Managing
Finding Funding to Match Your Mission
By Holly Givens
Most businesses need financing and cap- ital through every stage from start-up to success. Where the money comes
from and who provides it can have a profound effect on how the business operates
and how happy an entrepreneur, especially a
mission-driven entrepreneur, will be with the
result. If finding the best financial partners
can make or break a business and its mission,
how can the savvy entrepreneur best approach the process?
These days, finding funding at all can be a
challenge. According to a 2008 poll conducted for the National Federation of Independent Businesses, just 41 percent of small
businesses that applied for various forms of
credit obtained all the credit they wanted.
While 8 percent received most of what they
wanted, 14 percent obtained only some of the
credit they asked for—and 34 percent obtained none of it. These approval rates were
found to be substantially lower than the previous year meaning that more and more business owners have no way to obtain credit.
Seeking equity financing is even more challenging. About 98 percent of the requests for
venture capital are not funded, says Cody Nystrom, senior associate at SJF Ventures, a venture capital partnership that provides equity
financing to companies seeking expansion
capital in the cleantech, technology-enhanced
services and premium consumer products
sectors.
Weighing the Types of
Financing Available
Both debt and equity financing offer op-
portunities to support your mission. Which
type of financing to pursue depends on the
particulars of each business, and the goals of
the business owner. Both types may be neces-
sary for a business at different times, and en-
trepreneurs need to understand the advan-
tages and disadvantages of each type of
money. (See the chart, “Funding to Match
Your Business and Mission” on page 16.)
The Importance of Having Shared Vision
Aligning financing with the vision of your
business is crucial, especially when working
with investors, says Gary Sprague, communications manager of RSF Social Finance in San
Francisco, a nonprofit that provides investing,
lending and giving services to individuals and
enterprises committed to improving society
and the environment. “If an investor doesn’t
have the same vision, then when you reach a
