leads you nowhere. During a meeting with the funder, it gives them a bad impression and they find it a complete waste of time having met with you. Probably would never want to meet with you again. Setting a goal is not that complicated. It takes a little time though. However, it is always worth spending time defining a goal. Even if you don’t get funded, you at least know where you are headed. You just have to know where do you want to go in the next 5 years and plan it backward. Having a goal is the most important element of successful fundraising. Many founders do not have a clear picture of why they want to raise funds.

not having clear ask-FundCorps

2) Not having a clear ask: Not having a clear goal will eventually lead you to not knowing what you are asking for from the funder. Not being specific also reflects on your confidence during the meeting and leads to a bad impression. Being specific also allows you to choose with which funder you want to meet. Without knowing what specifically to ask for, you probably end up meeting too many people who may have relevance to what you need or may not. Non-relevant meetings that lead to rejections have to lead many to give up on their passion. Being demoralized, unwanted suggestions, unwanted engagements will kill you.

Define a time line

3) No timelines: Keeping a track of time is extremely important. Not just in terms of meeting with the person on time but also ensuring timely delivery of the deliverables. If you don’t move fast enough, you risk losing momentum as well as committed funders. Worse yet, the longer you let your funders wait, the more you inject unwanted complexity into the process. If you want a smooth, relatively painless fundraiser, be sure to move quickly and steadily.

Learn about potential funder before the meeting

4) Identifying and understanding funders: Funders are also human beings and they are not always rational. The only difference between funders and you is that they add value to your venture not just financially but also in many other ways but mostly you are looking at them from a financial value add point of view. Hence understanding them is very important. Many times entrepreneurs are only asking for funds without having any background check about them. Maybe your meeting with the funder is destined for something much bigger than the money they bring to the table. Their network, their experience, their ideas, their suggestions, and more.

Learn to deal with rejections

5) Rejection: Rejections are not just a failure but an opportunity to learn and move to the next steps. We have obviously heard this many times from so many motivational speakers, our friends, relatives, etc. But it’s actually true. Entrepreneurs after getting rejected from a funder, tend to get demotivated, lose the appetite to keep going, feel like their efforts have gone to waste and feel like giving up. Rejections are never an unfortunate part of your journey. If you have not been rejected, it means you really have to do something that you have never done. Remember, we are human beings and you are the star of your journey. You better let no one tell you you can’t do. How many funders do we probably have in the world? Probably millions! Why not take learning from the rejection and move to the next one. Maybe looking at your strong attitude, the funder who rejected you comes back to you. If you don’t get rejected, you will never explore or experience the worse and you are then not prepared well in life.

Are you looking at raising funds?