Raising Capital during Covid-19

[Fletcher Clardy]

I wanted to shed some light on our current Covid-19 situation and speak to capital raising.

Yes, some companies are at a standstill and some investors and debt firms are not lending with the uncertainty of how long the shutdown will last. However, there are still companies powering through finding ways to make deals happen.

With the protection the government is providing to banks, they are still able to lend as well.

Three key words to remember when raising capital that will help you get started: Relationships, Plan, Deals.

1. Relationships - This industry is based on relationship building and trust.

1. You must establish trust with investors. If you are talking about trust how can I be trustworthy? This is just how to communicate.
   1. You must be sharp, enthusiastic, and an expert in your field. That helps build trust.
   2. Find alternative ways to communicate. Zoom, google hangouts, etc.

1. Know your investor. What is their personality/demeanor? What is their investment criteria?
   1. Alignment of interest is key in all business transactions.
   2. Have patience. Follow-up and add value when you can.

1. Know your investors financial profile. Does your investor even have capital to lend? (Several companies have been exposed for not actually having their own capital due to Covid-19 be sure you are working with lenders who have a sound tract record)

1. Plan – Having a plan is important. It’s the foundation of preparation and objectives that will help you achieve your goals.

1. You want to prepare for those questions’ investors will ask.
   1. Where is the dollar going?
   2. What will the funds be used for?
   3. Where are your sources and uses?
   4. What is your exit?
   5. How will you return our money?

1. “Know everything you can and ask questions until you know everything” There are people who know things you don’t, find those people and align your interests with them.

For real estate investing in a pitch deck clarifies these typical questions to investors. Your pitch deck is your sophisticated and professional presentation highlighting the most important aspects of your investment strategy. (We know our target audience because we have already done all of our research on the investors while we build lifelong relationships)

1. Deals – The best way to start relationships is to bring investors deals that they have expressed interest in.

1. Create a reputation as being a deal magnet. Work hard to attract quality deals and vet them or else you will be wasting the investor’s time and damaging your relationship.

Things to Remember:

Business must continue – Investors have tightened their lending policies, yes. However, they are still lenders in the marketplace. 

Everyone is adjusting –As business slows due to Covid-19, crisis management and response have been critical to develop. Businesses have been working to implement scenario plans that are specific to this crisis and that will maintain the continuity of work. As we shift to remote work, the right technology tools and clear and constant communication are more important than ever.

Prime time to start relationships – The majority of our workforce has been subject to working from home. Although first impressions via zoom or google hangouts is new to most, this is becoming the new normal. Take this opportunity to connect with other like-minded professionals.

[Andy Mirza]

Great advice on investor relationships and getting certain tasks completed!

Our perspective is that most investors seem to be sitting on the sidelines waiting for the markets to stabilize, have their focus on the stock market, or are too busy to consider investing right now. This is evidenced by an abnormal lack of new logins to our investor portal and a lower than normal amount of e-mail and phone inquires about our Funds.

We believe that our country is going through the worst of the coronavirus fear right now as we reach peak new cases. Soon attention will shift to getting the economy restarted. Once investors see that the government and businesses have plans to get going again, markets will stabilize and investors will be ready to invest in alternative investments such as ours again.