Fundraising Basics: The successful ‘elevator pitch’ for social entrepreneurs

You know the scenario – you’re at a conference, networking event or job fair and have just a few moments to “sell” yourself to a donor or employer. For a social entrepreneur, this “elevator pitch” is crucial to securing funding for innovative development business ideas meant to reduce poverty and increase economic opportunity around the globe. “As an entrepreneur, you need to go into the room with a list of people who are going to be in attendance and you need to be really targeted about the conversations you’re going to have,” one industry expert told Devex. Ideally, you’ll have established a relationship with a funder before you need the money. But if you haven’t, consider your pitch “the beginning of a conversation,” said Olivia Khalili of Cause Capitalism. Remember: Competitions, grants and other funding opportunities are proliferating, making access to funds easier for a wide range of social enterprises – but also more competitive. How can you turn a brief encounter with a donor official or private-sector investor into a business relationship that will help you fund your social enterprise? We asked a series of private-sector investors and development experts what social entrepreneurs should do to prepare for a successful pitch to a donor. What works 1. Have a good idea That’s the bottom line, really. And while “good” may be in the eye of the beholder, in general, the more innovative, cost-effective and scaleable a product or service, the more likely it is to attract funding. Private-sector investors and even government donors want to ensure that they’re getting the biggest bang for their buck, so they tend to fund the ideas that can improve the lives of the largest-possible number of people quickly and with limited resources. To get an idea of how to boost your presentation using a variety of business data, watch Andy Redfern pitch Ethicalsuperstore.com at ClearlySo, an annual social business conference in the United Kingdom. 2. Do your homework Know what the funder does, how it works and how your idea will fit into its operations. If a good idea fits in with an investor’s funding portfolio overall, the rest of the pitch is secondary, one private-sector official told Devex. “Every grant maker is different,” said one industry expert, “so when you’re pitching a foundation or some sort of entity, you absolutely have to know the back story and you have to know how what you’re doing could fit within what it is they’re trying to fund.” Know the geographical area the potential funder works in. Don’t pitch an initiative in the developing world to an investor that works only in Europe or the United States – it may sound obvious, but it still happens all too often, funders said. 3. Keep it short and to the point Have a two-line resume and a two-line pitch. Ask a few questions to gauge whether you’d be a good fit for the investor, but then move on. Avoid jargon, and don’t seek long reams of information especially if it can be gleaned from the organization’s website. “There’s no quicker way to alienate someone than to use a lot of [jargon] to describe what could otherwise be described rather simply,” said one investor. “Pretend you’re describing your concept to a 10-year-old.” 4. Don’t expect an immediate answer Few investors you’ll speak with will dole out money on the spot. Trust that they will contact you if your social enterprise is appealing and feasible – and if you have business cards to share. 5. Take no for an answer Don’t argue with the funder or worse yet, argue that their funding approach is wrong and that they should be funding more work in your area of expertise. 6. Be honest about what your product does, even if it doesn’t fit in with the funder’s portfolio Honesty and straightforwardness was highly prized by funders interviewed for this article. Remember that even investors that end up not funding you may be helpful as you network the donor landscape. 7. Be passionate Be enthusiastic about your work and convey that fervor to funders. Tell them how your idea will boost rural development or help achieve the Millennium Development Goals, for instance – but avoid hyperbole. “Make sure you’re speaking to their interests instead of delivering a rote pitch that doesn’t apply to what they’re looking for,” Khalili said. Keep your ego in check and be humble. Social entrepreneurship is a collaborative field, and funders can be put off by people who think they know it all and can’t learn from others. 8. Make it personal Make a personal connection between your idea and individuals suffering from the problem you’re addressing, but without manipulating people emotionally. “You need to frame your idea within the context of the end beneficiary and talk about them as human beings and then talk about them in a way people will have a visceral reaction to,” another industry expert said. But don’t use emotions to manipulate people “or you’re going to get a horrible response,” he continued. For example, avoid cliche images like the starving child in Africa with flies in her eyes. Check out this speech by Wine to Water Founder Doc Hendley for inspiration. What doesn’t work 1. Don’t ask general questions about the investor Know exactly what the international donor or investor funds and how you fit into its portfolio. 2. Don’t ask loaded questions Use every conversation with a potential business partner to build trust – and don’t gamble that trust away by seeming antagonistic. “A few people set me up with a loaded question, like, ‘Would you fund changing the world to be a better place?’” one funder said. “Maybe that would work for someone else, but it didn’t for me.” The truth is, it probably won’t for others either. 3. Don’t be vague A good business pitch is confident and informed, not desperate and pitiful. Don’t say things like: I want to do something useful. What should I do? I have a technology. It can do anything. What should I do? “I don’t know what to do with that,” said one private-sector official who’s heard it all. 4. Don’t spend a lot of time explaining the problems of the geographical area you work in Either the funder knows all about the problems in Africa or Asia because they work there, or they don’t know because they don’t work there and are thus unlikely to fund your idea. Rolf Rosenkranz contributed to this report. Read more social enterprise business news: - Inclusive Business and Impact Investing: A Conversation with SNV’s Neil Ghosh - Building Bridges - What Aid Agencies Can do to Boost Social Enterprise - Anti-Poverty Model Taps an Unlikely Partnership in Latin America Read more business news articles.