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.
The same is true of your investment approach.
How to present 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 it as your own. Present it as the obvious 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
1) Present the obstacles
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 obstacles lie in an unsuspecting investor’s path? Perhaps deal sourcing requires local contacts, or this industry requires specialist knowledge.
Layout your investment process as a series of obstacles one must overcome.
Now you can show why you have the expertise and resources to overcome every obstacle.
2. Rely on the data
If you can show that your approach is the only approach – given the market data available – you don’t have to say it’s yours. Simply present it as the only logical way forward, then explain why your expertise and resources are best placed to execute.
For example, if the data is showing the best opportunities are available in late-stage logistics companies, then this is the best approach to investing in this market. Then go on to show that you have that experience.
3. Simply speak with confidence
You’re not trying to convince anyone. You’ve introduced a market opportunity you know is attractive. Now, you just need to tell the potential investor the only approach to investing in this opportunity.
Take them through each part of the investment process, from deal sourcing to exit, as if it were obvious. This is not your investment process, this is the investment process.
Don’t say ‘we do this’ and ‘we do that’. Say, ‘The only way to win investments in this market’ and ‘You must manage the following ESG risks’.
Remember, if you present your approach as potentially one of many, you leave room for doubt. The approach to the market opportunity should feel as much a revelation as the opportunity itself – it is just something that exists and must be acted upon.
Don’t weaken your argument and open yourself up to questions.
All you need to do is show that you can 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. Get in touch to learn more.
