The Right Approach To Your Fundraising And Working With Your Placement Agent

I am sure that all my colleagues placement agents, capital intro experts, and marketers will nod while reading this post.  Many times, during our first conversations with managers and during our on-boarding process, we hear a comment that goes like this: "We would like to work with you, and we would like you to connect us only with your best personal relationships you have with allocators."  

There is a big disconnect between what they are referring to and what actually happens in the fundraising process.   

Let's say we introduce a manager to all allocators-friends we have. Not a problem. Being placement agents, that’s what we do; we build relationships. We all have many of them. However, the introductions to closest relationships we have, do not necessarily lead to an allocation to that manager, or anyone else above and beyond the allocation policy defined by internal investment committees.  

It is not a question of how many personal relationships we have and willing to open the doors to,  but rather whether: 1.) the manager's product and the solutions offered are in demand and attractive to investors. 2.) manager is addressing the right group of investors.  

In recent times, fundraising drastically changed. The elevated due diligence requirements and use of technology made the market a much more competitive place, as we have never seen before in this industry.  

As a fund manager to be successful, you need to do three things: 

1.     Dedicate time and dig deep to take an honest look at where you are adding value as an expert and what your product is good at solving, compared to the solutions offed in the market.  This is where the majority of managers breeze through in their preparation and do not address adequately. 

2.     Master your messaging which will be shared with the prospective investors. Each of the interactions has to add value to the prospect.  Manage well the frequency of your interactions as well. 

3.     Get exposure to the right audience. Get in front of the right group of institutional investors from the start.  There is no need to cover every prospect under the sky but instead, select the target group which you are going to address and build rapport over time.  

In this process, the placement agents can help define and expand that pool of target investors suitable for you; Then, they can contact them on your behalf and facilitate the communication until closing. 

It is a matter of changing the perspective on fundraising and seeing it as a process rather than a transaction. Fundraising is a relationship-driven trade, but only when a manager is prepared for it and willing to build momentum over time.  

I would say, do the required work, and go to the market as soon as you can. Build rapport with investors until they are ready to invest.  Be laser-focused. It will save you time and recourses.   

Related to this subject, there is a great book that I highly recommend: "How Clients Buy" written by  Tom McMakin, Doug Fletcher, available on Amazon and Audible.com 

Natasha B. Koprivica 

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