Pitching for Investment: Five Top Tips

Storytelling and financial statistics are crucial if organisations are to take advantage of emerging finance opportunities for social enterprises, according to the team at Foresters Community Finance.  

Finding innovative financial solutions allows people and organisations to lead their own future.

Not for Profit organisations, social enterprises, co-operatives and community-based organisations vary in terms of size, structure and scope. Moreover, some are newly emerged in response to social, environmental or cultural changes, while others have been responding successfully to social, environmental and cultural elements for many years.

However, as the funding landscape changes and sector reform agendas are introduced, organisations who aspire to improve what they do to make a greater positive impact will need to not only understand their specific finance needs but also gain access to appropriate finance to meet their organisational needs and to respond effectively to the issues they seek to address.

There are a range of reasons an organisation may seek finance, including:

• Purchase of physical resources such as IT systems, website development, asset refurbishment
• Implementation of a new fee for service model that leverages the organisation’s existing IP or current capability
• Purchase of space and place that best meets the needs of the services provided
• Increase the existing organisational capacity for service delivery to a greater scale
• Undertaken structural changes, like the development of a new business unit or the establishment of a social enterprise to support its mission.

At the core of these reasons is effective and timely responses to the needs in the community. Finance – or capital – is essential when looking to grow and develop an organisation.

One method of raising the required capital is through loan finance, where social investment capital to invest in community organisations is raised. Increasing numbers of organisations are consulting these kinds of investors about how they can leverage finance to achieve their goals and deliver their mission.

Accessing appropriate finance can be daunting. Yes, it is about the numbers – providing audited financials, cash flows, business cases and sometimes forecast projections on earnings.

While understanding the financial position is obviously critical for an organisation, communicating a picture of the organisation as a whole is also important. Prospective investors will seek to understand the journey the organisation has gone through and the story behind their need for finance. Learning to tell the full story of your business is key in securing the growth capital you need.

To help tell the story and prepare an application for financing, think about the following:

1.  What do you plan on using the funds for? Don’t ignore the story behind the numbers. Having an accurate financial history will demonstrate to lenders that you have put time and energy into your application and you know exactly what the money will go towards.

2. What does your organisational structure look like? If you have a strong governance and an experienced management team, you look more attractive to a lender.

3.  How do you plan on achieving your vision? It is essential to show lenders that you have a well thought out strategic plan behind your business.

4.  Why do you do what you do? Passion is contagious and being able to leverage the ’why’ is a what makes organisations thrive.

5.  How well do you tell your story? There is no harm in sharing the experiences of your community, whether its stories from clients, staff members or stakeholders.

About the author:

Foresters Community Finance is a Community Development Finance Institution (CDFI) that provides finance and investment capital to the community sector. Along with Social Enterprise Finance Australia and Social Ventures Australia they are fund managers for the Social Enterprise Development and Investment Funds (SEDIF) program run in conjunction with the Federal Government which offers finance and support to eligible social enterprises to help them grow their business and increase the impact of their work in their communities.