Spurring Entrepreneurship: The Value of Data

You’ve put your heart and soul into getting your startup off the ground. Now, you’re looking to grow or launch that special initiative which means you’ll look to funders to make it a reality. Communicating with potential funders can be intimidating at first; there’s no doubt about it. But, there is no need to stress out. Navigating the water of fundraising can be eased by preparedness. And, a key asset in the preparation process is data.

Here’s my insight on how to go about doing it.

• Understand the funder

Do your homework! You need to play by the funder’s rules, so make sure you meet the criteria or better yet, surpass it. Realize this, a funder’s criteria is just meeting the basic parameters for them to even consider your start-up. Also, certain funders are more metrics focused than others, case in point the Gates Foundation. Take inspiration from how Trees for the Future, a 25 year-old non-profit adapted to attract funding.

• Choose the smart/insightful metrics

This may be where you make the most difficult choices. In time, you will want to track all aspects of your business, including its operations and impact. You need to keep in mind the more granular the metrics you are trying to collect, the more sophisticated data collection tool you will need. For starters you may want to track net income, number of beneficiaries, number of entrepreneurs supported, operational efficiency etc. Pick metrics you are able to collect and which help you craft the best narrative possible to showcase to funders.

• Ensure consistent data

You need a data collection tool that can track your chosen metrics. Also, you will need a tool that enables you to have high quality data and better yet, data in real-time. Check out a recent piece our CEO, Emily Tucker did on things to consider when choosing a mobile data collection tool.

• Understand what your data means

Examine and study your start-up’s data – this is the narrative of your business story You cannot communicate the value of your company if you don’t understand your data nor will you be able to confidently respond to funder’s questions. Believe me, there will always be questions and plenty of scrutiny.

• Showing beats telling

You’re now all set tell the funder that your startup is the perfect candidate for funding but how are you presenting it? The answer is through visuals. Why, according to research we’re hard-wired to capture and respond to visuals than through our other senses. How you may ask is through dashboards which can show how effective your startup’s business and strategy are doing and provide good insight to funders on the direction your startup is heading in.

Data which allows you to make actionable decisions and effectively communicate to would-be funders will put you and your startup in a good place to secure funding. To learn more about the value of data, email Andrew Herweg at andrew@taroworks.org.