Building Relationships with Funders

The donor who declined your request last month just referred their business partner to you. Sometimes "no" to the ask means "yes" to the relationship. Keep the door open for everyone. I watched a development director handle rejection beautifully last month, and it paid off in ways she never expected. She'd been cultivating David for eight months. Great relationship, clear capacity, genuine interest in their youth programs. When she finally made the ask for $25,000, he said no. "I'm overcommitted this year with other charitable obligations. I just can't take on another major gift right now." Most development directors would have been disappointed and moved on. But she did something different. "I completely understand," she said. "Thank you for being honest about your capacity. I hope we can stay in touch and maybe revisit this in the future." She sent a gracious follow-up email thanking him for his time and consideration. She kept him on their newsletter list. She invited him to their annual event with no expectation of a gift. Three weeks later, David called. "I've been thinking about our conversation," he said. "While I can't make a gift right now, I have a business partner who's been looking for youth organizations to support. Would you be interested in meeting him?" That referral turned into a $50,000 gift and an ongoing relationship with someone who became a board member. Here's what this development director understood: David's "no" wasn't personal rejection. It was honest communication about his current capacity. By respecting his decision and maintaining the relationship, she kept the door open for future opportunities. The prospect who can't give today might refer someone who can. The donor who declines your ask might increase their gift next year. The foundation that turns you down might recommend you to another funder. But only if you handle rejection with grace and keep relationships intact. Because in fundraising, "no" often means "not now" or "not this" - but it doesn't have to mean "not ever."

Instead of asking investors for 30-minute calls, try this: After years on the investor side, I’ve seen countless ways founders try to connect with investors, and many fall flat. Not because they lack potential, but because they’re missing a clear, intentional strategy. Here are four practical ways to build genuine, value-driven relationships: 1️⃣ Add them on LinkedIn and build in public Let us see your journey! Share your wins, your learnings, what you're building. Give us a reason to care. When investors see consistent, tangible progress from afar, it creates a natural sense of interest,  that "I need to know more" feeling. 2️⃣ Send a message that sparks curiosity Whether it’s an email or a DM, lead with a compelling blurb that hints at your progress and how it connects to your goals. Investors are human, give us a reason to be genuinely curious about what you're building beyond a future ask. 3️⃣ Ask if you can add them to your investor update This is one of the most underrated tools. A brief, quarterly update (3-5 bullet points) on your key milestones keeps you on their radar without demanding a meeting. It builds a powerful narrative over time, showing consistent progress. (and if you don’t have an update yet... that’s something worth fixing first.) 4️⃣ If possible, meet them in person. Nothing beats face-to-face. Investor relationships grow faster at events, conferences, or even casual meet-ups. Show up prepared, be ready to share what you're building, and just be yourself. Real-world interaction makes a huge difference. Scheduling a call “just to keep them in the loop” can easily backfire, especially if you're not fundraising yet. Investors are people too, with full calendars and limited bandwidth. Empathy goes a long way! Want some extra tips on how to write truly compelling blurbs that get attention? DM me! #Fundraising #InvestorRelations #StartupStrategy

What's the secret to securing funding from foundations? This question, in various forms, has been asked of me a lot since I my post about the fundraising component of Mongabay's strategic plan (https://bit.ly/3NVeRd2) a few days ago. To be clear, I don't claim to be an expert in this field. However, I can certainly share insights from my decade-long experience of elevating Mongabay's foundation support from zero to about $5M last year. The right messaging When I initially began seeking funding from foundations, I received no response about 90% of the time. When I did receive a response, it was almost invariably, "no thanks". Despite my belief that my initial outreach was targeted (e.g. foundations that supported areas aligning with Mongabay’s work like journalism and conservation), I soon recognized a need to revise my targeting and messaging. Program officers at philanthropic foundations are usually in the business of giving away money effectively. That last word is important: You might be surprised how many times I’ve been told that it’s hard to give away money effectively. In that initial outreach, I put too much emphasis on what Mongabay is doing rather than how its work could help program officers better accomplish their foundation’s objectives. So I tailored my message to explain the value proposition of Mongabay’s independent journalism. This was a nuanced argument because to many, journalism can feel like a peripheral intervention when compared with establishing a protected area, for example. Know your strengths My job was to explain how objective journalism – distinct from PR and communications – could act as a catalyst in several ways, including informing key decision makers, increasing awareness, and functioning as a due diligence tool. Understand your audience Adapting my message and ensuring it reached the right person required research to understand a foundation’s strategy and objectives, as well as the individuals responsible for granting funds to organizations. Program officers are typically inundated with requests – keeping your message short and clear may help it break through. Build relationships In the fundraising world, it's often said that "People give to people, not causes." This might be less true with institutional foundations, but relationship-building is still critical. Seek intros My success rates with cold outreach have been low – the most common response to my foundation inquiries remains a lack of response. Don't hesitate to ask current donors for appropriate introductions to other funders. Measure impact One reason, I believe, for Mongabay's high renewal rate from foundations is our commitment to gathering evidence of the impact of our work. Providing an example of impact can be a great way to follow up with a donor. _ While everything I’ve shared here is very basic, I confess I've overlooked these points myself at times. Foundations aren't easy, but they can provide a strong base of support.

Fundraising is brutal, and the worst part is that 90% of funds will ghost you. But it doesn’t have to be this way; some funds break the norm. During our pre-seed round for Chezie, I encountered a few standout funds that genuinely care about founders, and they made all the difference for me: 1. Alumni Ventures: Andrea Funsten passed but didn’t leave me hanging—they gave a detailed reason for why they weren’t investing, which is rare. 2. Harlem Capital: I’ve mentioned them before, and it’s worth repeating. They shared their due diligence documents with me, which provided insights that helped me in ways that went beyond the immediate investment. 3. 2045 Ventures: Carmen Palafox moved fast with her investment in Chezie. It took three weeks to complete from start to finish, and she even followed up when my response got lost in the shuffle. That kind of effort and action makes a founder feel supported. 4. Newtype Ventures: They passed because we were too early, but they weren’t done helping. Griffin Olesky introduced me to multiple other investors who better fit our stage. My point is that raising capital doesn’t have to feel like a one-way street. When funds genuinely invest in founders—even without writing a check—it builds trust, relationships, and momentum. Here’s to more investors who move with integrity and conviction. At some point, VCs will realize two things: - Founders talk, so every person you ghost is another founder who won’t speak positively about their experience with you - Fundraising is about relationships; treat founders well, and they’ll pass deal flow to you I wish more funds operated like the ones I’ve shared above. Founders, have you had positive experiences with any other funds? Shout them out in the comments.

If you’re raising money, Don’t start with the pitch deck. Start with the relationship. Fundraising isn’t just about convincing someone to write a cheque. It’s about building trust with people who believe in the journey. Great founders don’t chase quick cash they invest time in finding the right fit. Here are 7 Fundraising Lessons I Learned the Hard Way: 1️⃣ No Signal, No Interest ❌ Raising on an idea alone rarely works ✔️ Show traction, even small wins go a long way 2️⃣ The ‘Perfect Deck’ Trap ❌ Spending weeks tweaking fonts and slides ✔️ Investors buy into the story, not the style 3️⃣ The Spray-and-Pray Approach ❌ Sending cold emails to every investor you can find ✔️ Warm intros and thoughtful convos convert better 4️⃣ Overpromising the Future ❌ Hyping up unrealistic projections to impress ✔️ Be ambitious, but grounded, it builds credibility 5️⃣ Forgetting the Fit ❌ Accepting money from anyone willing ✔️ Align on values, expertise, and how they can add value 6️⃣ Talking, Not Listening ❌ Pitching non-stop without asking questions ✔️ Learn what they care about and speak to that 7️⃣ Asking for Money Too Soon ❌ Leading with "we’re raising" before earning trust ✔️ Start with advice, share your vision, and let interest build naturally Fundraising is a full-time job. But it doesn’t have to feel like selling your soul. Keep it honest. Keep it human. You’re not just raising money. You’re building a team of believers. What’s one fundraising lesson you wish you knew earlier?

I was in a group discussion recently with other fund managers about lessons learned in the raise of our most recent Bread and Butter Ventures $40M Fund IV. While I don't claim to be an expert, I did have many learnings! Here are a few that I shared, which I think also apply to startups raising rounds of funding. 1) We found it helpful to keep the foot on the gas pedal and wait to hold a first close until a majority of the fund is raised. For raising institutional capital, this made a big difference (gave institutions new to our fund the confidence that a shot at reaching the full goal). For this one, we did our first close at about 60% of the fund target, largely with existing LPs, and it helped to bring in new institutions after that to have the foundation secured. 2) Run a fundraising process like an enterprise saas sales process. Track the pipeline and meticulously follow up to keep prospects moving through the funnel. I had a system to check in every 7-10 days with a new piece of "marketing material" which could be a deeper dive overview on one of our verticals, a one-pager we put together on deal flow and sourcing process, updated financials at the end of a quarter, a key business update from a portfolio company etc. 3) Build relationships for the long term but also ruthlessly prioritize for now. So many institutions want to track you for the next fund; try to get a sense early on if they are actively deploying and if they would potentially invest in the next few quarters (or if this is a get to know you for a future fund). If the latter, send them a quarterly update and build the relationship but beware of spending too much time in the weeds during an active fundraise. 4) We kept hearing how differentiation continues to be hugely important for funds, just as it is for us as GPs looking at deals. We all have so many strengths across our work, firms, and teams - but it was helpful to pick one thing and really lean into it from a marketing perspective as differentiation. For us, it was the "Minnesota homefield advantage" - while we invest nationally, we lean heavily into the core sectors in our backyard (healthcare, foodtech, enterprise saas) and work with 18 F500 and large enterprises based there. That was probably the differentiation that resonated most so we tried to lead with that and continually reinforce that throughout the raise process. In the end, authentic relationships for the long run are the north star, and I'm grateful to work with values-aligned and wonderful investors. What learnings would you add from your fundraise or what advice would you share? #earlystage #venturecapital #seedstage #fundraising

This is such an incredible moment for philanthropy to spread its wings and use the full set of tools in our toolbox. We can be so much more than an ATM that dispenses cash (but only if you push the right buttons). Very early in my career I supported many entrepreneurs who had started foundations and brought that scrappy, problem-solving mindset to their philanthropy. Many of these individuals didn't think of themselves as "grantmakers" - they didn't think of philanthropy as a professional pursuit at all (a double-edged sword to be sure, but at the moment I'm looking at the bright side). If you think of yourself as a grantmaker, you’ve already narrowed the scope of possibility. You can only distribute grants and you specifically look for places where a grant can be used well. But if you think of yourself as a partner and a problem solver, and money as a tool, now you can ask the question: what’s the best way to structure this financial transaction to solve a key problem for this organization?   Sometimes it will be a grant, but sometimes it will be a loan, a loan guarantee, a contract or even an equity investment. (And while I get that offering a loan instead of a grant allows you, the funder, to recycle your capital to use again, what benefits YOU shouldn't be the driving force behind the decision. For example, loans can benefit the borrower more than grants when they build credit history, offer better terms than they could get commercially, or help them build experience and discipline around a revenue-generating activity.) Beyond financial assets, funders have other incredible assets that can be equally, if not more valuable. The ability to hire professional staff whose entire job is to understand issues deeply, know the field and its players, develop networks and trusting relationships with front-line partners and other funders is an incredible asset. Your staff should be a force multiplier on your funding. You also have incredible networks and access to other people in power. Sometimes financial support needs to be paired with advocacy on behalf of the organization or the cause, or an introduction you can make to the perfect contact to help achieve their goals. Expanding your toolbox is the first step - so ask yourself: "In this moment, considering all that I can bring to the table - knowledge, networks, access, flexibility, skills, and a potentially infinite time horizon with total independence from customers, voters or shareholders - what will best help my partners to thrive?" And then do that. #philanthropy #foundations #DAFs #impact #impactinvesting

Don’t Wait Until You’re Raising to Connect with Investors—Start Now! Some people believe you should only meet with investors when you're raising a round. I strongly disagree. Here’s my take👇 Start building relationships with investors from day one. Why? Closing a seed round isn’t about a single pitch; it’s about nurturing multiple conversations that build trust and momentum. Yes, it’s ideal to condense those conversations into a 3-6 week period when your metrics are solid. But as a founder, who really has the luxury to pause everything and focus solely on fundraising for weeks? I sure don’t. That’s why I recommend dedicating 10-20% of your time consistently to meeting with angels, syndicates, VCs, and more—long before you’re actively raising. Remember, investors aren’t just cash machines—they’re people. Get to know them as individuals, understand the thesis of the firms they represent, and if they’re interested, keep them updated on your progress. Think of it as building a sales pipeline. You add value where you can, but at the very least, you keep yourself on their radar by sharing the milestones your startup achieves. And who knows? Along the way, you might find valuable customers, employees, partners, or even friends. #Startups #SeedFunding #VCFunding #Founders #Newableadvice

    🔍 The Real Trust Killer: It’s Not Poor Performance, It’s Poor Communication As someone deeply involved in the startup ecosystem, I’ve seen firsthand that the primary reason funds and startup founders lose the trust of their stakeholders isn’t due to poor performance—it’s due to poor communication.   When you raise funds, you are essentially borrowing money with the promise of making it work. It’s a partnership, not a transaction. Here are some key points to keep in mind to maintain trust and transparency:   🔹 Regular Updates: Keep your investors and stakeholders in the loop with consistent and honest updates. Whether the news is good or bad, they deserve to know the state of the business.   🔹 Transparency: Be open about challenges and setbacks. No startup journey is without its bumps, and your backers will appreciate your honesty.   🔹 Respect the Partnership: Remember, the funds you raised are not yours to use as you please. Treat them with the respect and responsibility they deserve.   🔹 Engage in Dialogue: Foster an open line of communication where stakeholders feel heard and valued. Their insights and feedback can be invaluable.   🔹 Accountability: Own up to mistakes and outline your plan to address them. Demonstrating accountability builds credibility and trust.   After all, the foundation of any successful venture is built on trust and mutual respect.   #StartupSuccess #TrustBuilding #EffectiveCommunication #InvestorRelations #Entrepreneurship