Speaking of numbers, how are you building a broad base of community support for the people you serve? Do you carry their stories with you when approaching new partners? Let's get healthy excitement built around the change making work that you are doing for your community! DM to start the conversation.
#EMBA Lesson 6 When approaching wealthy investors ask for what you need up front. Money conversations are easier with the numbers out of the way. Let’s talk about it. We JUST finished our pretend pitch competition in my Rockhurst University Executive MBA class. My group raised 2.5 million (I wish they were real) dollars from 2 venture capitalists. To do it, we had to create a presentation where we gave an overview of our product, shared our numbers and asked for the amount of investment we needed to keep growing. When it was finished, we had our potential funders give us feedback. Every one of them said that we should have asked for the money first which is totally opposite of my every day experience. Listen Friends, I am from the Midwest. I was taught to spend time sitting with someone, getting to know them, showing them I'm not a money grabbing jerk BEFORE asking for anything. In my world, asking was impolite without relationship. With that kind of background, talking about money up front literally never crossed my mind. It felt offensive, but based on the person you are talking to, research supports it. Here is why: 1. Venture Capitalists (think the Sharks on Shark Tank) know within 3-10 minutes if they are going to invest in a company. Our pitch took 20, which means in real life, we would have lost our window of opportunity. 2. A novel idea or approach matters more than the numbers at first. People who are seasoned investors can recognize just by listening if you have a money making opportunity for them. 3. Your asking for money up front allows them to have context for everything else you are sharing. If they know what your number is, they can listen to you and determine if what you are saying is worth what you are asking I have to say here however, NONE of this applies when you are asking for money from nonprofit foundations. Nonprofit foundations it turns out are Southern in their approach as well. They want to get to know the organizations that they fund. Some of them only fund by invitation. I think that with the advent of trust based philanthropy, foundations want to be sure that they are supporting organizations that are actually doing good. The contrast between the two funding approaches is why it is VITAL that nonprofits diversify funding streams. Of course we want to build relationships, show our impact and keep funders coming back. On the other hand, some days we just need a cash infusion so that we can keep building. That may mean approaching a venture capitalist with some aspect of your work that can make money for them while you are out doing all of the good you can. Friend, I don't have all of the answers. I like the fact that this business program meets in person at Rockhurst University because it means that I get to brainstorm with others in person on a regular basis. I need that kind of think tank. Here's to increasing revenue and diversifying funders. I wish you well this week! #MBA #Executive #Leadership