Moreso than not, most new clients are making this mistake.
Overwhelming potential investors.
Accredited investors are intentionally time-poor.
They will not waste their time sitting through unannounced presentations, reviewing extensive documents and collateral, or accepting unnecessary phone calls.
The most admired attribute of high net worth individuals (HNWIs) is their ability to say no. In my experience, they say no ten times for each yes, so if you have something important to say, say it quickly and concisely.
Understand that HNWIs are as protective of their time as they are of their portfolio. Don’t start the relationship by sending them a 95-page private placement memorandum or your pitch deck to review.
Build a process with intrigue so they ask you for more information, a meeting or a phone call.
Overwhelming them with information will only result in them giving you a no or no response.
In my experience, accredited investors are most interested in the following aspects of your deal: the story, the market served, the asset segment, the exit strategy, and you/team.
Start with only the minimum information. Offering a one-page summary or term sheet is a good initial step.
Don’t sell the investment on the initial content.
Sell the next step.
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Matt Scott is CEO/Founder of 7xCapital which specializes in private capital markets with a focus on raising capital from Accredited Investors. They guide companies through the labyrinth of the private capital world by applying proprietary processes and systems to target this elusive but prized segment of investors. Matt and his clients have raised over $500M. Along with his 14-person team, they provide execution and back office support to entrepreneurs for managing customized strategic systems for raising private capital. The 7x team currently serves clients in the U.S., Canada, Dubai, Israel, Finland, and Central America.
Matt is a speaker, advisor, and investor. Conferences and industry groups often invite him to speak at their events to educate and inform their audience on the latest strategies for appealing to the Accredited Investor. Matt has the credentials to back up his processes. He is an active investor in the alternative asset class with 25 years of experience of starting, capitalizing, operating and selling companies in the private sector. Matt has solved many of the issues and challenges in targeting the Accredited Investor and continues to stay on top of trends to develop new and effective strategies for raising capital.