I recently came across a really good article by Paul Graham on fundraising for startups. He makes some really good points and his core message resonates with me after months of working on USP, and probably resonates with anyone involved with a social startup.
The hardest part of a startup is making something people want: most startups that fail, die because they didn't do that. But the second biggest cause of death is probably the difficulty of raising money. Fundraising is brutal. I'd add to that point by saying that it's even worse if your idea is social, because funders immediately get nervous about the connotations for potential for return on investment. Here's the full article http://www.paulgraham.com/fundraising.html, but I must warn that it's a long one!
The short version...
- Have low expectations
- Keep working on your startup
- Be conservative
- Be flexible
- Be independent
- Don't take rejection personally
- Be able to downshift into consulting (if appropriate)
- Avoid inexperienced investors
- Know where you stand with them in terms of commitment
