Scott Porad

I am on the board of a local non-profit.  Like the broader economy, and many non-profits, finances have been tight.  The good news is that our 2010 budget is looking pretty okay.  The not-so-good news is that our 2011 projections are not so rosy.  As a result, we met over the weekend to discuss and plan.

A pastor from a local church with a lot of experience in non-profit management and fundraising who counsults with other non-profits came to meet with us.  We had a long meeting, but he shared a few key thoughts on fundraising that somehow seemed applicable to the world of startups:

• Philanthropy directly correlates to volunteerism.
• If you need money, ask someone for advice.  If you need advice, ask someone for their money.
• People will not contribute to a non-profit because it has needs; they will contribute because it meets their needs.
• Fundraising is about having relationships…with people who make decisions about money.

How I word translate these to startups:

• Revenue from customers directly correlates to participation.
• If you need to raise money for your startup, build a circle of advisors to can guide you.
• Customers will pay for your service because it meets their needs.*
• Business is mainly about relationships, but revenue is about relationships with people who make spending decisions.

A final note on the item I starred (*): Kathy Sierra extends this thought in a way that I am fond of.  She says making great products isn’t just about serving customer needs…it’s about making them feel that they’re more excellent for using your software.