Are you the Right Funder?

Before getting involved in a start-up, it is important to ask yourself whether there is a good fit between the scale and scope of the new organization and the knowledge and resources you as grantmaker bring to the table. A workforce development funder at a national foundation succinctly advises, “Don’t go around championing the creation of a new organization you have no hope of being able to support meaningfully.” He also emphasizes the importance of having good firsthand knowledge of local needs, based on time spent in the community: “I’ve seen local start-up efforts I supported wither, in part because I didn’t have the local presence and intelligence to manage the start-up process, or to even know if the start-up was needed in the first place.”

As you think about scale and scope issues, you might ask yourself:

  • Am I prepared to commit enough resources — both financial and human — to ensure the start-up’s success?
  • Do I have enough connection to the new organization’s field and geographic area to be able to rally resources for it?
  • Do I have enough connection to the institutions, community, and people the start-up is supposed to serve to know that they will want what it offers?
  • Is there a viable exit plan for my grantmaking, or at least a strategy to bring my support down to a level that I can sustain indefinitely?
  • Are the demands of supporting a start-up consistent with my own organization’s operating style, institutional culture, and willingness to tolerate risk?

Takeaways are critical, bite-sized resources either excerpted from our guides or written by Candid Learning for Funders using the guide's research data or themes post-publication. Attribution is given if the takeaway is a quotation.

This takeaway was derived from Working with Start-Ups.