Success Factors in Funding Start-Up Ventures

Thursday, March 1, 2007 (All day)

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)?