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Posted almost 13 years ago

Road Show Success

As fund managers set out to raise capital, one thing they will all have in common is the need to conduct meetings with potential investors to present their fund. In an industry survey taken of LPs and advisors, the majority of those queried rated one-on-one meetings as their preferred method of learning about a company. The vast majority, 87 percent, considered one-on-one conference calls the second best method. Interestingly, fewer than 65 percent favored general conference calls, and fewer than 50 percent liked to use a company website as a primary source of information, although the website is widely used for the initial research of a firm and its managing principals.
 
My article this month will focus on the critical importance of the road show and offer some dos and don'ts to help ensure a successful investor meeting. It is often a part of the overall fund-raising process that is not given its due in terms of critical importance and preparation. And in a challenging fund-raising environment, this lack of preparedness can be costly.  
 
The road show meeting, especially the first one, must be viewed as the tone-setter for the relationship you wish to have with the investor. The age-old saying of not getting a second chance to make a first impression rings very true here. Every aspect of your appearance and demeanor are noticed, even if subconsciously. In the first impressions category, your verbal impression is as important as your physical or visual impression. Your presentations must feature articulate speech, enunciated beautifully and delivered with enthusiasm. This is not something most of us consciously think about, but it is very important.
 
I have been part of both sides of many fund presentations, and am always dumbfounded when the presenter does not bring their "A" game to the table. Going off on long, irrelevant tangents or having disagreements with colleagues on facts and figures in front of the investor are signs of poor execution. You must not only prepare your presentation's charts, graphs and bullet points but also practice presenting them. If you will be co-presenting, always make sure to coordinate on who will cover what and rehearse. You do not want to be talking over one another and you definitely do not want to contradict one another.
 
We are all prone at times to showing our "roots," and if not careful, use such colloquialisms as "yeah" and "yup" instead of "yes" (along with far too many "ums"). Make sure you work on being more conscientious; you may also need to listen to yourself and take a moment to think before you speak. Be succinct and polished and always practice presenting, numerous times if necessary. Make sure you always speak clearly and articulately, keeping in mind that the words you say are also judged by the way you say them. The last thing you want to do is damage your presentation because of poor enunciation and delivery. Consider videotaping yourself and watching it to see how your non-verbal communication is coming across. This is a very helpful excercise.
 
Alec Baldwin said it best in Glengarry Glen Ross, "Always be closing". The one thing to never forget is that the purpose of an investor presentation, first and foremost, is to inspire people to invest in your fund! I highlight this because, believe it or not, this point is often overlooked. Every time you speak, YOU MUST ALWAYS BE CLOSING. Good presentations -- and I mean only those delivered with previously disclosed information and totally above board -- get people to invest. Just be careful to know the line between selling and presenting. The worst scenario is to come off as a pushy, used-car salesman type who is looking to close the deal as quickly as possible. Remember, a potential investor wants to get to know who is running the company and what kind of grit and determination you possess. Don't be afraid to show how committed you are to your vision for the success of your fund!
   
Each meeting provides you with the opportunity to cultivate a new investor. Of course, not everyone is going to invest on your first "date." Most people don't get married impulsively either. Keep in mind that with each meeting you start a courtship process. Ultimately, the result you want is a committed relationship, represented by a long-term commitment to your fund(s).
 
As I have just returned from my brother's wedding and have marriage on the brain, let me conclude with this: The basic underlying expectations for a marriage are similar to those of a good presentation:
 
I want to feel excited.
I want to feel secure.
I want to trust what you are saying.
I want you to always tell me the truth.
I want to know that you deliver on your promises.
I want you to be the best investment for my future security.

Follow these tips and you'll better your chances to securing that capital commitment. Best of luck!


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