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Seven tips to raise social enterprise funding

Posting in Finance

In a fragile economy with high levels of unemployment worldwide, attracting finance for start-ups that are not immediately profit drivers can be difficult.

Social enterprises apply market strategies to fill a social or environmental need, boosting business and society at the same time. However, in order to secure initial investment, creators must show how the business' impact can be maximized and there must be growth potential.

Many social enterprises fall at the first hurdle. The business must not only be a vision of how to improve society, but it must also be viable. Don Shaffer, CEO of RSF Social Finance, has shared a number of tips that today's entrepreneurs can use to their advantage when pitching their project:

1. Build a strong management team. Base your choices on a ruthless assessment: what does each person bring to the table?

2. Keep business plans short. No-one wants to read through a 70-page binder; instead, address key questions including what your business brings to society, and what is unique about your plans.

3. Have a viable, practical plan. Important for both impact and financial growth, keeping things real is key. Unlikely targets and projected figures are likely to make investors turn the other way.

4. Seek appropriate funding. Are you planning to sell your business in the future, and what equity are you willing to give? Before looking for finance, think about how your investor is going to get their money back.

5. Find specialist funders. Dedicated, specialized social enterprise funders can prove to be an invaluable resource and can help your business grow through their understanding of market opportunities.

6. Ask for advice. Confidence is key, but acting brazen will get you nowhere. Instead, ask for advice when you need it -- sincerely.

7. Show dedication. You may have done your research, but an investor needs to know you're willing to go the distance before parting with their cash.

Read More: Huffington Post

Image credit: Dell

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— By on July 2, 2013, 1:23 AM PST

Charlie Osborne

Contributing Editor

Charlie Osborne is a freelance journalist and photographer based in London. In addition to SmartPlanet, she also writes for business technology website ZDNet and consumer technology site CNET. She holds a degree in medical anthropology from the University of Kent. Follow her on Twitter. Disclosure