Asking someone for money is one of many people’s greatest fears.
We have a strange relationship with other people’s capital. For some reason we have no problem selling someone lemonade on the side of the road as a kid, but asking a friend to invest as an adult in our business is a horrifically daunting task.
As someone who for years feared, hated, and generally avoided asking people for money at all costs, I’ve had to study what enables great fundraisers to succeed so I could replicate their efforts.
The truth is that some people naturally love to ask others for money. Those individuals are gifted salespeople, but I can assure you they are the exception rather than the norm. If you have concerns about asking people for money, you are in the majority. So here are four essential steps to successfully making a financial ask.
Step 1. Define and Envision The Person Your Ask Will Benefit
The first step is to acknowledge that the mental and emotional reservations in these situations rarely stem from the other person’s relationship with money. You hate asking because of your own relationship with money.
In my case, my parents raised me to be self-sufficient and not be someone who needed a handout. I took great pride in my early entrepreneurial endeavors, whether it was running a March Madness Bracket in middle school or selling burned CD’s on Ebay in high school. So as Pencils of Promise grew, I couldn’t stand the thought of asking people for money because I equated it to personal weakness.
It was only through a course I took called Exponential Fundraising by Jennier McCrea and Jeff Walker that I realized the fundamental flaw in this thinking was that I was putting myself at the center of the equation.
You are not asking for yourself, you’re asking for those you serve (click to tweet)
So Step 1 is to remove your ego from the situation, and define a beneficiary on whose behalf you are making the ask. Maybe it’s a disadvantaged child that your services will support, a coworker whose salary you want to pay, or your own children who your company’s financial gain will benefit.
Either way, until you determine who you are asking for outside of yourself you will never be able to move onto the tactical Steps 2-4.
Step 2. Ask Questions and Listen ActivelyOnce you arrange your meeting with your prospective donor or investor, you’ve already done half the work. Always remember that they wouldn’t take the time to meet with you unless they were interested.
Now that you’ve got your time together face-to-face, most people go into sales mode. They start pitching how great their organization or product is right away. They talk and talk and talk about the greatness of what they’re offering, and they’re dead in the water before even making any type of financial ask.
People are much more likely to put their money into an area of personal interest than one which doesn’t appeal to their tastes and preference. I don’t care if you have the world’s most beautiful chalet in the Swiss Alps, if I hate cold weather I’m not buying.
So the most important thing you can do for the majority of your meeting is to ask thoughtful questions to understand the other person’s preferences and areas of interest.
Sample questions might include:
- How did you get into your current line of work?
- What ideas and companies are you most excited about these days?
- What matters most to you when investing your money into a new venture?
- Are there certain things that you wish you could solve for?
- What do you want your legacy to be one day?
- What are some of your biggest wins in your career and why do you think they were successful?
Once you understand that person’s motivations, history and way of thinking, you’re ready to make your ask. But it’s all about listening and making sure your values and ideas for the future align. If they don’t align, don’t waste your time or theirs with the ask. But if they do, then in the words of my friend Lewis Howes:
“You are not selling, you are serving.” (click to tweet)
Step 3. Present An Opportunity With Exclusivity, Scarcity, and Urgency
The pressure is now on. Your heart is racing because you know it’s time to make the ask.
Just remember that this is not a one-way value exchange, what you are offering in return for their money is something of true value that will benefit them immensely. If you don’t deeply believe this to be true, you should not make the ask nor even be involved in the company you currently work within.
Make a swift and compelling pitch about how your venture is the perfect opportunity to address the specific things they are seeking to impact based on everything they shared with you. Speak confidently and look them directly in the eye throughout this entire part.
Next, you have to demonstrate that this is an opportunity that is only being offered to a select few (Exclusivity), there is a limited amount that will be available to those investing (Scarcity), and the window of opportunity is finite and will be closing at specific date – make it soon (Urgency).
Paint a picture of what you’re going to accomplish together, once again reiterating both the benefit to them as well as that originally beneficiary you are there to support in the first place and then state the following words, “I would like you to consider making an investment of XX.”
Step 4. Allow Silence to Determine The Response
This is often the most difficult part of any fundraising ask, especially for those who haven’t done this much and are uncomfortable with the process.
You finally make the ask, and immediately want to stuff it back in your mouth of out fear of rejection. You fill the air with jumbles of words so it’s not so obvious that you just asked for money, and the horrific encounter can hopefully be over soon.
This is the most important thing you’ll ever learn when fundraising. Once the ask is out there, you have to shut up. Don’t say a word.
More often than not the other person will take several seconds to respond. The dreadful silence will hang there like a thousand tiny daggers into your nervous system. Anyone who has been through this knows exactly what I’m talking about.
“In moments of truth, you need to give space for the truth to emerge.” (click to tweet)
What will inevitably happen, is for the next five minutes the less you talk the more the other person will fill the space. They’ll feel an inherent need to justify whatever their response is, whether yes or no.
If it’s a “No,” they’ll explain all the various reasons for their logic and you should continue to provide silence so they can share insights as to why it’s not a fit for them right now. Pay special attention to those words right now. Learn from why they’re not saying yes in that moment, because they’ll often give you clues as to why this could be a better fit at a later date or in a different incarnation.
“Every ‘no’ is really a deferred ‘maybe’ in disguise.” (click to tweet)
If they say “Yes,” then your short responses followed by silence will allow them to fill the space with their excitement about the opportunity and once again will give you ample learnings to apply to your future pitches.
Whether you get a yes or no, the truth is that the more times you step up to the plate the less daunting this process will become. Eventually you might even look forward to it.
If you have your own fundraising tips please leave them below so others can gain from your knowledge and experiences. Thanks so much and good luck out there.
Before You Ask For Money, You Should Read This…
Now that you’re equipped with the knowledge on how to successfully ask for money, you should make sure you’re taking the right steps to successfully start and scale your idea. I’ve compiled a 100% free resource that details how to do just that.
To grab you copy, just click below: