How to pitch target industries to resonate with traditional investors?
May 14, 2024
by a searcher from Harvard University in Lake Oswego, OR, USA
Hi Searchfunder community!
I'm currently forming an investment thesis and making plans for fundraising (a traditional search). I have questions about how folks identified their target industries and what resonated in their pitch with investors.
Would anyone with experience fundraising for a traditional search be free for a quick call? I'd really appreciate hearing your perspective. Thank you in advance!
About me: Background in product management, startup operations (revenue), and venture capital. Involved in multiple M&As - as an investor, a startup operator, and a strategic acquirer. A.B. Economics at Harvard. Based in Lake Oswego, Oregon.
from Harvard University in Cambridge, MA, USA
1) Align with your vision for the future of the target industry AND your value creation plan based on your industry/professional experience, and demonstrable understanding of the industry via outreach to varying companies, sales professionals, experts currently in the industry.
2) Have a history of investing in similar businesses. Look for investors with a track record of success in your target industries OR with businesses that have a similar risk profile.
3) Demonstrate personality congruence. Look for investors whose communication style, decision-making approach, and overall personality mesh well with yours. After all, this is a long-term partnership. Don’t ignore the strong element of fit beyond just ‘business interests.’
All the BEST!
from Harvard University in Denver, CO, USA
1. Having an industry focus (or a few key investment theses) are important, but it is equally as important why those theses make sense for YOU. In an increasingly competitive lower middle market space, you will need to convince a seller that YOU are the right one to carry on the legacy of their business so you must be clear on that right off the bat. Investors want to see that you have thought that through (and will be able to convince sellers why you make sense for their business) before they will want to back you.
2. Know what you are looking for from the investor(s). Some investors want to provide capital and take a back seat, while others insist on taking a more active role. Some have specific industry or functional area expertise, while others are more generalized. Remember this is a two-way relationship that will last the better part of the next decade so make sure you are all aligned and listen as much as you speak