Capital raising can be a difficult
task. It comes down to a few important points, including knowing who you're
selling to, and what you're actually selling. Often times, you're selling
yourself. This requires you to be at the top of your game, and to be well
informed about your prospect. It also requires that you listen, ask questions,
and let your target do the talking. Instill trust and assert authority
respectfully.
When raising capital for a hedge
fund, private equity fund, project, or other investment, it is crucial to
adhere to these 3 fundamentals:
- Meet in person as often as possible, and choose your network wisely. Jeffrey Gitomer lesson said that "life is unfair and that is great news to those with friends." It has also been said that in 2 years you will be the result of the 5 closest friends and business friends around you. Keep that in mind as you surround yourself with professional and personal friends. What 2-3 key investor friends would push both your personal development and capital raising to the next level?
- Be persistent, but respectful. Most marketers and capital raisers give up after 2-4 attempts at reaching or selling an investor. Most investments are made after at least 9-12 follow up attempts. Robert Cialdini's work on influence and persuasion shows that after 5-7 attempts you become "familiar" and more influential. It is interesting that psychology shows we can only hold 5-9 pieces of information at a time. It could be that, simply due to mental capacity, we have to form an overall opinion after the first 5-9 touches because we can't store every individual time that we have engaged with that person.
- Constantly improve. Constantly push to the next level of evolution within your marketing materials, marketing knowledge, CRM system, your authority status, and connections. If you are not advancing, you are retrogressing. Make it a point to better yourself every day.
When implementing these three
fundamental points, remember that raising capital is something you will get
better at, and you will find what works for you and your target market. Raising
capital is educational marketing. Your main task is to educate, listen, and
inform. Give away as much information and value as you can. When you come from
a genuine place, those you're attempting to reach and raise capital from can
see that.
Before putting #2 above into
practice, define your target market and get to know all about them. Instead of
choosing to target "doctors", consider targeting "cardiology
surgeons in the US" for an investment you have related to vascular care,
for example. Be specific, and find a niche. Being more specific and more
targeted in who you choose to approach will make your capital raising efforts
more successful.
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