I recently had the chance to speak at a Stanford Graduate School of Business Boot Camp to more than 75 graduate students looking to start social good organizations. The students hailed from all corners of the university – business, design, engineering, health – and were planning on starting businesses with all sorts of legal structures and models. What a terrific trend to see in action.
My topic of focus for the Boot Camp was raising financial resources. I should start by saying that I think there is no higher calling than raising money for social change work. Allowing others to give money to worthy efforts that change lives and communities is a gift to the investors. Volunteers are awesome and pro bono support is great, but cash is fungible and necessary for organizations doing good work to grow and become sustainable. Complaining about fund raising is not trendy or funny, it shows lack of leadership – since often only you can bring to bear the resources that your organization needs. So, hit the street with optimism in your heart, a story on your lips and some good data that people can get excited about!
How much money should I raise? As little as possible, but not so little that you skimp. For example, I far prefer to see a team of full-time, high-caliber people building out a model, versus an army of unpaid volunteers working on an idea “when they can fit it in.” Raising more money than you need can make you sloppy and also dilute your valuation. Bigger fundraises usually require more intense and time-consuming diligence cycles and also might mean that you are taking on increasingly larger numbers of donors; both of these efforts can be time consuming and defocus your execution.
How important is it “who” my funders are? Very. Money is not created equal. You want funders that complement you and complement your other funders. You also want funders who are smart and savvy, and appreciative of your time and leadership. Funders have expertise and brand and you want to assure that you are associated with the right ones for your industry and life stage, as well as funders that can provide you with networks and knowledge that benefit your work. You want some that will coach you and sit on your board and others that will give you room to maneuver and learn. Also, friends and family money matter. Financial contributions by friends and family signal how deeply committed you are to your work. When you dig into your contact list, it pushes your other investors to open up their contact lists, too, which will result in a high quality and faster-growing lists of investors and clients.
And while I think about it, name dropping, in general, matters and helps. Who are your board members? Your partners? The story of the social network of your work is all a part of your package. None of these details are at the expense of telling your operational story, or tightly managing the execution of your work, but understanding who else has brought themselves to your work is a very important part of your story.
How should I think about milestones? Milestones are a great tool for setting goals, signaling your willingness to sign up to targets and highlighting success. I prefer milestones that take into account operational goals as well as infrastructure goals, including adding board members or building out systems. Milestones should focus you toward building out your minimum viable product, hiring excellent staff, building long-term capacity and exploring the best ways to distribute your offering. Milestones should be gating items to additional fundraising asks, as well as internal targets to push your team and identify your strong leaders and managers.
What materials should I prepare? I encourage fundraisers to create and carry along a variety of materials, since different folks prefer different amounts and formats of information. I suggest having on hand a 2-3 pager, a pitch deck, and a realistic bottoms-up budget with a set of assumptions that help me to understand your operating model and org chart. I also like to see competitive landscapes that show me that you understand your market and your worthy opponents, which also means that you understand your unique place in your market. Also, there are listeners who are more struck by stories and others who are more captured by data – be sure to have a healthy and compelling amount of both mediums to assure that your audience gets interested and feels satisfied.
A great leader both inspires lift off and charts the course to the destination. When it comes to creating enterprises that are designed for social good, the stakes are high. Great ideas matter and great execution matters, too, but money starts and runs the engine of any strong organization. Leaders own the important work of bringing resources to the work of their team.
Get ready to tell your story and enjoy the ride!
– Anne Marie Burgoyne is a Managing Director at the Emerson Collective where she funds and supports non-profit and for-profit social entrepreneurs and innovators. Her work spans across domestic and international geographies with a focus on strong leaders and strong models that have the capacity to scale. Before joining EC, Anne Marie was the Managing Director of the Draper Richards Kaplan Foundation where she made early-stage grants to high-growth, high-impact non-profits including Education Superhighway, Grassroot Soccer, The Mission Continues, One Acre Fund, VisionSpring and Welcoming America.
–Read a profile about Anne Marie’s experience as a Farber Fellow here.