How do you ensure your approach to a market opportunity is accepted as the best? Don’t say it’s yours.
The hazards of recommending your own investment approach
I’ve got a cold. A bad one.
I come to you and say, “I just can’t shake this cold. Do you have anything that might help?” You give me three options:
- A hot lemon drink
- Your own brand of paracetamol
- Hang some chicken innards over the front door
You then proceed to tell me that your paracetamol is clearly the best option. It has the latest, most powerful compounds, it’s easy to swallow and just one pill will do the job.
Of course, paracetamol is genuinely the best option of the three. But, because you’re pushing your version of it, I’m getting suspicious. And I’ve got some difficult questions for you.
Is this really the best option? Is this the best version of that option?
Is there another option that could work just as well – or even better – but isn’t yours? A more powerful brand of paracetamol made by a more experienced team? What about ibuprofen? Fresher chickens?
If you had told me the paracetamol was the best option without claiming it as your own, I would have likely accepted it.
You will have sold me on the approach to overcoming my cold – I trust you. Now is the time to tell me why your paracetamol is clearly the best.
The same is true of your investment approach.
How to talk about your investment approach (without saying it’s yours)
You know how to develop a great marketing deck. Open with the opportunity – get them interested in the potential returns – then hit them with why your approach is best.
But if you really want them to buy into your approach, don’t claim your approach as your own. Present it as obviously the best choice to exploit the market dislocation/opportunity, before going on to explain why your fund is the best fund – the only fund – to execute on this.
Describe the challenges to accessing this opportunity
You’ve introduced a generational market opportunity – a dislocation that may never come again. Or maybe you’ve opened their eyes to a new way of investing in old markets. Perhaps you have the solution to a major problem for investors in today’s world.
Whatever the opportunity, what do you need to access it? What challenges lie in an unsuspecting investor’s path? Perhaps deal sourcing requires local contacts, or this industry requires specialist knowledge. What resources are needed to add value to portfolio companies?
Show that you can overcome these challenges
It’s time to tell the investor why you have the expertise and resources to execute on this approach.
For example, you’ve explained that now is the best time to invest in US private equity. You then go on to say that the best approach to this market is via investments late-stage logistics companies.
Now confidently tell the investor why you have the right local experts, contacts and systems to thrive in this market segment.
In conclusion
You’ve introduced a market opportunity you know is attractive. You now need to confidently inform the potential investor of the best approach to this opportunity.
This approach should feel as much a revelation as the opportunity itself. It is just something that exists and must be acted upon – if you have the right expertise and resources.
All you need to do is show that you are best placed to execute.
Talking about your investment approach is just one small part of how we make sure you are raise-ready in today’s competitive market.
