Venturing into New Fundraising Networks
With groundbreaking science and innovations taking place in the University setting, it’s the common hope of students and schools to develop those talents and discoveries into viable businesses. But we all know that this goal requires capital. So why not take a page from funded business founders who gain their startup revenue from Venture Capitalists (VCs)?
Fundraisers aren’t so different from organization founders in search of funding. We both rely on the support of someone who believes in the same idea that we are trying to advance. To meet the funding needs of our schools, we need to stay focused on the goal through the ups and downs of fundraising, just like a start-up founder has to stay committed to his or her core idea and long-term vision. We research our potential donors just like a successful funded founder researches potential investors.
So How Can Schools Benefit from Targeting VCs?
Venture Capitalists aren’t looking for a reason to hand out their money, but they do take smart chances on wise investments. By perfecting your individualized pitch and securing a sizable gift from a VC, you are welcomed into a whole new network of potential donors. An experienced VC will share insights with you about what is hot in an industry before it reaches the mainstream – because they’re getting their pitches from startups and catching the first glimpse of future trends. This can help you analyze your programs and projects to ensure that your school is making the best long-term decisions possible.
VCs talk to and watch one another. In the investing world, there is a phenomenon known as signaling. VCs regularly talk with one another about great investments and those that should be avoided. If your school’s project or program is innovative enough to secure a gift from a VC, ask that new donor who else you should be talking with about the opportunity to support your new program. Venture Capital is all about high-risk, high-reward. A VC may not see a pay-day for investing in your school, but there is recognition that comes with being an early subscriber to a new campaign – especially when there’s publicity and name recognition involved.
Who You Know vs What You Know
What you are inviting a VC to donate towards is certainly important. Nobody wants to support a program that is destined to fail. But funded entrepreneurs will tell you that who you know is equally as important in the world of Venture Capitalism. Just like soliciting an alumni donation after cultivating a relationship; having a soft introduction to a potential VC donor on good terms will increase your likelihood of closing a gift.
One entrepreneur recently wrote “Founders need “warm intros” to the investors, which generally come from people they know whether it be luck, circumstance, and social circles rather than merit or professional aptitude. The result is that well-liked entrepreneurs . . . get funding immediately”
Where Do I Start Connecting with VCs?
A handful of schools are getting a reputation for graduating alumni who have been successful at raising venture funding for their startups. Many smaller schools have alumni who have successfully secured funding for their startups too. Take a closer look at the entrepreneurs in your alumni database. Learn their stories: Who are their mentors, who is funding them and, who told them no. Your entrepreneur alumni are a fantastic source of information about investors, go out and engage with them.
Sources & Additional Reading
 The Terrible Truths of Fundraising: Lessons from a First-time Founder, Julia Enthoven, Kapwing.com
 The alumni of these universities raised the most VC in the past year, Joanna Glasner, Techcrunch.com