Success Factors in Funding Start-Up Ventures

by Paul Vandeventer, President & CEO

Funders often ask Community Partners what factors we consider and what questions we ask when reviewing early stage start-up projects for fiscal sponsorship.  Recently we prepared a checklist of seven factors and related questions designed to help funders through the assessment process.  It’s a useful list for civic and social entrepreneurs themselves to read and re-visit periodically: 

1. Aspiration

• Is the venture a good idea around which community interest exists or can be built? 
• Does it show prospects for high performance in the face of competing claims on the same civic territory?
• To what extent is it “game changing” in a way significant enough to merit attention and attract capital? 

2. Privileged Insight 

• Do the people associated with the venture understand something about their area of endeavor in a compelling way that others do not (such as a certain segment of the community, a social issue or a program approach)? 
• Is the insight specific and does it distinguish the venture in some exemplary way? 

3. Relationships

• Do the leaders have the right relationships (with funders, directors, advisors, strategic partners) across sufficiently diverse social networks to assure acceleration toward success? 
• Do distribution and diffusion networks exist?
• Does the venture have a recognizable identity distinct from others competing for attention? 
• Do the leaders have credibility with others in the same and related fields? 

4. People 

• Do the people involved demonstrate exceptional qualities of leadership?
• Has the key person and team been identified to move the idea forward? 
• Does he or she have proven high integrity?  Capability?
• To what extent have the leader and team participants taken risks in the past and delivered? 

5. Capitalization

• Are sufficient financial resources in place or obtainable to achieve success and distinction for the enterprise and move it in a reasonable time to sustainability? 
• What levels of resource dependency and funder engagement are the leaders prepared to bear?

6. Time on the Ground 

• Does the venture have a track record even though it’s early stage and start-up?
• Do the leaders have individual track records that support prospects for success in this venture? 
• What accomplishments have accumulated during the time the project has been operating?

7. Capacity Readiness and Results Commitment 

• Do the leaders resonate with the importance of creating supportive systems and structures – the infrastructure – alongside services?
• In what proportions are the leaders planning driven and action driven? 
• To what extent do members of the leadership group complement one another’s strengths and compensate for one another’s weaknesses)?
• To what extent are project leaders committed to influencing change and achieving results at various levels (individual, neighborhood, organizational, institutional, large systems, and policy)?