Start-up Entrepreneurs' Blog

Part 1 – How Sponsorship Can Help Your Start-Up Find Funding

September 6, 2011

For corporation, sponsorship of your event or project is just one aspect of their marketing program.  While we’ve all seen large corporations sponsor major events, even the medium sized companies now are jumping on the bandwagon. Traditionally, sponsorships were the last resort fundraising activity. Today, sponsors have become more sophisticated, and sponsors view it as part of their marketing plan and the sponsee should see it as a joint marketing effort. But wait, there’s more, instead of a win-win relationship, it needs to be a win-win-win among the sponsor, the sponsee, and the target audience. 

Why Sponsors Do It

Every project, team, or event is capable of getting sponsors. Many sponsor seekers make the mistake of believing sponsorship is done so companies can be a “good corporate citizen”. The unfortunate truth is it comes down to profit and return on investment. Studies have shown that consumers value sponsorships highly. They see sponsorships as contributions to the community and a localized way of promoting a business. Consumers are aware that a large number of popular events simply wouldn’t take place without sponsorship.  For corporations, sponsorships offer the chance to directly target and connect with your audience.  When seeking sponsorship, you need to always keep in the mind the value you are providing to the sponsor.

I know a law firm that offers events to discuss various business topics. They have one person dedicated to organizing, managing and finding sponsors. It not only promotes their legal business, but the events are profitable on their own.  As a start-up, what type of event could you hold that would build awareness and promote your start-up?

Searching for the Right Sponsor

Remember, sponsorship is a business proposition. You need to offer value for the sponsor’s investment in marketing. It’s not a donation. For example, you need to know the demographics of your audience. What are their interests? What are their ages?  Sponsors are empirical; they want the facts and figures.

After you’ve worked out the statistics of the target markets for your potential, you need to compile a prospect database of businesses to approach.  Finally, find the right person in your organization who can effectively approach the potential sponsors and sell the benefits of supporting your event or project.

Attracting sponsors is a sales process and like any other sales effort, it can take up to a year and sponsors report spending anywhere between 1–5 hours researching each company that is viewed as a potential prospect for sponsorship.

How Much Can Sponsorship Deals Be Worth

Bloggers are notorious for accepting only products (in-kind sponsorship) when if they would have asked for cash they would have gotten it. For example, if your blog is a lifestyle blog in the mommy blog arena and you have 250,000 captive women reading your blog and interacting with you that’s worth more than a case of free diapers for you to give away. You have to understand that you are offering a sponsor an opportunity to be in front of a captive group of the demographic they target. That’s Huge! Professional sponsorship consultants would have blogger ask for no less than six figures.

Another website with 172,000 annual page views, offers sponsorships on their site for $2,500 to $10,000.

Yet, an online game company offers sponsorship of $3,000 to new game developers.

I’ve seen my local youth sports league can offer sponsorship to local businesses for $1,500 annually and even offer long term sponsorship of the fields of play for 8-10 year contracts and $10,000. Why do sponsors do it? Your local sports league can provide sponsors to thousands of parents and families of fans.

Recently, a new semi-pro sports league is offering sponsorships per game and per season basis that are as high as $200,000. It’s how the new league plans on funding its start.

These days, entrepreneurs think in terms of Google AdSense, when they could be getting far more from sponsors.

Read more on the details on finding a sponsorship in the next post, Part 2 – Preparing for Sponsorship.

Filed under: From Concept to Start-Up,Start Up Funding

Tags: getting sponsorships, how to find sponsors, sponsors as funding, Start Up Funding