Why are developers failing to raise private investors funds?

by Andrew Roberts

17:33 PM, 1st July 2020
About 3 months ago

Why are developers failing to raise private investors funds?

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Why are developers failing to raise private investors funds?

6 things you need to know if you are serious about raising finance from private investors. Lets start with “What do private investors want to know?”

Whether you are looking to kick start your property journey or scale your property business, raising money from private investors will help you reach that next stage. The challenge is for you to convince investors that you and your projects are worth investing in.

Caryn and Antoine are private investors. She is a qualified barrister, solicitor, and financial compliance specialist. He is an ex-investment banker. They invest hands-off in other people’s projects. Well, they try.

Having spoken with over 50 developers, they have realised that people raising money do not have a good understanding of how to market themselves.

Investor packs are the best example to illustrate this problem. Investor packs are generally the first thing developers send out to prospective investors. They are the main source of information for investors. Often, the content and the format fall short of expectations causing you to lose investors before they have made it through the door.

Here are the six things you need to know if you are serious about raising finance from private investors:

1) We often think about how to make a good first impression in person but neglect the first impression that an investor pack will make. Put your best foot forward by creating an investor pack that meets the requirements of your investors.
2) A poor-quality investor pack does not necessarily mean that the project is unattractive, but it will make any project look unattractive. Do not allow your investor pack to let you and your project down.
3) Most hands-off investors are cash-rich but time-poor. Make it easy for them to do their due diligence on you by providing the information they need in a suitable format.
4) One of the fundamental principles of business is that people work with those whom they know, like, and trust. Property is no different. Investors want to partner with developers whom they know, like, and trust. Establish trust by being honest, transparent, and forthcoming.
5) The best time to look for money is when you do not need it. You do not want to wait until you have a project and you are desperate for funding to start looking for investors. Investors do not like to be rushed into parting with their hard-earned money, no matter how attractive a deal may be. Build your investor base ahead of time, to make obtaining funding easier when that project you have been looking for materialises.
6) Everybody has heard about horror stories in the property world involving investors and unscrupulous developers. There is a high climate of suspicion in the industry, and the onus is on you to prove that you are a good egg.

Want to know more?

Caryn and Antoine will be sharing what hands-off investors want to know and answering your questions live on the 6th of July 2020.

Visit https://www.greatpropertymeet.co.uk/  for more details or see the events section on Property118


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Andrew

9:49 AM, 3rd August 2020
About 2 months ago

If you want to see a full presentation with Q&A with Caryn and Antoine then you can watch it here - https://www.youtube.com/watch?v=hI6VjTgV4zo&t=4172s


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