A Guide to Fund Raising
What is Fund Raising?
Fund raising is that part of your business plan, wherein you navigate through the process of generating fund for your venture or your dream project. It is a process of seeking and gathering financial contributions from individuals, businesses, charitable foundations, or governmental agencies and different fund houses.
The goal of fund raising is to secure the necessary funds to support the activities, programs, or projects of an organization. In addition to meeting investment needs in case of a business, it is commonly used by nonprofit organizations also for executing specific project, cultural event etc. However, in this blog, the focus will be on raising fund for your business.
In last few years, fund raising has become very popular, primarily due to the expanding start up ecosystem. The start-ups widely target fund raising, where they find out their potential investment partners.
Though, it is easier said than done, the general steps involved in fund raising is captured below.
Define Your Fund raising Goals
To start with, you must be clear on why you need the fund. I personally had a problem in one case, when the entrepreneur changed their fund-raising goal abruptly surprising all, particularly the investor.
You need to be clear on the purpose of raising the funds. Whether it is to meet your operational cost or increasing capacity or initiating a R & D project?
You should also have your calculations ready on the amount of money you need, the amount of return it will generate and the timeline
Identify the Likely Investor
Every investor will have their own preferred areas of investment. Some may be investing in technology products or service; some may be specialised in investing in only healthcare sector. There will be further gradation of the investors like, individuals, corporations, foundations, venture capitalists. There are some investors, who invest primarily in the starting stage (venture funds) & there are some other investors, who fund in the operation phase.
You need to identify a few potential investors, who may be willing to invest in your business.
Prepare a detailed business plan or project proposal
At this stage, your business plan should be ready capturing critical information about your plan. It should capture every possible aspect about your plan including, technology, sourcing of technology, cost, technology life cycle, your competitors, market prices, your implementation plan, operational plan, your human resource requirement, the problem your business will solve and how it will contribute to the society and environment.
Assemble a team with the skills necessary to execute your fundraising plan
Build up a team with specific roles & responsibilities to carry out individual roles. You may also need support from external fund-raising experts for guidance.
Approach your Investors
Initially you have identified likely investors. Now that you are ready, you may start approaching them with personalised emails, phone calls etc. A long duration of persuasion is important in most of the cases. You should adopt a highly professional approach throughout the process. The need to maintain professionalism does not end with raising the fund. It continues for the entire period the investor keeps invested and beyond.
Plan and organize events to raise funds and increase awareness
You may need to organise events for fund raising in certain cases. Such events may include, galas, auctions, charity runs, road shows and informational sessions. These are widely used in case of large investments and investments in non-profit requirements
Synopsis
Getting fund for your dream project is easier said than done. I have seen many instances, where the interest for raising fund ends in dream. It does not progress due to lack of knowledge and fear of rejection. It is true that any investor would look at you not only to assess your idea, but also to see your seriousness & dedication, your knowledge, your mindset. But one thing is clear & that is they are willing to invest in good business models. Hence, you have the opportunity.
If you have a dream project and need support in any stage, you may approach us. Please mail to yesmindz.consulting@gmail.com with details of your project and kind of support you need. In case we find it relevant, we will respond to you.