It’s About Them! The Bottom Line on Raising Capital

Article by:

Richard Russakoff

EO Global

The funders we have interviewed during our research at Bottom Line Consultants consistently identified one principle that may be the most overlooked and underappreciated by businesses, individuals, orga­nizations and corporations seeking funding: It’s not about you; it’s about them.

Never underestimate the psychological reasons behind why people give. All funders have compelling personal needs they are trying to fulfill or they would not make a monetary commitment. Your challenge as someone seeking funding of any type is to identify their compelling needs. The better you understand these needs, the more likely you are to connect on a level by which they will actually seek you out. An old sales principle is as applicable in raising capital as it is in selling products like cars, computers and cosmetics. People or institutions give for two primary reasons: 1) It solves a problem or need for them and 2) It makes them feel good.

The host of specific, personalized motives and ratio­nales are as varied as the number of funders and the types of funding. Thirteen examples of compelling needs that motivate funders are:

• Institution/business profit motives
• Feeling good about oneself
• Giving back to the community
• Spiritual or faith-related needs
• Ego and/or being admired
• Pure altruism
• Wanting to be part of something
• Building individual wealth
• Tax-deductibility
• Guilt
• Intimidation
• Fifteen minutes of fame
• Tangible benefits

You can approach anyone for capital — be it a banker, an angel, a political donor, investment banker, private foundation or Warren Buffet himself — as long as you understand the funder’s compelling need and connect emotionally, mentally or physically. If you do it right, you will find a world of people waiting in line to give or lend you money or invest in your business. Why? Because it’s about THEM!

The Language of Funding
To connect with funders, you must learn to speak their language. The book “The Zen of Proposal Writing” by Kitta Reeds offers some insightful tips on turning questions you ask yourself into constructive questions that get to the heart of the matter:

• What do I want to say?
• What does the buyer/funder want to hear?
• What’s the best way to say it?
• How will the buyer/funder understand it best?
• How can I convince anyone to buy this idea?
• What logic, persuasion or entertainment will attract that buyer/funder?
• What do I want to say first?
• What will this buyer/funder want to know first?
• How do I want to organize this proposal?
• What will the buyer/funder want to know next?
• What do mean to say here?
• What does this buyer/funder need to hear at this point to be convinced?