How do you get your foot in the door with brokers if you plan to raise outside money?

October 22, 2024

by a searcher in San Francisco, CA, USA

I’m looking at an opportunity that all clearly need to take on outside money to fund.

I’ve been asked to provide a personal financial statement, and while I can contribute a decent amount of capital to the deal, how do folks approach messaging to brokers that you’ll need to raise money?

0 Likes

13 Replies

105 Views

Replies

Reply by a searcher
from United States Military Academy in Washington, DC, USA

You have to remember that brokers are incentivized by closing a deal and in order to do that they mitigate risk in various ways...one would be to see upfront if someone has enough money to transact and if they don't they won't waste their time and move on to the next even if the buyer has other means of bringing capital in (it complicates the process for the broker and introduces risk of a deal not closing). I've seen many brokers that don't understand the concept of search and I typically don't engage them either as it's fighting an uphill battle. I've gathered letters of support from SBA lenders, I know of others that have gotten letters of commitment from investors and some brokers still don't care. You need to decide what your strategy is when faced with a broker like this...either continue to engage and potentially get nowhere or move on put it behind you and find the next deal.

Reply by a professional
from University of Colorado at Boulder in Fort Myers, FL, USA

I would reco reaching out to the broker and do you best to start a relationship. If they know you they are more likely to give you a pass and set up a meeting with the seller. The more you treat this as a relationship the better. Keep in mind if this deal doesn't work out there are plenty more right around the corner. I had a deal come across my desk in the past 2 weeks that looked perfect but I also wanted to raise funds. Because the broker and I started to develop good rapor he set up a meeting with the founder. In the end someone else beat us to a deal but that's OK. Hope that helps.

+11 more replies.

Join the discussion