HOW TO FIND WEALTHY INVESTORS
Hopefully since reading “Where can I find investors?”, you’ve started taking action and building momentum towards establishing your investors network. Once your confidence identifying and communicating with potential investors increases, consider focusing your efforts on connecting with high net-worth individuals. Generally speaking, high net-worth (HNW) investors are those with at least one million available in liquid assets. Although they may seem elusive, HNW don’t walk on water or eat off of gold plates, and can become part of your network with some calculated effort. Understanding the mindset and motivation of HNW investors will greatly increase your chances of identifying and connecting with them, ideally as a partner in your next syndication.
1. The “typical” HNW investor
You’ll be hard-pressed to find two identical HNW investors, but it is worth noting the common characteristics among them. Initially, you might believe there to be a positive correlation between one’s financial assets and his or her willingness to invest, but that could not be farther from the truth. HNW investors are largely self-made and did not accrue such wealth by agreeing to every deal that came across their desk (if you’re skeptical, just watch an episode of Shark Tank!). A nationwide study of 684 HNW investors revealed that most of their wealth had been accumulated through a “basic, long-term approach” and that their investment choices became more sophisticated over time.
As a result, HNW individuals are generally more patient and disciplined regarding their investment decisions, and typically put more emphasis on establishing trust with you and analyzing your offering. Be aware that a HNW is assessing the deal’s feasibility and your proficiency, but don’t make that your focus. Instead, create an open and honest dialogue with prospective investors to uncover their needs, answer their questions, and communicate your plans and long term strategy. It may feel vulnerable to ask questions such as, “What does a successful relationship between us look like to you?” and “How will you know if I’m doing my job well?”, but they can be instrumental in giving you the responses to build a solid foundation.
2. Be in the right place, at the right time
Meeting HNW individuals is all about being in the right place at the right time, and while the timing may be challenging to predict, the place is not. Remember the last time you misplaced something and asked yourself, “If I were a ___, where would I be?” Getting in front of HNW is not much different (and no, we’re not referring to presentations or formal meetings). Begin by thinking of the different motivations a HNW individual might have to attend an event or belong to an organization. Some of the most common reasons include: business development, philanthropic fulfillment, and recreational activity; often, a HNW individual can meet multiple needs in the same place and time. For example, a HNW individual who belongs to a country club may have joined initially for access to a golf course or tennis league, but as a result of creating relationships with other members, is now conducting business with them. A HNW seeking to expand his or her business network might regularly attend business breakfasts or Rotary Club meetings. Those seeking to meet a philanthropic mission may serve on the board of a charity or two or coordinate fundraisers on a regular basis. Of course, some may also attend real estate events with the intention of investing in a syndication!
As you brainstorm places and organizations where you can increase your chances of meeting HNW investors, remember that you might already have them in your network without even knowing it… yet. There is a good chance that you are already directly or indirectly connected with someone who has a high net-worth, so it is important to share a consistent and reputable message with all of your current and potential investors. You never know where or how you will meet your next investor!
3. Fake it til you make it
Whether attending your first gala or joining the board of directors at a local charity, you may begin wondering whether you’ll fit in, or worse, worried that “they” will know you’re not “one of them.” As you pursue opportunities to meet HNW individuals, remember that they are people too. Instead of worrying about what could go wrong, be yourself, be professional, be authentic. Act naturally, as if you’ve been there before… in other words, fake it til you make it!
Although you may not have previously interacted with many HNW individuals, it will be much easier to promote conversation if you attend an event or join an organization in which you have a genuine interest. Instead of promoting yourself and your business, allow yourself to enjoy the experience and seek to connect with others based off of shared interests. Not only will this allow you to create more genuine relationships, it will also emphasize your authenticity.
4. You’re an average of five people around you
Consciously or not, it is believed that our behaviors and thoughts are influenced by the five people with whom we spend the most time. As previously discussed, HNW investors share a unique set of qualities based on their experiences and achievements. In an effort to be better connected and more relatable to the wealthy, being intentional about who you spend your time with matters. Are the five people closest to you inspiring you to become the type of person you want to be or are they holding you back? How could you benefit from spending more time with affluent members of your community? What if a HNW individual eventually became one of your ‘Top Five’? Attracting the wealthy into your network begins with a mindset shift, but we cannot become what we cannot see.
Connecting with HNW investors is possible and within your control. Even if you don’t think you know of any right now, there is likely at least one HNW individual in your life. Uncovering and connecting with these individuals begins with the belief that you are capable of earning their business. Intentional action will increase your chances of meeting HNW investors and being yourself will allow you to build meaningful, authentic relationships. Don’t underestimate the power of networking - you never know where or how you will meet your next investor.