When a business is established, it can start producing positive cash flows and profits even in the first year. With time, the business environment may change, causing it to get into financial distress (COVID-19 being a great example of this).
This may make you think of how you can inject capital from outside to revive it? Which usually leads to emotional fundraising.
There is a strong connection between emotions such as anger, frustration, being upset and business performance. This article highlights the reasons why emotional fundraising could be bad for your business’s performance and how to avoid letting your emotions control the show.
Strong emotions can cause you to share your challenges ineffectively
There are various ways of telling a story, whether good or bad. You can engage in face-to-face conversation, create print pieces, or use digital media such as podcasts, videos, and websites. You can also turn to modern technologies such as crowdfunding sites to pitch your business ideas or difficulties to donors.
These methods act as emotional connection tools as they can be used to meet certain goals. If you create these communication tools without paying enough attention to what makes them effective, you may fail to get a positive response from your donors.
According to various business paper writer services, many entrepreneurs consider that promotional media can be created grudgingly and may not be so important. They cannot recognize that it can play a significant role in promoting brands using modern technologies such as social media, event marketing strategies, and emails.
If all your promotional ads are based on emotional fundraising and targeting, that time you spend is taking away from other digital spaces. If you fail to spend time and money producing creative content on your website or other digital space, you limit your chances of creating a strong, reputable brand.
If your business is continuing, you need to prove to your promoters that you are also doing your best to promote your brand, products, or services outside of emotional fundraising.
So remember: design creative communication strategies when fundraising.
The time factor
Being in a state of anger, frustration or any other negative emotion causes you to decrease the chances of raising money.
Expert business writers for essay writing service UK say that you are looking forward to your business to continue operating in the foreseeable future. Therefore, time matters in fundraising. When you are in a state of negative emotions, you feel under pressure to probably pay your suppliers and employees.
The important business stakeholders may pressure you to act faster and accordingly, and because you cannot make informed decisions, you decreased the chances of getting the money. Therefore, you may close the business in the short-run because of a lack of resources.
You may not be aware that emotions may reduce the chances of raising money. Shift your emotions consciously from a negative to a positive state.
So remember: you are competing with other entrepreneurs and therefore, having positive emotions may make the donors see your sense of hopefulness, passion, and commitment to your business to keep moving forward.
Wrong expectations derail performance
The pain of raising money under the state of negative emotions comes from wrong expectations. Your expectations of how much effort and time to get funding may not be aligned with reality. Many entrepreneurs who attempt to raise funds under a state of negative emotions try to estimate the time it would take to raise the money.
For instance, they may expect that it would take, say, three months. While in reality, the process may take six months, depending on the donor. When you have unrealistic expectations, the possibilities of raising money within the desired time and effort will be minimal.
Setting the wrong expectations may cause an overwhelming reality to take you to a further state of anger and frustration and subsequent failure and difficulty. When you don’t get the funding, the business may run deeper into financial distress, which may even cause bankruptcy and insolvency.
You may fail to recognize that there are many other entrepreneurs seeking funding and the due processes must be followed.
So remember: align your expectations and do your research to ensure that you are prepared for what lies ahead in the fundraising efforts. This may help to significantly reduce the pain and negative emotions and the related chances of failure in fundraising.
Poor relationship with the investor or donor
Emotional fundraising can create tension between the entrepreneurs and their relationship with donors and investors.
Sometimes you may not understand the hard truth that some investors can reject your proposal based on many factors. Taking many resources and efforts to build a startup should not be an excuse for you to fail to cultivate a relationship with the investor.
When you are driven by negative feelings and emotions about the business situation, it becomes difficult for you to remain open to your investor’s opinion. You may develop a poorly structured funding proposal that is focused on you getting funding alone.
You may not see the big picture that even if your proposal is rejected, the donor may give you an opinion on how to resolve the business challenges. Many entrepreneurs have failed to cultivate strong and long-lasting relationships with their investors and missed to get business ideas from them.
So remember: the rule of the relationship is to connect with the investors and not their money. This may be difficult to follow, but it helps you to scale up and resolve your financial troubles in the long-run.
Emotional fundraising can hurt your business performance in a big way.
It can cause you to make wrong choices while selecting the methods of communication with your investors. You may also have unrealistic expectations about how long it will take for you to get the money or even focus on the money rather than the relationship with your donor. To promote your business performance effectively, avoid emotional fundraising.
Author: Tobias Foster
Tobias Foster is a journalist and editor with over five years’ work experience working with online news sites and dissertation writing services. His more recent work is for college paper.org reviews. His professional writing and research background gives him an advantage over other academic writers and helps him deliver superior work continuously.