---------- Forwarded message ----------
From: Theodore OBrien <team@wilsonconferences.com>
Date: Thu, Jul 28, 2016 at 8:34 AM
Subject: Forget about contacting new investors
To: stevescott@techacq.com
Many of the private equity fund managers and independent sponsors that I speak to want to be connected with investors; they want lists of family offices, seed capital providers, or HNW wealth management firms. While accessing more investor contact details may be a useful resource and improve your marketing efforts, it is often not the real constraint that is holding your business back.
No business is perfect; every business has some constraint that, if removed, would help the business more than anything else. Sometimes this constraint is portfolio management expertise, sometimes it is marketing materials, and many times it is lack of institutionalized processes and tools. Seldom do I meet with a private equity fund which, if provided with a long list of 1,000 investors, would explode in assets under management. That's one of the messages I'll be sharing at next month's CapitalCon workshop (http://WilsonConferences.com/CapitalCon) and one I'm sure my fellow 10+ capital raising coaches on stage will identify with: it takes more than just meeting an investor to raise capital.
Most private equity managers do not take the time to write down all of their current business problems or symptoms and ask four "why" questions to identify the root constraint in their business model. A good tool that I have seen used by half a dozen management consulting gurus is the "Four Why Process." If you ask why something is happening four times, you will often get to the root cause of the problem.
Here's an example of how the process is used:
+ Initial problem/symptom: We don't manage $100 million in assets yet. Why?
+ Potential answer and follow-up question: We are not raising capital from wealth management firms as we had hoped. Why?
+ Potential answer and follow-up question: Our marketing materials have not been brought up to speed with the competition's--ours are light and our investment process is poorly described. Why?
+ Potential answer and follow-up question: We know that we should be paying a consultant or in-house marketer to help with both marketing materials and generating relationships, but we have not hired one. Why?
+ Potential answer: We do not have the profits available to hire a full-time marketer, but we can get around to creating a system to share equity, grow relationships with third-party marketers, or build a marketing-related advisory board.
The point of this exercise is to identify what the bottleneck is that is slowing down your growth. If a private equity fund can be seen as a 20-link chain, you must have all 20 strong links in place to keep the business growing long-term. If 19 links can carry the weight of a $300 million fund but one link is only up to par for a $10 million fund, then you will limit your growth and may never reach or only very slowly grow into a $300 million fund. The biggest return for your investment of time and money will be to focus on fixing that one broken or subpar link in your operations, marketing, trading, or internal business processes. Anything else would be a relative waste of money or energy.
This is a unique marketing technique because it is a reminder that the smartest thing you could do for your marketing and sales campaign may have nothing to do with picking up a phone or buying a database of investors. Before spending more money or valuable time, consider the following two tips for improving your ability to attract investors:
1. Use the "Four Why Tool" to drill down deeper into the top five problems that you see your fund facing right now. Oftentimes three to five problems will be symptoms of a single root cause which can be directly addressed.
2. Ask others, including your advisory board, current investors, potential investors and co-workers, what is holding your fund back. Do not settle with two-word surface answers. Try to identify what three to five action steps your fund could take this quarter to improve how you are positioned and address the number one limiting factor in your business.
I hope that this article saves you time and energy as you look to raise more assets under management for your private equity firm. If you'd like consultant-level coaching from myself and 10+ experienced capital raising executives, join me at the Edison Ballroom on August 18th: http://WilsonConferences.com/CapitalCon or call us at (305) 503-9077.
See you next month,
Theodore O'Brien, CPEP
Managing Director
Private Equity Investment Group
(305) 503-9077
328 Crandon Blvd. Suite #223
Key Biscayne, Florida 33149
United States
http://PrivateEquity.com
P.S. Once you've drilled into the Four Why Process and feel you're ready to start connecting with new investor relationships, we have investor databases available at http://FamilyOfficeDatabases.com. You can call Jackie on my team to discuss any of our investor data solutions at (305) 677-3327.
If you no longer wish to receive our emails, click the link below:
https://on119.infusionsoft.com/app/optOut/8/36ecaaef08fcb458/29882234/079717522e7535f5
From: Theodore OBrien <team@wilsonconferences.com>
Date: Thu, Jul 28, 2016 at 8:34 AM
Subject: Forget about contacting new investors
To: stevescott@techacq.com
Many of the private equity fund managers and independent sponsors that I speak to want to be connected with investors; they want lists of family offices, seed capital providers, or HNW wealth management firms. While accessing more investor contact details may be a useful resource and improve your marketing efforts, it is often not the real constraint that is holding your business back.
No business is perfect; every business has some constraint that, if removed, would help the business more than anything else. Sometimes this constraint is portfolio management expertise, sometimes it is marketing materials, and many times it is lack of institutionalized processes and tools. Seldom do I meet with a private equity fund which, if provided with a long list of 1,000 investors, would explode in assets under management. That's one of the messages I'll be sharing at next month's CapitalCon workshop (http://WilsonConferences.com/CapitalCon) and one I'm sure my fellow 10+ capital raising coaches on stage will identify with: it takes more than just meeting an investor to raise capital.
Most private equity managers do not take the time to write down all of their current business problems or symptoms and ask four "why" questions to identify the root constraint in their business model. A good tool that I have seen used by half a dozen management consulting gurus is the "Four Why Process." If you ask why something is happening four times, you will often get to the root cause of the problem.
Here's an example of how the process is used:
+ Initial problem/symptom: We don't manage $100 million in assets yet. Why?
+ Potential answer and follow-up question: We are not raising capital from wealth management firms as we had hoped. Why?
+ Potential answer and follow-up question: Our marketing materials have not been brought up to speed with the competition's--ours are light and our investment process is poorly described. Why?
+ Potential answer and follow-up question: We know that we should be paying a consultant or in-house marketer to help with both marketing materials and generating relationships, but we have not hired one. Why?
+ Potential answer: We do not have the profits available to hire a full-time marketer, but we can get around to creating a system to share equity, grow relationships with third-party marketers, or build a marketing-related advisory board.
The point of this exercise is to identify what the bottleneck is that is slowing down your growth. If a private equity fund can be seen as a 20-link chain, you must have all 20 strong links in place to keep the business growing long-term. If 19 links can carry the weight of a $300 million fund but one link is only up to par for a $10 million fund, then you will limit your growth and may never reach or only very slowly grow into a $300 million fund. The biggest return for your investment of time and money will be to focus on fixing that one broken or subpar link in your operations, marketing, trading, or internal business processes. Anything else would be a relative waste of money or energy.
This is a unique marketing technique because it is a reminder that the smartest thing you could do for your marketing and sales campaign may have nothing to do with picking up a phone or buying a database of investors. Before spending more money or valuable time, consider the following two tips for improving your ability to attract investors:
1. Use the "Four Why Tool" to drill down deeper into the top five problems that you see your fund facing right now. Oftentimes three to five problems will be symptoms of a single root cause which can be directly addressed.
2. Ask others, including your advisory board, current investors, potential investors and co-workers, what is holding your fund back. Do not settle with two-word surface answers. Try to identify what three to five action steps your fund could take this quarter to improve how you are positioned and address the number one limiting factor in your business.
I hope that this article saves you time and energy as you look to raise more assets under management for your private equity firm. If you'd like consultant-level coaching from myself and 10+ experienced capital raising executives, join me at the Edison Ballroom on August 18th: http://WilsonConferences.com/CapitalCon or call us at (305) 503-9077.
See you next month,
Theodore O'Brien, CPEP
Managing Director
Private Equity Investment Group
(305) 503-9077
328 Crandon Blvd. Suite #223
Key Biscayne, Florida 33149
United States
http://PrivateEquity.com
P.S. Once you've drilled into the Four Why Process and feel you're ready to start connecting with new investor relationships, we have investor databases available at http://FamilyOfficeDatabases.com. You can call Jackie on my team to discuss any of our investor data solutions at (305) 677-3327.
If you no longer wish to receive our emails, click the link below:
https://on119.infusionsoft.com/app/optOut/8/36ecaaef08fcb458/29882234/079717522e7535f5
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