Are you struggling with fundraising projects?
From starting a business to supporting a cause, we raise money for different reasons. Raising funds for a great idea/cause is an exciting idea but a tough task to actually pull off. Sure there are many success stories, the most recent ones being the ALS Ice Bucket Challenge and the No-Shave November. But not all fundraising projects have the potential to be such runaway successes on the Web.
The question then is: What makes a fundraising event successful?
There are some golden rules when it comes to raising money online for projects, but what makes a project successful is the dedication of the team members and their personal motivation. Of course, the mission statement and goals of the project play a significant role, reflecting the ideals of the group as a whole. But personal motivation plays an even greater role as this sense of belief is incredibly inspiring, helping you to encourage others to feel the same passion.
It is also important to define the reason behind funding projects clearly and explain where the proceeds of the event will go. This is where you need to address the concerns of your potential supporters and one of the prime concerns of the funders/donors is “where does the money go?”
Remember that there are several other ideas/causes pleading for support and people contribute only when the idea or cause matches their own priorities. Therefore it is important to reassure the patrons of your fundraising projects that the money will go to good use, and stating the mission and purpose of your funding event is the first step to creating a trust.
Things to Do to Launch Your Fundraising Project
• Define the mission and purpose of the fundraiser you’re planning
• Explain how the proceeds of the fundraising event will benefit the idea/cause
• Plan how can you tap into the motivation of the team members and potential donors
• Decide on the right type of fundraiser (i.e. sales, events or direct solicitation) for your project
• Describe the important aspects of the fundraiser (the goal, the budget, the timeline, and the proper cost-to-profit ratio, etc.)
As mentioned, there are some golden rules to follow to raise money online for projects. Here are some of them to take the guesswork out of fundraising as well as to speed up your initiative.
First things first — if you can’t commit 100 percent to your fundraising projects there is no point reading further. You are not here to test the waters. If you want to speed up the process, you need to build competition within your round and for that, it is important to create as many conversations as possible.
This takes both time and effort at least for a few weeks or months. Remember that investors/donors try to retain optionality for as long as they can; without conversations and competition there is hardly any reason for them to answer your pledge with any urgency.
Practice Makes It Perfect
All your preparations, the write-ups and the goal setting are important, but it is equally crucial to deliver the same pitch to your target audience again and again. A better approach is to get feedback from your team members and friends even before you list the project on a crowdfunding or online fundraising site.
Based on the feedback you can even create a list of expected objections and obstacles and plan how to respond to each of them. The trick is to fine-tune your fundraising message as much as possible.
There are several crowdfunding and online fundraising sites to help you raise money online for projects. Based on the type of your projects you need to choose a highly efficient platform to build and leverage momentum. For example, if you have a great business idea, opt for an online fundraising site that introduces early-stage start-ups to angel investors, venture capitalists and potential team members.
Add recent investors, promote your project to their followers and get featured if possible. Leverage the power of social media and create momentum around your projects on social platforms.
Find a Lead
This will take your funding project a long way. With a lead investor ready to fund a large portion of the project, you can rapidly close the remaining funds. This will be assuring to other investors, encouraging them to come onboard. This is not saying that you cannot close a round without a lead, but having one will definitely speed up the process.
Ask for References
Once you have a few investors/donors for your project, ask them for referrals. This is a very good source for high-quality new leads as the referring investors provide a stamp of approval for your idea or cause through their capital, significantly increasing the odds of getting new funders in your favor.
Prepare Your Due Diligence Documents
You need to prepare all your due diligence documents before listing the funding project on a crowdfunding site. If it is for a non-profit organization, you need to define your cause along with the organization’s mission.
In other words, you need to explain what problems you are trying to resolve or alleviate. Also state the anticipated outcomes, which should be publicly observable and measurable. Be as specific as possible and also mention your major accomplishments over the years.
For start-ups and entrepreneurial projects, include your company financials and projections along with the pitch deck. How is your business idea/company different from others? What are your plans to achieve your goals? Here again, focusing on details is important. Give supporting data and figures to provide better insight to investors.
That said you need to be very cautious when sending due diligence items. It is recommended to only send files specified by investor(s) as every such item can raise more questions and thus derail/delay the process.
The Final Word
People in general tend to relax after obtaining verbal affirmation from an investor, which is not a smart thing to do. The investor may well change his or her mind, or the funding may not go through for a number of reasons. To avoid this, push for closing the deal at the earliest.
Another thing to consider is the importance of setting goals. Set daily, weekly, and monthly goals for your funding project. Make the goals public, using your inner circle and social networks.
Finally, don’t forget the ‘thank you’ notes. Creative ways of giving recognition can take you a long way with the advocates of your cause.
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