Fundraising Special: A placement agent writes…

Dear GP,

Thrilled to hear my very favourite client (apart from all the other ones) is ready to fundraise again. But before we go any further, I wanted to send over a list of fundraising dos and don’ts – to make sure we all survive the next 6/12/18/24/36 months with our sanity relatively intact.
 
DO…

Get your existings on board. If you haven’t got at least 60 percent of your current investors planning to re-up, let’s just call the whole thing off now and go home. There was a time when you could get away with relying on new money. That time has gone.

Be realistic. Are you planning to ask for more money than you did in the previous cycle? If so, think again.

Prepare properly. Now you’ve hit the button on the raise, you’re probably itching to get out there and start schmoozing. Be patient. It’ll probably take at least six months for us to work out what we want to say, how we want to say it and who we want to send it to. Fail to prepare, prepare to fail.

Give us access. We need to understand what makes you tick. Maybe it seems weird to you that we want to sit in on your IC. But trust me, it’ll help.

Be humble. That means not turning up in a chauffeur-driven limo when you’re meeting public pension officials. Seriously.

Expect to do a lot of meetings. By which I mean at least twice as many as we did last time around. And get used to hearing ‘no’ a lot.
  

 DON’T…

Expect us to work for free. Other agents will probably offer to do some or all of this work for free. Don’t be tempted. In this business, you get what you pay for.

Hire someone else without telling us. Don’t get someone else in “to do some targeted Middle East work” part-way through the process. It’ll only confuse everyone.

Forget we’re FULL-service. Some clients ditch us after all the hard analysis is done; some try to ditch us after the first round of introductions; the polite ones wait and ditch us for their next fundraise. You guys really need to stop doing all of these things, or we’re going to go bust.

Give chapter and verse to the press (especially that PEI lot). At some point you’ll almost certainly long for a six-month break from fundraising. The SEC will be happy to oblige if you start shooting your mouth off about fundraising in the press – but it probably won’t help your cause in the long term.

Tell my wife how much of the next year I’m going to spend on a plane.

From your loyal agent