Time for Significance is Now ...
Art by Ricardo Gomez Angel @ Unsplash
In the midst of uncertainty and turbulence, opportunity for significance arises ...
"Never let a good crisis go to waste" - Winston Churchill
We first and foremost hope that you and your colleagues, friends and families are weathering this crisis safely. We shall see it through together, and our team is available to support you to the best of its abilities - Reach Out ! (we have opened additional slots inside our free Discovery Sessions series, check out details at bottom of this post).
We come to you this time with yet a new experiment, a different approach and format for our April Newsletter (by the way, we skipped the March issue). The reason for this pivot is that we have received and continue to get a deluge of inquiries from our clients and community members about "what we think the perspectives of pursuing a Fundraising Campaign might be in the current economy and how to go about it now"? And have been doing significant amount of work to address their concerns; thus we thought we might as well focus on this topic with a particular emphasis on the concerns of our Alternative AM (PE/VC) and Impact Entrepreneurs; for the purpose of this issue.
How does significance inform and transform the fundraising path and contribute to building a desirable future - might we ask ?
Because of the work we do in the area of capital raising for private companies and alternative asset managers (AM) and in particular in the Impact space, we have been consistently approached about our opinion on whether Fundraising - in the midst of the Covid-19 crisis on onward - may still be an option for asset managers or entrepreneurs to consider; in order to grow their assets or businesses ...
Since I unfortunately lost my crystal ball recently, my only option is to share the insights I have gathered from participating in the market from my observer and practitioner position.
Let me start with a few words inspired by years of experience: fund raising is an appropriate funding solution, in certain cases only, some companies and asset managers (have historically and) are currently raising financing rounds successfully, as I write, others were not successful before the crisis hit and won't succeed this time around either ... and every other potential outcome in-between can materialize as well.
Fundraising is by essence a creative venture that needs to find its product-market fit and therefore entails risk-taking, iterating/pivoting models (integrating feedback loops & real time learnings) and orchestrating the timely convergence of a number of evolving conditions and metrics that make the entire process highly unpredictable if not carefully designed, prepared and executed.
In order to shed some light about the collective knowledge emerging from the current research field, conversations and actions taking place in the investment, fundraising and entrepreneurial communities, I share a recap of the insights, perspectives and actions taken I have been able to witness and aggregate (obviously biased towards my personal practice, here particularly focused on Alternative Asset Managers) as well as some of their sources :
Fundraising is a numbers game (expect 90% of refusals minimum) and should take longer than usual, in the current environment - with the most used word by executives on earnings calls to describe the current situation, in the last month, being "unprecedented" (source : CB Insights)
Asset Managers' Job is to manage their AM business, invest and monitor/support their existing positions (portfolio), gearing towards profitable exits. AM still have dry-powder globally speaking to deploy and allocate and whilst some may take advantage of the current crisis to acquire assets at favorable valuations, others on the contrary may struggle to provide further liquidity to their portfolios and have to turn to alternative funding solutions to support their portfolios (market solutions exist & conditions apply). The investment community is opened for business; with each operator implementing its own agenda, policies, calendar and strategy, at its own pace and according to its specific set of constraints
Investors (LPs & GPs) need to factor-in current and forward-looking external as well as internal (operational) conditions in their investment decisions which will obviously impact the due diligence and valuation processes and standards. Increasing levels of scrutiny and investor discipline will probably be the new-norm. Opportunities that solve immediate problems/pain points will likely attract investor attention faster than the rest.
Fundamentals of "value creation" such as - exhibiting differentiated thought-leadership (relevant/actionable content) concerning investment themes eligible for consideration by a given investor, showcasing track record & team/talent achievements as well as insightful, timely and mindful communication, developing brand and relationship building strategies - remain key in designing and nurturing sustainable engagement strategies with investors and their gate-keepers
Most successful assets managers are increasingly taking a marketing-led approach to their business development efforts which include Fundraising (pre-marketing, marketing, data management, communication and brand are key)
Fundraising will rely increasingly on mastering digital/virtual marketing and business management strategies, data science, as well as tools that enable trust & relationship building and network, due diligence, reporting and support the Fundraising and Investor Relations spectrum at large. Even though in person meetings are obviously key and will resume at some point
Resources
Videos, Interviews & Webinars
Privcap: Investor relations in the time of coronavirus
PE Insights Webinar: Is The Corona Virus The Black Swan of 2020 - navigating the current PE market
Chestnut Advisory:
Maintaining Investor Trust Through The Crisis
OCIO Report From The Front: David Eisenberg of Cambridge Associates
Effective Institutional Marketing
ProFundCom:
5 Marketing Trends that will help you boost AUM
Winners and Losers in Digital Marketing This Decade - Brand, Trust and Data Science
Getting the most out of marketing automation in finance
Real Deals : The Best Defense is a good Offense
Duke University - The Fuqua School of Business : Managing Impact Investment Fundraising During COVID19
7 Strategies to Leverage The Family Office Investor Club and Raise More Capital
NfX : The Great Reset: How Reid Hoffman & James Currier See the Path Ahead for Founders
Papers & Articles
Placement agent Eaton Partners, a subsidiary of Stifel Financial, has completed a survey that reveals an overwhelming majority of institutional investors (64%) are making no changes at this time to their private market allocations despite dislocations caused by the coronavirus crisis. In fact, some institutions (15%) are increasing allocations.
Chestnut Advisory :
Thought Leadership
ProFundCom :
The ProFundCom Guide To Effective Thought Leadership Content
More Great Campaigns To Inspire Your Fund Marketing
PEI Study - How will Covid-19 affect GPs
MJ Hudson - Private equity funds post crisis: 8 key trends
Chief Investment Officer - OCIO Roundtable : With due diligence limited, thought leaders from leading OCIO firms discuss their processes for navigating after the coronavirus crash
CFA Institute investor trust 2020 study : How the Desire for Information, Innovation, and Influence Is Shaping Client Relationships
PitchBook
Investors are cautious on private markets during shutdowns, PitchBook survey shows
In the trenches: How venture funds act and perform in times of crisis
NfX :
Why Startups that Survive are “Learning Organizations”
The VC & Founder Sentiment Survey
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Information about the usual favorite topics of our early-stage entrepreneurs and career-transitioning intra-preneurs is curated on our Facebook and Twitter and Linked In accounts - Follow us ! We diligently scout the most singular and valuable pieces of information & tips from our networks and carefully piece the data together so as to deliver the exclusive insights our members are looking for. Check us out regularly as we put up new relevant and time sensitive content daily. Our ever-green free content is full of insights & opportunities, including the resources located in our Free Library.
Given the current circumstances,we opened additional slots inside our "Entrepreneurial Iteration To Awesome Method"- Discovery Sessions series to support our community. Because our coaching method is based on a holistic approach, we are able to provide assistance around topics such as:
Social distancing and remote work management
Job loss/layoffs, job search, professional transitions and reorientation, identifying employment protection plans available
Pivoting and/or adapting business models in real time - contingency & continuity
Identifying alternative financing/liquidity options other than additional draw-downs (including relief programs) & Managing Cash Flow situations
Marketing & selling mindfully
Keeping healthy, productive & focused
Stabilizing & boosting Mindset and envisioning the future
Leading in unexpected Hyper-Growth situations and operating under exponential pressure on business and people