How to Ask Rich People for Money

How to Ask Rich People for Money.

Fundraising for charity is an important part of any nonprofit group's work. In the U.S. alone, donors gave almost $287 billion in 2011. Many people who work for nonprofits feel uncomfortable asking donors for money, but without their help most nonprofit groups would not be able to carry out their missions. Learning how to effectively and respectfully ask wealthy individuals for money can help you ensure your charity or favorite nonprofit, federally recognized as 501 (c) (3), group prospers and is able to help those in need.

Part 1 Planning Your Donation Request
1. Compile a list of donors. Before you begin asking for money, it's best to have an idea of who you're going to ask for donations. If you're going door-to-door, that may be as simple as deciding which neighborhood(s) to work in. If you're soliciting donations by phone or by mail, though, you'll need a list of prospective donors to contact.
If you can identify past donors on your list of people to call or write to, you may want to prioritize those individuals as "best bets" - these are people who, given their history of donating in the past, will most likely contribute again to your cause.
Try to identify which people on your list are the most financially stable. You can do this by interacting with the individual to get a sense of his or her finances, or if going door-to-door, look at the houses residents live in and the cars in their driveways. People with large, elaborate homes or flashy sports cars most likely have more disposable income. (Though of course this doesn't guarantee that they will give donations.)
You can also look for potential donors by their other areas of spending. For example, does the prospective donor attend fundraisers for other organizations or individuals? If so, that prospective donor probably has the means to donate to your organization, if properly persuaded.
Consider using analytical software and services, such as Donor Search, to identify which potential donors are more wealthy and more likely to donate.
Remember to think "ABC" when identifying donors: Able to make a gift, Belief (known or potential) in your cause, and Contact/Connection with your organization.
2. Get to know your donors. If your organization has dealt with donors in the past, you or a colleague will probably know what strategies work best in making your appeal. Some people want to know how the money from last year was spent, while others may simply want to know how much is needed. Certain donors may have fears or reservations about donating, and it's important to learn to recognize those fears/reservations so you can address them in advance.
Some donors may need to hear particular terms or phrases in order to be persuaded to donate. If you know this to be the case, make some indication of this on your list so that when you call or approach that person, you'll know what to say.
Any time a donor seems reluctant to give but gives anyway, make a note of that situation on your list or in that donor's file (if you have one). Listen to what the individual says when he or she is reluctant, and try to find ways to assuage those fears - not just for this year's fundraiser, but for future years as well.
Be aware that many well-known philanthropists hire other individuals to manage donations and contributions. Because of this, you may not get to speak to the actual donor himself/herself. However, the employees hired by a philanthropist probably have the same concerns that the philanthropist does, and you may have some luck appealing to the philanthropist's interests through his or her employees.
3. Find ways to present your organization. People who have donated to your organization will no doubt be familiar with who you are (as an organization) and what you do. But what about people who have never donated before? How will you describe what you do to an outsider? This is important, as it may determine whether the individual will listen to the rest of your pitch. If possible, try to compile some data on what your organization has done in the past, the problems you hope to address after this fundraising drive, and how that prospective donation would help your cause.
Try to present your organization in a way that both explains what you do while also highlighting the issue you seek to change. For example, you might say something like, "Did you know that [the issue your organization addresses] affects a significant portion of the city, and we are the only organization solely committed to addressing these issues in a comprehensive way?"
It's not a requirement to have data compiled, but for individuals who aren't familiar with your organization, it may be very helpful to know that information.
Consider printing out a brochure or having a reusable chart to illustrate both the improvements you've made and the improvements you hope to make.
Think about what you might say if someone doesn't understand your organization's goals, or what you might say if someone was dismissive of your organization. Try putting yourself in those shoes - imagining that you were someone who didn't want to help the organization - and what you might say to the organization. Then imagine how you might respond to hearing those words.
The better your donor base understands your organization - and the better you understand your donors - the more likely you'll be to build a long-term relationship with that donor.
4. Practice your appeal. One of the best things you can do to strengthen your appeal for donations is to practice what you're going to say. That doesn't just mean knowing how to actually ask for money, but also knowing how to initiate the conversation, practicing scenarios, anticipating potential responses, and knowing how to direct (or re-direct) the conversation.
Remember that the best appeal will educate the potential donor, rather than making a simple sales pitch.
Practice your appeal out loud. Get comfortable with the speech, and learn to adapt it to your own style of speaking. Make it your own speech, and try to make it feel comfortable and unrehearsed (even though this may take a lot of rehearsal).
Practice in front of a mirror if you will be interacting with donors face-to-face.
Try recording yourself, either with a tape recorder or on video, and study your mannerisms and your speech patterns. Does it sound honest? Do your vocal patterns and your physical mannerisms communicate the message of your organization, and the urgency of what you're trying to solve?

Part 2 Asking for Donations.
1. Start a conversation. Don't just call and start running in with your pitch. Work on creating a dialogue with the potential donor, which may mean making some polite small talk at the start. It can be as simple as asking the person how his or her day is going. Anything to start a conversation should help disarm the individual, and make the person realize that you're a caring and concerned member of the community.
If the prospective donor is a known philanthropist, he or she may prefer to have someone who heads the foundation ask for a donation. Statistically, donors are more likely to give money to a recognizable figure affiliated with an organization, rather than to a fundraiser who contacts them on the organization's behalf.
Initiate the conversation by getting the prospective donor to acknowledge an existing problem. If you're raising money for a local organization, you might open the conversation by asking what he or she thinks is the greatest crisis facing your region.
2. Make your intentions known. You shouldn't just introduce yourself by asking for money, but you should make your intentions known near the end of your small talk. Start by asking how the person is doing, or commenting on the weather, and then use that as a lead-in to say, "I'm working with _______, and we're trying to help _______ be able to ________."
If the individual feels like you're just having an aimless conversation and then suddenly he or she is asked for money, it may create tension and cause the person to feel like you're shaking them down. Be calm, friendly, and casual, but don't drag your feet about making it clear that you have a purpose.
3. Let the other person speak. Chances are, if you launch into your usual appeal to a person on the street who's never donated before, that person will walk away. But if you have created a dialogue, and made room for the other person to speak, you may be able to get that individual to feel engaged and a part of the solution.
Try asking a Question : . Say something like, "What do you think is the biggest problem our community faces?" Once the person has answered, instead of simply saying, "Yes, you're right. Will you consider donating?" try a more nuanced approach. After the person says what he or she sees as the problem, just say, "How interesting!" and keep silent while remaining interested.
People fear silence, and the person will probably fill that gap by elaborating on why that issue is important. That potential donor may go on to talk about how a family member has been affected by those issues. This gives you an in to take the specific concern he/she has and run with it. It's no longer an abstract concern, but a specific problem that may have affected the individual personally.
4. Make a specific request. If you leave a donation appeal open-ended, the person may not end up donating, or may only give a few dollars. But if you ask for a specific amount, it takes a lot of guess work out of the equation for that individual, and makes it easier to commit to your request. For example, if the person seems interested, say something like, "Well, we can make a difference. For just _____ dollars, you can help accomplish ___________."
Another way to ask for a specific amount is to put the ball in their court. Ask something like, "Would you consider a gift of _____?" or "Is ______ something you'd be willing to consider to help tackle the problem of __________?"
5. Be persistent. Many people will say no right off the bat, but others may simply need to be persuaded a bit more. Perhaps someone might say that the amount you requested is too high. If that happens, let the person know that any donation amount would be a big help, and ask if there's a slightly lower amount that the person would be willing/able to donate.
Don't be aggressive with your appeal, but do be insistent that your cause is worthy and that any donation amount would help that cause.
6. Thank the person either way. If the individual is willing to donate, then it's cause for celebration. You can thank the person and let him or her know that that donation will go a long way towards solving or addressing the issue at hand. But even if the person is not interested in donating, you should still be polite and appreciative of their time. Simply say, "Well, thank you for your time and have a wonderful day."
Expressing gratitude and courtesy can go a long way. Just because someone isn't interested in donating, that doesn't mean the situation won't change. Perhaps next year the people who said no will have heard or read more about your organization, or perhaps the individual will have been personally affected by the issue you're seeking to address. Making a good impression now, even when turned down, may be what helps you get a donation next year.
7. Follow up with donors. If someone gave a donation, you should absolutely express gratitude. Send the donor a thank-you letter and a gift receipt (in case they want to write it off on their taxes or simply have a record of the donation). It's best to send these items as quickly as possible so that the donor knows that the contribution was greatly appreciated and will be put to good use.

Community Q&A.

Question : How do I ask a rich person for 50,000 dollars?
Answer : Follow the instructions listed in the article above. However, they will likely say no.
Question : How can I get money if I need it urgently?
Answer : Get a job, start a blog, make something, or ask for a small loan.
Question : How can I get help with my power bills and the foreclosure on my house?
Answer : There are probably social services nearby that can help.
Question : How can I raise money for my wedding?
Answer : Ask friends and family members if they are willing to pitch in some money to help fund your marriage. In return, send them invitations.
Question : How can I find money for my daughter's marriage?
Answer : Loans, relatives, friends, or you could try planning a wedding that won't cost you much!
Question : Where can you apply for a small business loan with bad credit?
Answer : You can try becoming a member of a credit union and try for a loan there.
Question : How do I ask for money if I am about to be homeless with an autistic son?
Answer : Ask family and friends, and tell them your situation. Look for government programs that can help, and depending on the age of your son, you may be able to get financial help for him. You can also ask family and friends if the two of you can stay with them while you get back on your feet. That way, you have an address while you look for a job.
Question : I need a loan to deal with a parent's sickness, what can I do?
Answer : Loans are not the only solution to sickness, there are organizations that provide affordable medical care. Search for these in your area. You might also consider launching a donation campaign through Kickstarter or another fundraising website.
Question : How can someone fund me to help me spread the word of God?
Answer : Try doing a simple fundraiser, like a lemonade stand or a car wash.

Tips.

Many people are more motivated to help you with money if they sympathize with your goals or interests. Try to tailor your appeal to each individual donor, based on how that donor seems to respond to the issues you address.
Always send a thank-you note to your donors, regardless of how much they sent you.

July 02, 2020

How to Find Investors for a Small Business

How to Find Investors for a Small Business.

If you want to start a small business or expand an existing one, then you’ll need to find money. One option is to bring on investors. There are many potential investors out there. However, you need to identify which ones will invest in your business and then put together a compelling presentation. When you meet with investors, remember to answer questions with confidence.

Part  1 Identifying Potential Investors.
1. Ask small business groups. You might not know where to begin. It’s probably best to start close to home. Meet with other small business owners or stop into your local Chamber of Commerce. Ask if they know of investors for your business.
2. Contact the Small Business Administration (SBA). In the U.S., the Small Business Investment Company (SBIC) program helps small businesses find investors. Over $21 billion of capital has been channeled through this program. Each SBIC is privately owned. However, they are licensed and regulated by the SBA.
You can find the SBIC directory here: https://www.sba.gov/sbic/financing-your-small-business/directory-sbic-licensees.
For purposes of the SBIC program, a small business generally has a net worth of less than $18 million and net income of $6 million or less. Furthermore, some business are prohibited from participating in the program.
3. Find a local incubator or accelerator. These organizations help start-ups turn their ideas into a real business, and they provide funding as well. You can find an incubator or accelerator near you by using the National Business Incubation Association’s directory listing.
Generally, incubators help start-ups or new businesses, while accelerators help already-established businesses grow faster.
Incubators might not provide investments directly. However, they can help connect you to potential investors.
4. Look at online crowdfunding. You can reach investors worldwide by using an online crowdfunding site, such as Equity.net. These websites give you access to hundreds of investors who can help you finalize your business plan and grow your business.
5. Remember family and friends. People who know you might invest in your business, especially since they can see your drive and determination. Remember to approach them as you would any other investor.
Friends and family will want some return on their investment, just like other investors. However, you might be more flexible in what you can offer. For example, instead of making them part-owners, you might want to provide them with free goods or services in return.
You also should think about asking people you know for a loan instead of for an investment. With a loan, you don’t have to give up any ownership in your business. Also, if your business fails, you can wipe out a loan in bankruptcy.
6. Hire a business capital broker. These brokers have networks of potential investors that they can contact. You can find a business capital broker online or by talking to other businesses that might have used a broker.
7. Consider if venture capital is right for you. Venture capital is a term used to describe a variety of investors, including private equity firms, venture capital firms, and angel investors. Although different, they share similarities.
They take big risks for potential big financial rewards. Accordingly, venture capital usually invests in industries with large growth potential, such as technology or biomedicine. Very few businesses qualify for venture capital financing.
They are actively involved in your business. For example, they will probably demand a seat on your board in exchange for investment capital. However, they often are experienced in your industry and can help you grow.
They have a longer investment horizon than other forms of financing.
8. Find venture capital investors. Look online at websites such as Angel Capital Association, Angel Investment Network, and Funded.com. Investors use these sites to find businesses to invest in.
The Angel Capital Association has a directory listing accredited investors. You can search by region or state. Links are provided so that you can visit the investor’s website to learn more about them.

Part 2 Putting Together a Presentation.
1. Run the numbers. You need to know how much money you’re after. If you need a small amount, you might only seek out one investor. However, if you need a lot of capital, then you’ll need to know that as well. Calculate how much money you need for your small business.
Also consider how much of your equity you are willing to give up in return. Investors don’t give loans. Instead, they take a share of ownership in exchange for money. You’ll need to come up with something reasonable.
For example, if your business is worth $100,000 and you want $25,000, then you’ll need to give up around 25% of the business’ equity.
2. Update your business plan. Your investors will want to see your business plan, which you should have already created if you are an existing business. The plan will identify your market, competitors, and include financial projections for five years.
Update the financial information so that it is current.
You should also bulk up the executive summary to your plan. Investors often will skip other parts but focus on the summary, so spend extra time on it.
Make the business plan colorful and include graphics so that the information is easy to digest.
3. Research the investor. You need to know whether a potential investor will be interested in your business. Many investors focus on only certain industries, so you’ll save yourself time if you figure out ahead of time their focus.
Look online to check what businesses they have invested in.
Look at their LinkedIn profile to see if you know people in common. If so, ask whether the investor might be interested in your business.
4. Ask for a meeting. There’s no one way to reach out to an investor. If someone recommended the investor to you, then mention the recommender’s name in your email or when you call. Alternately, you can send your email to the recommender, and they can then forward it on to the investor.
In the body of your email, clearly communicate what you do.
Mention the age of your business. Are you a start-up? Have you been in business for ten years?
Identify any other investors you have worked with. For example, an investor might have given you start-up funds five years ago.
Provide dates when you are willing to meet. Try to be as flexible as possible.
Proofread your email so that it looks professional.
Attach something to show the investor your business. For example, you might create a short video that shows your products or services.
5. Know your story. Investors aren’t only investing in a business. They are also investing in a person—you. Accordingly, they’ll want to know stuff about you. You need to be able to explain the following.
What about your background has led you to this point?
How have you benefited from your previous business experience. Be prepared to point to specific achievements.
6. Prepare for common questions. You can’t anticipate in advance everything a potential investor will ask you. However, there are some common questions you should think through.
What has been the biggest mistake you’ve made in your business?
How are your competitors outperforming you? Why?
Is anything working against your business, e.g., new regulations, demographic changes, etc.?
Why are you seeking funding?
What are your long-term growth plans? How do you intend to get there?
7. Get help from a Small Business Development Center. Your nearest SBDC can help you pull together a business plan, find potential investors, and prepare for meeting with investors. Contact the nearest SBDC and schedule an appointment.
You can find the nearest office here: https://www.sba.gov/tools/local-assistance/sbdc.

Part 3 Meeting with Potential Investors.
1. Make a memorable presentation. You’ll probably make a presentation to investors, which can take many forms. For example, you might make a PowerPoint presentation or create a booklet for the investor to flip through. With other investors, you’ll simply sit and talk. Whatever form your presentation takes, it’s important not to simply repeat the contents of your business plan.
Yes, the investor wants to understand your financials, which is why you have a business plan handy for them to take and read. However, it doesn’t hurt to get creative.
Show the investor your product or service. If you are expanding a pastry business, have an assortment of pastries with you. If you provide a service, then you can create a short video that shows your business in action. You need to give the investor a concrete idea of what your business does.
Remember that pictures are more memorable than words. If you create a PowerPoint, don’t fill it up with text.
2. Be brief. Your presentation shouldn’t take more than 20 minutes. If you use a PowerPoint, then it shouldn’t have more than 15 slides. Practice your presentation until you it is the right length.
3. Ask for advice at the first meeting. Don’t dive right in and ask for money. A potential investor needs time to mull over your business idea before they can decide whether they want to invest. Accordingly, you should spend the first meeting tapping the investor’s business knowledge.
However, you can subtly work money into the discussion. For example, you can say in an offhand manner, “I’ve been thinking I’d need $130,000 to open a new store in that location, but I’d like to hear from you if there are hidden costs you’ve found in your experience…”
4. Be honest. An investor won’t cut a check until they perform due diligence. They’ll want to take a closer look at your business financials, and they will uncover any misrepresentation you make. Always be honest in your business plan and in your conversations with potential investors.
Admit when you don’t know an answer. An investor will appreciate your honesty.
If you lie to one investor, then they will talk to others in their community. You’ll get a bad name and not be able to find any investors.
5. Project confidence. Potential investors want to see that you have faith in your business. Avoid being arrogant, which shows that you are insecure. Instead, project quiet confidence in the following ways:
Listen. Insecure people chatter all the time and laugh awkwardly to fill up silence. Be prepared to listen.
Stand up straight. Put your shoulders back when you sit and stand.
Make eye contact when talking and listening to someone.
Avoid fidgeting.
6. Remember to ask the investor questions. Any investor will take an ownership stake in your business. Accordingly, you’ll need to vet them as well. Ask the following questions before agreeing to work with someone.
What other projects are they investing in? Check whether or not they are similar to your business, or whether they are in different industries.
When was their last investment? If the investor hasn’t been investing in a while, they may not be serious.
How do they plan to increase your company’s value?
What factors will you consider before deciding to invest?
How active do they want to be in the business? Does the investor want a seat on the board, handle day-to-day operations, etc.?
7. Follow up with the investor. After a first meeting, thank the investor by sending them an email. It’s unlikely that they’ll agree to invest after only one meeting, so you want to keep the doors of communication open. A short, professional "thank you" email can do the trick.
You can also keep the investor updated on the progress of your business. For example, if you were rolling out a new product, let them know how it is going.
8. Stay professional if rejected. It’s hard to tell why people choose not to invest in businesses. You might not have been a right fit, or they might have already chosen to invest in a similar business. Regardless of the reason, you can control how you respond. Stay professional and thank them for their time.
Remember that you might run into the investor later down the road, when they are more willing to invest in you. There’s no reason to burn bridges right now.
9. Keep trying. Avoid being discouraged if you don’t get many offers, or if every presentation you give results in a rejection. You probably haven’t found the right investor yet. Keep searching, because the perfect investor may still be out there.

FAQ.

Question : How can I attract customers for my trading business?
Answer : Advertisement is key. Go to your local paper and ask them if they would run an article on your business, or just buy advertising within the paper. You can also start a social media group and add friends and family to help spread the word. Creating a website, or having one created for you, is also ideal. this will show possible investors that you are dedicated to this and will also give them a chance to see what would be in it for them.
Question : What are basic rules to follow when speaking to an investor?
Answer : You must possess and demonstrate the following characteristics: Professionalism, manners, wisdom, soundness, honesty, commitment, passion and determination.
Question : I'm looking for an investor for my restaurant. Where can I find more information?
Answer : Seek out colleges and universities that have master chef programs. You will find that the same people who are donating money to these schools come from within social circles that are also interested in helping to establish finer restaurateurs.
Question : How can I find an investor for an international school I want to establish in Ghana?
Answer : For an international school, you could try fundraising websites and create a social media group to help spread awareness. People will donate money to worthy causes, if they are aware of them.
Question : How do I find someone to invest in a business I want to purchase?
Answer : It depends on the type of business you are purchasing. Look for trade associations local to you area and find out if they have regular meetings you might attend.
Question : How can I find a business partner?
Answer : You can put the word out on social media or by handing out flyers at pertinent businesses. Offer perks for your business partners.
Question : How can I find a foreign investor to distribute products in Myanmar?
Answer : I would start with contacting the Myanmar Embassy in Washington, D.C. They should be able to assist with your questions concerning international trade, as well as help to put you in contact with the people who do the licensing for international trade and distribution of goods and services.

April 07, 2020