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10 Things to Remember When Meeting with Potential Investors

Written by: J. Douglas Newsome | Perkins Fund MarketingEvery manager we work with at Perkins Fund Marketing asks us hundreds of questions during a marketing assignment seeking advice, tips, best practices, etc. The following are just a few helpful tips for managers to consider during fundraising.

Ten Things Managers Should Remember When Meeting with a Potential Investor:

1. You are Asking the Investor for their Money so… Be Prepared! (a) There is no excuse for not being able to answer standard alternative investment questions. (b) Know as much as possible about the investor, beforehand. (c) Be conscious of if and how much political capital may be needed for the investor to commit to your fund. 2. Investors own the Bat and the Ball.Investors expect transparency and some give it – but some may not. A potential Investor may not tell you that: (a) they know your major competitor, (b) they just met with someone who convincingly pitched them the exact opposite idea, or (c) they do not have any fresh capital. Despite a compelling opportunity, some investors will simply waste your time for a myriad of reasons. 3. Ask “How Much Time Do We Haveand what specific ideas/topics/points do you want to make sure we cover in this time?” If you are not considerate and aware, this will be your last meeting. 4. Make your Meetings Interesting.Many Investors take hundreds of meetings each year. Most of their meetings are boring and go nowhere. Make their day and provide a memorable aspect of your opportunity. 5. Keep It Simple. Stupid.If the investor cannot easily repeat your pitch to his/her boss and colleagues, game over. 6. Answer the Question.When a manager takes a long time to answer a question, or does not answer it directly, the investor assumes the manager is lying or unprepared or both. This is unforgivable. 7. Let. the. Investor. Speak.If you are doing all the talking, the meeting will end sooner than later. People (including investors) love to hear themselves speak. And, hey, you may just learn something. 8. Everyone has a “Good First Meeting”.Seriously. Investors are generally polite – even when they think the manager is unimpressive. The goal is to get to the next step. The Investor may finish the meeting by saying they enjoyed the presentation, the strategy is interesting, etc., yet never returns your call again. They generally do this when there is no current interest yet want to retain optionality in case their position changes. 9. End the Meeting with Next Steps.You should wrap up the meeting in a way that the investor can repeat your story. Importantly, however, you should attempt to formalize what you and they will do next. 10. If the Investor likes your pitch, it is just the Beginning.Institutional investors, particularly, will need more information and materials than are needed to understand the strategy and how it fits, etc., but as the carpenter says, “measure twice, cut once”.In summary, be prepared, comprehensive yet concise, aware of the investors’ needs and timetable, and be engaging enough to be memorable. Do these well and you may be off to the start of a long- term relationship.