I asked the fundraising panel at the SuperInvestor 2015 conference which private equity pitching mistakes are made by fund managers time and again. On the panel were Catherine Lewis La Torre, Anna Dayn, Spencer Miller and Marc der Kinderen. Between them, they see around 400 fund pitches every year.
The panel revealed that of the 400 private equity fund pitches they see each year, they eventually invest in about 10 of them. Learn from these mistakes made by other fund managers to increase your chance of securing investment.
The job of investors is to ask questions and be critical. They need to be sure they have accurate and comprehensive information on which to base a financial decision. Yet, rather than responding politely, Marc der Kinderen often finds that the fund manager takes things personally.
He said, “We are looking for people we can team up with for a decade. The moment we find people who are aggressive and defensive about their history – if we can’t ask questions – then due diligence stops.”
Catherine Lewis La Torre said, “I find it frustrating when I ask a question and the fund manager says, ‘I’m coming to that, it’s on page 20 of the presentation’. Often the question never gets addressed.”
Although you may have prepared a standard pitch, remember that every investor is different. Refusing to tailor your pitch or answer a question straight away shows an attitude of indifference towards your audience.
If the members of a pitching team contradict, interrupt or ignore each other, the stability and strength of the team are put into doubt.
Spencer Miller said, “It’s my number one test: how do they interact with each other? Is it a partnership, or is it individuals?”
Showing up late or rescheduling at the last minute gives an impression of disorganisation as well as a lack of respect for the LP.
Anna Dayn said, “Some managers have an incorrect assumption that we have limitless time for them.”
Benjamin Ball Associates can help you avoid these and many other common mistakes.
Let us help you prepare your private equity team for investor presentations. We combine our knowledge of the private equity sector with executive coaching, pitch polishing and intensive role-play. We can support the pitches and presentations of both funds and portfolio companies, maximising your chances of securing investment.
If you want to improve your pitch to investors call Louise on 020 7193 0130 or email firstname.lastname@example.org. We’ll make your pitch confident, memorable and effective and ensure you avoid many more mistakes than just those above.
Paul Farrow is a Partner at Benjamin Ball Associates. In this video from SuperReturn US East, Paul discusses the common mistakes made by Private Equity funds when communicating with potential investors. He reveals the unexpected personality trait that investors look for in fund managers, and why LPs don’t want to ‘be taken through your pitch presentation’. He shares essential advice that will improve your fund’s messaging, help you stand out and impress prospective investors. Click the play button below to watch:
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