There is no magic bullet to load into your mystical Colt 45 when it comes to raising capital. It doesn’t exist. Merely having a deal under contract properly underwritten, or not, and hosting it on a syndication platform will never guarantee you the capital. You have to participate hour-by-hour and minute-by-minute. This is a full time endeavor. No short-cuts.
Now, assuming you have done your homework properly and have underwritten this offering accordingly with real world assumptions, market viability, downside risk adjusted and reasonable upside probabilities, it’s time to begin the process.
First, understand your experience as a sponsor is as important as the asset itself. Investors need to feel comfortable with your capabilities and historic successes. Carefully craft your bio knowing that strangers will be reviewing it with a critical eye toward finding a reason not to invest. They are always looking for a reason not to invest. Don’t give them the opportunity.
Next, balance your deal’s risk versus reward. Is your experience, track record and offering a solid proposition with little downside or is it a cannabis start-up? Hopefully, you understand the disparity. Adjust your ROI metrics to balance the risk of the offering with the security of the capital investment.
Now you’re ready to begin raising capital. Find a platform like Madison Avenue Technology to create, and track, your digital offering: Landing Page, Pitch Deck and PPM. If you’re going to advertise, make sure you are Reg D 506(c) compliant. This is the fastest, easiest and least expensive way to market your deal. With a digital Landing Page in-hand, it’s go-time for reaching out to prospective investors. FYI, plan for a 90 day process and prepare your budget accordingly. Remember, advertising doesn’t cost you money, it makes you money. Budget for it.
- Understand we live in a digital world. Take full advantage of it. You can cover months of traditional marketing in a single day if you know where to go. Maximize social media far beyond posting on Facebook. There are sites like BigLinker for example that can fill your investor pipeline. A simple inexpensive app that maximizes your LinkedIn contacts with drip campaigns. There are dozens of force-multipliers out there. Find one that works for you.
- Use resources like Upwork to hire a content writer. They’re quick, experienced and inexpensive. Have a blog written about your specific industry or geo-centric deal with a live url leading readers to your Landing Page. Make sure the Landing Page or Deck has a way to capture their contact info. Consider DocSend to “gate” the Pitch Deck with a CA.
- Find a credible emailing resource to “rent” a list of High-Net-Worth prospective investors geo-centric to your offering. Investors that recognize your offering or its future location are more likely to invest in your proposition than an outsider. FYI…renting a list minimizes the Spam issues and puts that responsibility squarely on the shoulders of the emailing company. But the company needs to be highly competent and accountable for Opt-Ins. Likewise, “mine” investors specific to your filters through PitchBook or other similar platforms, and if accessible, purchase only that list.
- Use video whenever possible. Put a face with a name. The more dynamic the better. Make yourself always available to discuss the deal one-on-one. Zoom is a great tool. Offer live chat boxes, direct mail addresses or phone numbers. Field these calls yourself. Everyone want to speak with the Principal.
- Follow-up, follow-up, follow-up. Hot, cold, warm leads. Follow-up. There are apps like Clickback, Zoho or Active Campaign that follow-up cold leads for you with digital marketing drip campaigns. Take advantage of these tools.
- Join Family Office Groups. They have hundreds of institutional-style investors that they make available to their members. These are Golden lists that are there for the taking.
- There are lead generation companies that specifically work with 506(c) offerings. These are omnichannel sales funnel experts that are specifically designed to generate accredited investor leads. They’re inexpensive yet dependable.
- Google Broker Dealers and find one centric to your industry. Reach out to them and discover their appetite. Keep reaching out until you find one hungry enough to take on your deal. It’s a function of your underwriting and their appetite for fees.
In conclusion, there is no magic in raising capital. You have to dial for dollars. Use digital technology to your advantage. License a white label syndication platform like Madison Avenue Technology to create your online offering. If you have a network, use it. Use Zoom meetings, webinars, videos, anything to drive traffic to your digital offering. If you’re in a small community, find a local digital marketer. They’ll know how to get the list of local members to the country club. Think outside the box and you’ll be just fine.