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Coronvirus And Raising Capital

An email came in last week with this question. “How much harder is it to raise capital in a bear market or when the markets are falling due to panic like a Coronavirus?”

I can tell you this.

The savviest investors are not as heavily invested in WS as you might think… and a correction may only validate their portfolio strategy. The largest allocation of their portfolio is in alternatives – typically, commercial real estate. So give them options and creative structures to gain more passive income.

Others are looking to transition into investments with a low correlation to WS. So prepare accordingly. Educate them through the process enough to get them to invest. Over-educate them and they’ll start giving you advice. (I’ve seen this happen over and over again)

In the last two weeks, we have been overwhelmed with an influx of clients. It appears some have been sitting on the sideline waiting for a correction to start raising capital.

When WS contracts it’s smart to be there with an alternative… an alternative that throws off cash.

To answer his question, it is actually easier to raise capital when there’s a mass exodus of the public markets. Target your message to the appropriate prospect.

What questions do you have about raising capital from Accredited Investors?