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Five Small Adjustments With Big Implications For Your Fundraising Game

The path to institutional capital can seem murky at best. With few clear guidelines – and few straightforward success stories – a number of common misconceptions about the fundraising process persist in the market. These notions were revealed in a recent survey designed to challenge GPs’ conventional IR wisdom.

The 250+ fund managers we surveyed worldwide (with KAP Group, an IR consultancy) came predominantly from the middle and lower-middle market. And while fundraising is never a one-size-fits-all exercise, and different circumstances call for different strategies, GPs in a few instances should question prevalent practices that IR experts say may undermine their chances of success.

Here are our key findings from the survey:

Q1: What’s the rule of thumb for the number of meetings you should schedule for every $100 million you hope to raise?

Nine out of 10 GPs saw some sort of formula – that it takes 50, 100 or “as many meetings as possible” to hit their target. The fallacy stems from the stubborn belief that “the more meetings you have, the greater your chances of securing an investment,” as KAP Group’s Erin Roeder puts it.

The better strategy is to focus on quality, not quantity, and prioritize meetings with the highest probability of success. By this approach, managers start with their top 15 or so LP relationships, negotiate key terms, and use those initial commitments as fundraising momentum.

It may sound simple, but not enough GPs have the tools, such as Navatar, to reliably monitor their touchpoints with investors (static Excel sheets no longer cut it) and leverage data analytics to identify their warmest relationships.

The savvier GPs know that LPs who are actively engaged with your emails, events and webinars should be ranked higher than those who do not.

For the full article, which originally appeared on PEHub.com, click here.

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