4 Common Fundraising Mistakes You Should Avoid Making

Trying to gather funds for your business? Funds are the backbone of every organization. The more you have, the more resources you will gain while operating the business. To be more precise, fundraising is a kind of collaboration between art and science. So, in order to get the proper mixture of these skills, you need to have patience, time, and lots of hard work. Right this time, you may be planning to “ask” someone for the funds, without any prior preparation. But this is not the right way.

Romantic relationships always need an effort to be made on everyone’s part to get success. It does not matter how comfortable you both are with each other. The same is the case with the fundraiser and investor. If both will not make an effort to establish a relationship with others, then nothing can be done to scale up your business.

In that case, relationships deteriorate, and in the end, neither of you will grow as a couple. A relationship between the organization and the investors is based on trust and hard work. Without these skills, no one is going to invest their hard-earned money in your business.

There is no denying the fact that in a new relationship, mistakes are quite common and normal. However, certain ways can be done to avoid these mistakes, such as lying or infidelity. Whenever you ask any investor, there are maximum chances that he will say, “NO” to your business. So, on average, it will be 7 out of 10- ‘NO.’ In order to curb this situation and avoid the maximum mistakes to attract fundraiser, let me give you the best tips-

Harmful Fundraising Mistakes

Fundraising is the one aspect that every business owner wants to do as perfect as they can. After all, money is the life’s blood of your organization, and if the benefactors up and leave, it is hard to pick up the pieces. To prevent all the committed mistakes to seek funds for your business, below are the four harmful fundraising mistakes that you need to avoid if you hope to be successful.

Make a command to invest the money

The next mistake that generally every entrepreneur does while raising for their funds is uttering, ‘’should’’ word aloud in front of everyone. Trust me; this shows your arrogance or attitude towards them. Instead, talk to them with a kind heart, convince them to invest in your business. Because you want help for your business from them, so you can’t just give the command.

Listen to their interests, try to contact them, and then politely ask them if and ‘ONLY IF,’ there appears to be a good fit. Sometimes, an investor shows a lot of capacity and personal reasons to love your work and mission. Rather than giving them orders, kindly ask them whether they are ready to join your company or not.

Let us give you one real-life example-

One of my friends was looking for investors for a long time. Last month ago, he finally found it. But he made one single mistake, and then came to the same point where he had started to operate his business. While having a word with that investor, his pitch included words like, “You should make a significant contribution.” Before this line, he was a natural fit for the organization, but he didn’t invest in it. Moreover, he further went down and made a very stupid and ill-conceived argument that he was conspicuously absent from his major investors list. That’s why, I am saying, never ever include, ‘should’ word in your pitch while looking for the fundraisers.

Always try to make your business idea as strong as much as you can. After all, you are convincing someone to invest in your idea. But always remember that investors aren’t just ATM machines — they’re also a part of your company. They are your business partner; so you can’t command them. You should pick someone you get along with, value, and respect.

Missing the art of attracting investors towards the business

The first and foremost mistake that most entrepreneurs make while raising funds for their business is lacking the art of convincing investors. To attract new investors towards the business, you need to first have a good relationship with them.

Developing a strong relationship with the investors is a lot more like dating.

For example- You have asked someone out for a date, and then you refused to show yourself during that date and time. What do you think, ‘will your relationship last longer?’ Of course not! The same is with the case of attracting fundraisers to invest in your business so that you can operate your business effectively.

Investors will not just come to your place to ask whether you need funds for your business or not. Usually, you exist like dates that won’t line up in front of your doorstep because you are available. You have to come out of your comfort zone and then try to find out the ways to attract them with presentations, networking events, and marketing campaigns.

More importantly, always make sure that someone agrees to give the money to your business, you must continue your relationship with them besides asking for money every month.

Tricks to attract new investors

Here are some tips to make the most of the investors convince for giving funds in your business-

Emotional Appeal

The first tip that you can use to attract the investors towards your business is by showing them the emotional appeals to win them over. While facts and figures are the essential tools to a concept, emotions are actually what can truly rope in the interest of a person’s life. For instance,- The Theory of Everything shows the emotional aspects of Stephen Hawking’s condition and how he attained success in the face of adversity. The more emotionally, you will let the investors know about your business objectives, the more they will get convinced to invest in your premises.

Incorporate new methods to attract

The second tip that you can use to attract investors towards your business is by sending them more email requests. What’s more, you can also schedule phone calls, meetings, and more personal methods to entice and call upon the help of prospective investors. You can also seek them through various social media platforms. Nowadays, everyone is suffering on the internet. So, you can get the way to attract investors.

Make use of your established relationships

And the next tip that you can use to get the funds for your organization is by contacting your current investors with established relationships to figure out new prospects. If one of your current investors promotes your business in front of their colleagues, this goes a long way in building a new relationship.

Asking the same fundraiser again and again

Whenever a fundraising technique works, organizations start using that technique over and over again. However, over time, supporters need new ways to approach them or even new ideas in which they can even think about investing. When the same event happened in a repeated chain, the business owners could see their investing decrease as the same events are repeated time and again.

That’s why, it is said that business owners should try to apply new ideas so that things won’t grow stale, and new opportunities will start growing. An apprehension to transform, a lack of knowledge, or even fear of upsetting the status quo all could become the hurdle for your business to seize the opportunities.

The ultimate goal of every business owner is to increase the flow of the amount of money donated every year. Since the inflation rates are causing the items and the services purchased with gifted revenues, it has become the prime objective of the business to raise their funds in order to operate the business successfully. It is most important that the amount of aid received should match the costs of the station’s benefaction.

What investors typically want to see is the real customers that work on new ideas and objectives.

Raising Too Much Money

And last but not least, the mistake several entrepreneurs make while looking for the investors is raising too much money. Business owners think that they should have a good amount of money in their business bank, but they forget that this increases the amount of scrutiny and reporting that they need to pay. Sometimes, investors do ask for the equity while investing in the company. What do you think, ‘is it a good idea for your business- giving up the equity?’ Well, it all depends how much equity you are giving up on your business.

There is no denying the fact that a nice cushion of startup capital can do wonders for your business, but too much money in the system can lead to disaster. And that expense your business won’t be able to cope with. There might be the chances that you will be forced through firing rounds, cutting the budgets or even closing the office spaces.

Avoid these problems entirely by being down to earth and reasonable with the amount of capital you need and aiming for just above that number.

Conclusion

By now, you know what you should not do while seeking for the investors to raise the capital. Undoubtedly, fundraising is a mixture of art and science. It is more about building, cultivating and sustaining relationships for your business with the investors. It’s about mission-driven passion.

So, whenever you put ‘relationships’ and ‘passion’ into one frame, there is ample opportunity to screw up. Don’t be in a rush, just be earnest, and apologetic if you need to be, and wear your heart (and your mission) on your sleeve. The more you stay connected with the investors, and your business objectives, the more ways you can achieve to get your business off-the ground. Good Luck!

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