Why get an expert to raise capital as an emerging managers?
Getting into the investors’ minds and convincing them that your business is a good investment is not easy. It would be best to keep many things in mind while capital raising for emerging managers. For example, you need to ensure that your pitch book is strong enough so that investors don’t get any reason to reject your capital request.
Don’t rely on word of mouth.
When you’re looking for capital raising for emerging managers, investing in a pitch book is recommended. A pitch book is a template that outlines your business plan and strategy for growth. It should include information about the company, its products or services, market potential, history of success and more.
A good pitchbook will help investors understand what makes your firm unique from other businesses in your industry. Your first step when writing the book should be getting feedback from several people—including family members and friends who aren’t afraid to give honest (sometimes brutal) criticism.
It would help if you had a great pitchbook.
Of course, the pitch book isn’t the only place you’ll be raising money. You’ll need to get out there and network with as many investors as possible through personal meetings or email. But while networking is excellent, securing your business funding is not enough.
Having a compelling pitch book is vital if you’re looking for capital from investors willing to put their money on the line in exchange for a piece of your company. A well-written pitch book can help attract investors who believe in your business idea.
The data is in your favor.
There are a lot of emerging managers out there. There were over $100 billion commitments to emerging managers in 2016 alone. That number is expected to grow as long-term investors increasingly seek alternative strategies and products to add diversification and performance to their portfolios.
Emerging managers have seen a surge in popularity because people are looking for ways to avoid more traditional assets that have had significant returns recently (like stocks) but still want exposure to growth markets like private equity and venture capital.
Don’t let a poor pitchbook be your downfall.
Don’t let a poor pitch book be your downfall. One of emerging managers’ most significant mistakes is relying on word of mouth and not correctly spending time creating a professional and comprehensive pitch book.
The data is in your favor: investors are beginning to realize that they need strong data points to make investment decisions, especially when considering new managers with no track record (which is most emerging managers). There are many cases where an investor rejected an investment because they didn’t like one graph or table.
Have more than enough information in your pitch book.
A pitch book should be as big and complete as possible. It should include everything you think investors will want to know about your firm or business, including
- A summary of the manager’s investment strategy
- An overview of the manager’s investment process
- A list of current portfolio holdings
Make sure you’re an investor ready before you get an expert.
It would be best if you were ready to take on the responsibilities of raising capital. You’re likely going to have many people depending on you and your ability to perform, which means you must be able to handle the workload, stress, pressure and responsibility.
Hiring an expert is probably not suitable if you’re not prepared for these things and don’t have experience.
Even if you don’t have an idea for a startup or your business isn’t ready for investment yet; it’s still important to keep your eyes on trends in the industry and know where you might fit into them once you start raising capital. This can help ensure you have enough money when it comes time for your company launch.