Once you’ve determined the type of funder that is a best fit, you need to explore the major FLAWS and how to prevent, manage or even avoid them.We’re down to brass tacks in the funding process. Ready?
There is ONE key issue with funding great ideas that we need to address. Generally speaking these ideas are great because they are innovative and creative, not because they have been tested!
What does it mean? It means that it is very likely you will have to make changes as you go along implementing your idea. This, in turn, makes it inefficient, and UNPREDICTABLE. Not good news for someone that has believed in your idea!
How do you turn what could become a vicious circle into a virtuous circle? Provide timely information, manage expectations, and sometimes involve the funding source in your decision making process.
Here are 5 tips to help you navigate possible funding flaws with your different funding sources:
1. Founders, friends and family members are probably the most versatile of all funders, but not necessarily the ones that have the experience necessary to guide change. Friends and family usually do not want to be recognized as backers, except if you use crowdfunding.
2. Angel investors, equity partners and venture capitalists will have a different degree of involvement, from mentoring to being on a formal board. The same holds true with major sponsors for large non-profits or causes. Make sure you provide accurate reports AND refer to the original plan to make the differences clear.
3. Lenders are unlikely to take major shifts easily. Make sure you keep that portion of funding well adjusted and are able to fulfill your payments.
4. Sponsors, like crowd funding backers and partners, traditionally expect recognition. So make sure you can express your gratitude to these backers out loud.
5. With other collaborators make sure their needs are recognized. They could challenge your assumptions. They usually have a ton of ideas from their model – use them wisely, and shift from defending your ideas to learning from them.
Want a guide to help you avoid possible funding flaws? www.womengetfunded.com