Track record and credibility
A deal team member can claim the part of a deal they personally did, described in the role they actually held. That means saying what they sourced, underwrote, raised or managed. It does not mean presenting the whole team's results as their own. A partner's deals can be shown too, but as the partner's, with a clear note of the role played in each one. Investors want to know who sourced, ran and closed the deal.
Numbers need the same care. For IRR, line up every dated cash flow for each deal and run XIRR in a spreadsheet. Label the result gross or net of fees and show it next to the equity multiple. First-time sponsors are told to close smaller deals first and be honest that they are new. Even a single deal can be presented as it happened, with securities counsel reviewing the wording.
8 videos, 6 questions and 1 guide on this topic.
Guides
- How to Build a Track Record When You Have NoneAlmost every capital raiser starts with no track record.
Videos with summaries and takeaways
- Kevin McGovern on Joint Ventures, Vetting Deals and Global GrowthKevin, chairman and CEO of McGovern Capital, explains how his single family office approaches large deals.
- How Olympus Pines Raised $500M to Build a Car Wash PlatformTrevor turned down a $15 million term sheet for six car washes before he had built a single one.
- How to Prepare For and Survive Investor Due DiligenceSlow replies are one of the quickest ways to lose a sophisticated investor, according to Richard C.
- Common Capital Raising Mistakes and Tips from a $7 Billion RaiserPromising a 50% IRR does not move investors forward.
- How Focused Due Diligence Helps You Win Better Deal TermsRichard C.
- How Top Investors Source Exclusive DealsDeals come from relationships, and finding good ones is the hard part.
- How a Wealth Manager Screens Alternative Investments for ClientsChristina, a wealth manager in Silicon Valley, says the first test for any fund is whether its risk profile matches the risk profile of the client's goal for that money.
- The One Thing Investors Look for Before Writing a CheckPanelists at a Family Office Club event were asked for the one factor that would make them say yes to an investment.
Questions answered
- How do I present track record from a previous firm?Show what you personally did at the previous firm, with your exact role and results you can document.
- How do I calculate IRR for my track record?Line up every dated cash flow for each deal.
- What track record can I claim as a deal team member?Many sponsors describe the part of a deal they personally did, in the role they actually held.
- How do I build credibility as a first-time sponsor?Build credibility by closing smaller deals first and being honest that you are new.
- How do I show traction to investors with only one deal?Treat one deal as the first step of your momentum.
- Can I use my partner's deals as my track record?Many sponsors show their partner's deals by presenting them as the partner's and saying what their own role was in each one.
- How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
- What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
- How do I raise capital for my business?I raise capital by building a repeatable system for attracting the right investors, establishing credibility, and developing relationships before asking for money.
- How do I raise money with no track record?I would raise money without a track record by focusing on credibility, relationships, and evidence of my ability to execute.
Tools for this topic
Common questions
What track record can I claim as a deal team member?
You can claim the part of a deal you personally did, described in the role you actually held. Say what you sourced, underwrote, raised or managed, and do not present the whole team's results as your own.
How do I calculate IRR for my track record?
Line up every dated cash flow for each deal, with money in as negative and money out as positive. Count any unsold holding as a final positive at its current value, then run XIRR in a spreadsheet.
Can I use my partner's deals as my track record?
You can show your partner's deals, but you must present them as your partner's and say what your role was in each one. A partner's record can help win trust, but it does not replace your own.
