Why Facebook’s Algorithm Is Working Against Your Capital Raising Efforts

Everyone raising capital is aware of the power of Facebook advertising. With its precision targeting and massive user base, the platform has become a go-to for promoting all sorts of offerings, including investments and capital raises.

In past articles, I mentioned why most funds, syndicators, and startups use the FaceBook platform. It’s easy. It feels good (like you’re doing something productive). Every agency promotes it because it’s easy money for them. And finally, because it’s sold as the holy grail, but it’s far from it.

But here’s the harsh reality:  relying solely on Facebook for your investor acquisition is a recipe for limited growth and frustration. Why? Because the algorithm that powers Facebook’s ad delivery is actively working against you.

Let me explain…

Raising Capital On Facebook…

When someone views one of your Facebook ads promoting your investment opportunity, the algorithm takes no time. It says to itself, “Aha, this person is interested in investments!” From that point forward, it will mercilessly promote to that individual with every other investment ad.

Your campaign and ads get lumped in with all the others to create more noise and competition for attention. The person becomes numb to the onslaught of promotions, or worse, they begin requesting information from every opportunity to invest in an ad that Facebook promotes. Now, their inbox and phone are constipated with ads from multiple capital raisers trying to get them on a call or book a meeting.

This isn’t just theory; I hear it play out countless times from new clients begging for a change. An initially promising Facebook campaign hits a wall and leads dry up, all because the platform’s algorithm has essentially marked your ideal prospects and saturated them with investment content.

As you know, once you look at one new ad or post, Facebook has put a lock on you, and you’ll never get beyond their grasp. This is why the majority of the leads end up ghosting you, or they are not qualified (not accredited). Because your competitors and all the capital raisers are after the same prospects.

So, what are you supposed to do? 

Fixes for Advertising on Facebook for Investors…

The solution is shockingly simple:  You must fight algorithms and go against the grain.

First, by marketing completely differently than anyone using Facebook and Instagram ads. We have a strategy of running direct and indirect ads that work. Try running 4 to 8 ads at a time with different offers and looks.

Test static ads against video ads. We’ve found most video ads are dragging, not due to the graphics or video quality, but the script (saving this for a future article). Most scripts are not even targeting the true benefit you’re offering, and many are discussing their competition. 

Next, take a more comprehensive, multichannel approach that avoids the pitfalls of relying on a single platform’s algorithm. Start by exploring other digital channels beyond Facebook. Offline and online channels are plentiful, and many are untouched by capital raisers.

But perhaps even more importantly, don’t neglect the incredible power of in-person outreach and marketing.

Local marketing, developing strategic partnerships, and building relationships are all channels that keep you on top of the mind with prospects in a much more personal and memorable way.

Direct mail has proven incredibly powerful. When most of your competitors are going all-in on automated digital with Facebook ads, move to channels where you’re beyond your competitors’ reach. Highly-targeted direct mail campaigns generate higher conversion rates and responses.

Looking Beyond Facebook as Your Sole Source of Accredited Investors…

Try marketing outside of the Facebook platform, where you can capture the prospective investor’s attention. 99% of other channels are not going to offer your competitor’s ads a few scrolls down from your ad.

The point is, by expanding beyond the reach of Facebook and diversifying your investor marketing across channels, you avoid becoming just another victim of the algorithm’s insatiable appetite for monetization. You stand out from the endless noise and fatigue bombarding your prospects everywhere they look online.

Most crucially, you put the human element back into your capital-raising efforts. You engage people through multiple touchpoints, building rapport, credibility, and trust in a way that simply isn’t possible through the anonymous, one-sided dynamics of social media advertising.

For some clients, Facebook advertising deserves a seat at the table in their investment marketing mix, but many can avoid it and raise capital without it even more effectively. The platform’s targeting capabilities and AI can be an incredibly cost-effective way to get your offerings in front of a lot of eyeballs. But it’s also going to promote every well-known ‘online personality’ or ‘guru’ raising capital along with yours, and when those ‘gurus’ are pumping out 20 to 30 videos and posts a day, the climb gets tough.

A multichannel effort geared towards building genuine connections and lasting rapport with prospective investors is the right game. Because at the end of the day, people invest with people they know, like, and trust – not with the aimless algorithms that power the ad-saturated depths of social media.

Seek out other marketing channels and tactics. Go local. Find unused channels that your competitors are not using. Go against what everyone else is doing in terms of ads, copy, sales processes, and channels. Think like a modern-day Don Draper and find compelling ways to connect in the real world beyond the addictive scroll of the Facebook feed.

That’s how you’ll avoid being just another forgettable investment ad drowned out by the algorithm’s zeal for showing more of the same old to your prospects.

Resist the temptation of following the herd down the comfortable, well-trodden path of Facebook ads as the be-all, end-all capital-raising solution. Blaze a new trail through inventive marketing and authentic relationship-building. Because when you expand beyond the algorithm’s limited horizons, that’s when you’ll truly be able to maximize your efforts and get more attention from the right investors.

When your strategy isn’t working, ask yourself:

-Why am I marketing on this platform?

-Do my ads look and sound like everyone else?

-Is it working well?

-Are you achieving your milestones?

If not, maybe it’s time to reconsider your outreach efforts.

Matt Scott
Matt Scott
Matt Scott is a seasoned expert in the private capital markets, specializing in raising funds from accredited investors. With over two decades of experience in starting, capitalizing, operating, and exiting private companies, he guides entrepreneurs through the intricate landscape of private capital raising. Leveraging proprietary processes and systems, Matt and his team have successfully facilitated over $1 billion in capital raises for their clients. At 7x, Matt and his team provide comprehensive execution and back-office support, tailoring strategic systems to meet the unique needs of each entrepreneur on their journey to secure private capital. Their client base spans the United States, Canada, Dubai, Israel, Finland, and Central America, underscoring their global reach and expertise.