Funding Your Values-Based Business: How to Clarify Your Goals and Values in Preparation for Fundraising With proper fundraising planning, you will reap positive outcomes and ensure your business continues to be a source of pride and joy for years to come.

By Jenny Kassan

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

I hate seeing passionate business owners raise money in a way that doesn't allow them to stay true to what's important to them — but unfortunately, I've seen it happen many times. Part of this is due to the lack of information about the options. Part of it is due to business owners not investing the time it takes to get clear on their goals to ensure the business and its investors are fundamentally aligned.

When people talk about business fundraising, it often focuses on just one path — the grow-fast-and-sell venture capital model. So when most business owners think about raising money, they start down that well-worn path, not realizing others are available. They default to putting investors' demands for a "market rate" return ahead of everything else and giving the investors all of the power.

When you raise money within the venture capital model, you are at their mercy — the investors dictate the terms of the investment (you must make them at least ten times their investment through an exit event that happens as quickly as possible).

Related: How To Raise Capital For A New Business Idea


Frankly, this is often a recipe for disaster. Most businesses that receive this type of investment don't meet the investors' expectations and get left behind on the ash heap of VC-backed failures. And those that do "succeed" by achieving a large and fast exit often leave the original founders and their mission far behind when the investors decide it's time for different leadership.

The good news is this: There are many ways to raise money that let you stay in control of your business and align with your values. The first crucial step to success is getting clear on your goals and values before even looking for investors. Doing this foundational work will enable you to design a fundraising strategy that will work for you, your business — and your investors.

Related: 6 Steps to Finding the Right Investors for Your Business

Get grounded in your values

If you look into startup fundraising, you quickly get the message that if you don't want to be on the venture capital path, your business is less legitimate — it's like, "oh, isn't that cute?" I can't tell you how often I've heard from VC-style investors, "Oh, so you're a 'lifestyle' business — and of course, there's nothing wrong with that!" Yet the dismissive way these words are spoken makes it clear that they are not interested in further conversation.

But I've seen many clients grow quite large and successful and pay good returns to their investors without being on the venture capital path. In fact, only 6% of the largest companies in the United States raise money on the venture capital model. The rest of our country's businesses grow in other ways, including getting investment capital from values-aligned funders.

The value of diverse funding models isn't just about ensuring that individual entrepreneurs are happy. It's also about building a healthy economy. If everyone were raising money in the exact same way on the venture capital path, the business landscape would become a monoculture — every business would be a tech startup with the potential to grow a minimum of 10 times in five to seven years and get sold to a larger corporation. If that were all we had in our economy, we would be screwed. For a healthy, thriving economy, we need diversity.

Of course, we also want individual entrepreneurs to do the things that make them feel alive and allow them to share their gifts in the most fulfilling ways. That's why it's so important for founders to get clear on what's important to them rather than listen to anyone else's definition of success. In my experience, when founders take the opportunity to ground themselves in their values, they develop a deep and clear understanding of what they have to offer investors. That's an exciting starting place for fundraising.

Starting from this point puts you in a much better position to quickly identify the right investors and weed out the wrong ones. Let's say you're a hyperlocal business, and your first objective is to meaningfully contribute to your community and support all of the things that come with a strong local economy, like good-paying jobs, high-quality services and educational opportunities. If you know you're deeply focused on building that kind of a business, you will be in a much better position to explain to people in your community what you're doing and invite them along for the ride so that they can invest in alignment with their values. By being loud and proud about your goals and values, instead of trying to fit into the VC mold, you'll naturally attract the right investors and repel ones that would not have been a good fit.

Related: How to Raise Money Without Lying

How to clarify your goals

For all of these reasons, developing clarity on your goals and values is essential ahead of any investor conversations. The clearer you are with yourself, the easier it'll be to stay super focused while raising funding because you'll know precisely what you are looking for — and what you're not — so you can avoid the bright, shiny objects that really aren't good opportunities for you.

Here are a few basic questions to ask yourself to begin getting clear on your goals. Consider writing out your answers and then narrowing them down and prioritizing them:

  • What is my "why"? Why am I in business in the first place? What excites me and keeps me going?
  • What's my unique offering? What sets me apart from others in my space?
  • Who do I want to serve? Who is my customer, and what do they need from me?
  • Where am I heading? Where do I see the business in five years? In 10 years? What will the business look like when it has reached its ideal state?

Next, take some time to list your non-negotiables — things you are unwilling to sacrifice to get funding. I help my clients think about their non-negotiables like this: If someone walked up to you with a million-dollar check wanting to invest in your business, what about that investment would make you say no to the money? For one entrepreneur I know, a non-negotiable is that she wants her business to remain Black-owned. So she would never sell to a large beverage corporation.

Some other examples of non-negotiables may include: I never want my business to get in the way of spending quality time with my family; I don't want to be pressured to sell my business to the wrong buyer; I will never do business with suppliers that use slave labor or maintain dangerous working conditions; I will always donate 10% of my profits to charity; or I will never use ingredients I couldn't find in my grandmother's kitchen.

That leads to another important factor to consider: What happens when you're ready to move on? Of course, there's the "exit strategy" venture capital style investors want — where you sell your company to a larger corporation or IPO. But that's not the only way for you or your investors to exit.

Related: The How-To: Building An Exit Strategy For Your Business (Even Before You Start)


The first thing to consider is whether you see an exit from the business in the future. You may not. My business, for example, is a service business with my name in the title. Chances are, the business will end when I retire — for other people, growing a business to a point where someone else would want to buy it is a goal. Or maybe you want to leave the business to your children or sell it to your employees. Looking ahead to whether, how, and when you'd like to exit the business is an important part of your planning. If a fast sale of your business is not something you want, don't worry! Many businesses never have a founder exit and have very happy investors. Exits are not necessary for investors to get paid.

Related: Is Bank or Investor Funding Right For Your Business?

Design your fundraising roadmap

Once you've clarified your goals and values, it's time to design the fundraising roadmap you'll use to get on the right fundraising path for you. A funding roadmap is a clear strategic plan for how you'll reach your fundraising goals.

A good roadmap should include the investment offering details, the type of investors you are targeting, and what they are looking for. The right investors will have goals and values that are aligned with those of you and your business. This values alignment is an essential part of your offering. For example, for the right investor, your list of non-negotiables will not be a set of hurdles to overcome but an aligned list of fundamental values that strengthen your offering and demonstrate your dedication to your values.

You will also need to understand the related legal issues, such as securities compliance options, entity structure and founder equity. As a lawyer, I will tell you: This is where you need a lawyer! A qualified lawyer can help you create a term sheet describing your investment (you may decide to prepare more than one type of offering) and provide legal guidance around talking to potential investors without breaking the law. Finally, your funding roadmap should include a timeline and implementation budget.

This may all sound like a lot to consider, but getting clear on your goals and values is really about planting the seeds of success. Everything we do in our businesses is about planting seeds for the future — be sure you're planting seeds that will yield the harvest you're hoping for. It takes time, money, creativity, and the right expertise to do things right. But with proper planning, you will reap the positive outcomes and ensure your business continues to be a source of pride and joy for years to come.

Jenny Kassan

Founder of The Kassan Group

Jenny Kassan has over 25 years of experience as an attorney and advisor for mission-driven enterprises. Jenny’s legal practice, The Kassan Group, provides legal services, coaching, and consulting for mission-driven companies, investors, and intermediaries.

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