Copywriting for Capital Raising

This short video below explains why copywriting is so important and why ignoring this area can kill your progress towards raising more capital for your hedge fund.  Below is a definition of copywriting for those of you new to the subject, and if you are reading this via rss or email you will need to click here to view the embedded video on our website.

Definition of Copywriting:  The strategic use of the right words within sales letters, websites and presentations to influence others to take action.

Angel Investors West Virginia

Angel Investors Working with Entrepreneurs in West Virginia

At an entrepreneur conference in West Virginia, angel investor Mike Smith revealed that angels are working with a local West Virginia man to start a bottled water company that could enter New York and other Northeastern markets.  The startup was used as an incentive for other local entrepreneurs to get their businesses off the ground using angel capital.

In this area, the Gateway New Economy Council pulls together investment angels and acts like a centralized clearinghouse for the Angel Investment Network.  GENC works with entrepreneurs on their presentations to investors so they can defend their business plan, said Lori Rea, GNEC executive director.  “Angel investors want to invest in their own backyard,” she said. “They are hands on. Entrepreneurs have to expect that level of involvement.”  “If you need access to seed-stage capital, let us know,” Rea added.

A venture capital organization that also has invested in the tri-county is the West Virginia Jobs Investment Trust. STaSIS needed growth capital, so JIT approached an angel investor in Charleston who wrote them a check for $100,000, he said. Other organizations invested in the move as well, Zulauf said, such as the West Virginia Infrastructure Council, the Bank of Charles Town and the Jefferson County Development Authority.  STaSIS should break ground for its new facility at Summit Point in about a month, Zulauf said. He expects Gov. Joe Manchin to be there for the ground-breaking ceremony. STaSIS produces after-market performance-enhancing parts for Audi cars.

Other speakers at the entrepreneurs event were Gail Moxley of CNB Bank, and Christina Lundberg, manager of the Small Business Development Center of the Eastern Panhandle and Joe Brouse, business lender, of Natural Capital Investment Fund.  Meetings are usually held on the first Thursday of each month at 5:30 p.m. The next meeting will be on Sept. 3 at the Country Inn, Berkeley Springs.  Source

Jack Lang

Angel Investor Jack Lang’s Top Tips for Entrepreneurs

Jack Lang is the entrepreneur-in-residence at the University of Cambridge’s business school.  He has worked with a number of entrepreneurs and advises them to focus on understanding their customer.  Here is his quick tip for entrepreneurs:

Angel Investor Ron Conway

Video of Angel Investor Ron Conway

Technology is one of most popular angel investment areas.  Social media networks like Twitter and Facebook are websites that may have seemed ordinary to the untrained eye but with some capital from angel investors companies like those can grow immensely.  It’s every angel’s dream to get in on the ground floor of a company like Facebook which is why it’s so exciting to hear from someone like Ron Conway.  He sits on the advisory board for Twitter, Facebook and Digg–all highly successful social media technology companies.

The following video is a forum conversation with Ron Conway in which he discusses the current IPO Market, what defines a successful entrepreneur and what the opportunities are in websites like Twitter and Facebook.

Angel Investor Risk

How Angel Investors Reduce Risk

Dave Berkus

Video of Venture Capitalist and Angel Investor Dave Berkus

David Berkus is an early stage venture capitalist and angel investor specializing in technology.  Mr. Berkus serves as Managing Partner of Kodiak Ventures, L.P. and of Berkus Technology Ventures, LLC, both early stage capital investment funds - and Chairman- Emeritus of the Tech Coast Angels, one of the largest angel investing networks in the United States.  The following is a video of Dave Berkus speaking on investments.

Venture Capital Investor Relations

Advice for Improving Venture Capital Investor Relations

It’s often the case that General Partners are at one of two sides of the Investor Relations spectrum. Either the GP wishes to improve their Limited Partner relations, but doesn’t know how to go about revamping this area; or the GP is damaging their limited partner relations and totally oblivious about it. So, even if you believe that your team is satisfying your limited partners, it’s worth looking reviewing. Fortunately, Denise Palmieri at peHUB specializes in investor relations and offers her seven tips for improving limited partner relations. I’ve added my own thoughts on the advice:

1. Start Over: Reexamine the way you communicate with your Limited Partners. Ask yourself: “How do you communicate with them? Do you actually talk with them or is it simply a reporting function and you only actually speak with them when you need their renewed investment for the next fund?” Limited Partners will respect the fact that you are taking steps to improve your relationship so don’t be afraid to directly ask them what you can do to strengthen their trust in you. Take that feedback and work to address it, you will do further damage to the relationship if they tell you what you can do and you ignore it.

2. Commit Your Time and Effort: If you are serious about limited partner relations then you have to incorporate this area into your routine by setting aside regular time to build the relationships. Palmieri suggest going beyond required reporting and the annual meeting, and keep up informal communication with your investors. Limited Partners know what you are required to do and by doing more than that minimum you are showing that you care about them and their input. Emphasize the idea of a partnership–after all, that is what you and your investors are–and by keeping them involved in the decisions you promote this relationship and removes some of the shroud from your operations. You can also benefit from hearing the LPs perspective, and some LPs may contribute their network of contacts and experience to the partnership.

3. Be Honest and Forthright. As Palmieri puts it, “Don’t play hide the ball or sugarcoat bad news.” GPs can do irreparable damage to their Limited Partners relationships by being dishonest or covering up failures. Limited Partners may look past poor performance but lying about it can expand what would have been a minor setback. Lesson: be honest and direct with your Limited Partners.

4. Offer Sincere Appreciation. Any top performing fund can use a little humbling and nothing can take you down a peg as losing a valuable client because you put other aspects above LP relations. Even if your fund is bringing great returns, you should never lose sight of who gave you the money in the first place. Your fund may be doing great now, but that might not be the case next year and you need a strong relationship to keep those Limited Partners with you through thick and thin. So show your appreciation for their investment, loyalty and advice.

5. The Grass is not Greener. Although you may have other Limited Partners that you can turn to, it’s often easier to work toward satisfying your existing investors and building that relationship. It’s important to balance finding new investors for your next venture and keeping your current ones happy. Limited Partners won’t appeciate you neglecting their current committment because you’re working on impressing the next group of investors.

6. The Buck Stops Here. There are a lot of factors that combine to produce poor returns to investors, but inevitably a share of that responsibility falls on you. Palmieri notes, “Humility and self-reflection goes a very long way in an industry filled with uber-confidence and differentiates you from the blame-layers.” Limited Partners should know that there is never a fund that will always produce high returns every quarter. Simply explain what happened, say you’re sorry and try not to make excuses.

7. Flexibility is Survival. When negotiating terms with your investors, put yourself in your Limited Partners’ shoes. Try imagining your reaction if a prospective portfolio company asked for those terms. Really, your role as an investor in portfolio companies is similar to your Limited Partners to your fund. “Flexible relationships with mutually aligned interests are the ones that survive in all conditions.”

Going the extra mile with your clients can really make a difference in retaining your investors. Taking concrete steps to improve your Limited Partner relations is crucial in a time when investor confidence in General Partners is so weak.

To read the full article click here.

Attracting Angel Investors

What Angel Investors Look For in a Company

Private Equity Startup Event

We are putting together a panel for an investment fund startup up event scheduled for June 18th, 2009.

We are looking for a private equity fund manager who would like to be on a panel sharing startup stories with other small hedge fund managers. We are looking for tips on forming a fund, raising capital, hiring talent and wearing multiple hats while running a private equity fund business.

If you are a private equity fund with less than a 5 year track record and under $100M in assets under management please email me directly at Richard@HedgeFundgroup.org.