Want More Investment Capital? Improve Your Brand. Here's How.
My partners at FocusedBrands (focusedbrands.marketing) and I wrote a piece on branding for the Private Equity and Venture Capital communities. We have collaborated to help Private Equity and Venture Capital Funds position their brands for better visibility and engagement with the investor community.
Proper investment and brand positioning is so important in today’s investing marketplace. The marketplace is crowded with opportunities all clamoring for investor attention. This is why our services have been in such high demand with this community. While this article is primarily directed toward the PE and VC communities, it is also applicable to growth stage companies that also need to raise investment capital - potentially even more so.
Improve the Brand First, Capital Will Follow
In the private equity and venture capital industries, most funds look at branding in the same way that cattle look at branding. A massively painful event that must be endured once, but once completed, lasts forever and never has to be repeated. After all, branding is for shoes, soap, and wealth management advisors. Branding is certainly not for a team of high-powered, well-educated investors, right?
That is no longer the case.
In the current investment environment, there is extreme competition for potential limited partner investment capital. Limited partners have choices when it comes to successful investment funds—many, many choices. Performance alone no longer wins. Performance AND a strong brand are what wins.
Let’s talk about successful branding.
Apple has a stellar brand. However, the Apple brand is not just the color of its computers or the cute apple logo. Apple’s brand goes much deeper. Apple is an emotional feeling. Apple is an expectation of excellence. That expectation carries through the website, the store, the chat-bot, the packaging…and of course, the product. A strong brand builds trust with every touchpoint.
Nike has a globally-recognized, iconic logo that took them over 50 years to build and grow. However, Nike’s brand is not just the logo. Nike’s iconic brand is the success and fame of the professional athletes that wear Nike. Nike’s brand is the consumer’s aspiration to experience that success and fame.
AS AN INVESTMENT FUND, THERE ARE THREE STEPS THAT YOU CAN TAKE TO EMULATE THE BRANDING SUCCESS THAT APPLE AND NIKE HAVE ATTAINED. THREE STEPS TO CREATE TRUST AND INSTILL DEEPER LOYALTY WITH POTENTIAL LIMITED PARTNERS.
First, rethink the concept of branding for your fund. Your brand is your logo, your website’s color scheme, the fonts your use, your pitch deck, your bios, and your professional headshots and video representations. All of those things are brand. But those things alone are not the essence of your brand.
In investing, YOU are the brand. YOU are the expectation of excellence. YOU are the quality of design. YOU are the emotional feeling of trust.
Your brand is your expertise. Your brand is your viewpoint. Your brand is what you stand for and why you invest the way you do. Your brand is a collection of all of these elements working together. Your brand is a promise that you make to potential limited partners. A promise that you deliver over and over again. There is confidence in clarity about who you are. You build that clarity over time by managing all of your branding artifacts in the digital and real-life worlds.
Second, you must regularly and consistently broadcast your brand to the marketplace. There has been a virtual explosion in the number of funds competing for investment dollars in the market today. Many of these competitors are accomplished, professional, and successful – just like you. It has gotten more challenging for limited partners to discover the best teams among this crowded marketplace successfully. To win future investment capital, your fund must make this job easier for limited partners.
Building and consistently broadcasting a strong brand is the key to accomplishing this.
Third, you must allow potential limited partners to engage with your brand. Potential investors must see, understand, and engage with everything that your brand stands for. Investors want to see what you see. Investors want to understand what you understand. They want to believe what you believe. In short, potential investors want accretive engagement. It grows over time and increases in meaningful value.
Investors need proof that they can trust you. This proof cannot come solely through a one-hour pitch meeting and a few email follow-ups. The more opportunities potential investors have to engage with you, the better they will understand your brand. The more comfortable they are with your brand, the higher the probability they will invest with you.
Engagement is particularly important for emerging managers that are working on the first or second fund. In these instances, there isn’t a decade of strong investment performance over several market cycles to lean on. These funds must continually prove to their potential limited partners that their brand is reliable and trustworthy.
Potential limited partners have a choice when it comes to smart, professional, and successful investment managers. Those with the strongest most recognized and most sought after brands win. Building a strong and trusted investment brand is not easy. However, what you get in return for the hard work is a large and growing investor ecosystem that understands you, trusts you, and looks forward to your consistent engagement.
Successful private equity funds are already leveraging their brand to gain new potential limited partner capital. Is your fund doing this?
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