Finding and targeting the right investors

Capital Raising FAQ: Investor Targeting, Fees and One-Liners

Capital Raising Frequently Asked Questions Webinar

First-time and growing capital raisers, fund sponsors and emerging managers who want practical answers on investor targeting, fees, structure and pitch basics.

Five points worth keeping

1. Target investors already up the curve. Richard says deals must move up trust curves for leadership and for the industry. Investors who already know the team or the sector are often easier to close. Friends and family often come first for this reason.
2. Study where your investor spends time. Instead of asking where to find investors for a niche, learn which associations, newsletters and podcasts they follow. Exits in your sector are a good place to look. Zooming out half a layer, such as from biotech to healthcare, also widens the pool.
3. Do not blast the database. Richard says mass emailing and hoping 5% reply rarely works. Richard recommends meeting in person, using each flight to book extra investor meetings, and preferring video calls over phone calls or email.
4. Flexible terms beat standard fees. Teams of two to three people with a short track record may consider alternatives to industry standard fees. Many sponsors talk to a securities attorney about options such as performance-based fees, co-GP arrangements, anchor investors and leaner fee models. Richard urges raisers to be long-term greedy.
5. Start small and build a record. One raiser failed at a $30 million deal, then did a $110,000 deal, then $400,000 and $800,000. He later moved to a $10 million deal. Richard compares jumping from zero to $800 million to playing one-on-one with Kobe Bryant having never touched a basketball.

What you will hear

Richard C. Richard says every deal has to move investors up three trust curves, including trust in the leadership team and trust in the industry. He advises raisers to target people who are already partway up those curves. Instead of blasting lists, raisers should learn where their target investor reads, meets and spends time, then position themselves there.

The webinar also covers fees, structure and deal size. Smaller teams are encouraged to focus tightly and think carefully before copying industry standard fees. Non-equity options such as debt notes and royalties are discussed in general terms. One speaker story shows a raiser growing from a $110,000 deal to a $10 million deal. The talk also stresses a clear one-liner and a stated purpose for every meeting request.

Facts from this talk

• Richard C. Richard says the team has reviewed 257 pitch decks and found only about two dozen with a one-liner.
• A raiser in the talk put $55,000 into a $110,000 deal and brought in six other investors at about $9,000 each.
• In the debt note example, a company with $8 million in revenue and a 20% margin earns $1.6 million in profit, which is used as an illustration of how a business might be valued.

General education only. Not legal, tax or investment advice.

Talk to a securities attorney to explore options around fee and compensation structures, debt note terms and GP contribution structuring. Do not use AI to write your own legal agreements.

In their words

Related questions

• 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.

Questions about this video

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