We've recently raised our $100Mth dollar of LP equity at Fort. Lessons learned from the trenches - in no particular order.
Side note: Fort, to date, raises deal by deal.
1. Be transparent and accessible. Duh.
Side note: Fort, to date, raises deal by deal.
1. Be transparent and accessible. Duh.
2. Not all capital is the same, it comes attached to people and their agendas/emotions. Before accepting an investment, do your homework.
3. Deliver bad news faster than you deliver good news. People are ok with the truth, they aren’t ok with surprises.
3. Deliver bad news faster than you deliver good news. People are ok with the truth, they aren’t ok with surprises.
4. Report quarterly. Provide financials and a letter with updates on any major decisions or progress to the business plan.
5. Strive to be the first K-1 investors receive each year. Very underrated.
6. Investors love receiving distributions - so we do it monthly when applicable
5. Strive to be the first K-1 investors receive each year. Very underrated.
6. Investors love receiving distributions - so we do it monthly when applicable
7. Use investor management software if you can afford to - creates 10x the experience, with 1/10 the overhead. We use Juniper Square.
8. Thank your investors and send them an annual gift or handwritten letter. Or both.
8. Thank your investors and send them an annual gift or handwritten letter. Or both.
9. Build a culture that treats your smallest investor the exact same as your largest investor.
10. When writing/reporting to investors, be deliberate about what is a fact vs what is an opinion.
10. When writing/reporting to investors, be deliberate about what is a fact vs what is an opinion.
11. Investors are friends with other investors. A referral from an existing investor to a new investor is the ultimate compliment.
12. Your track-record matters. Have one handy and current.
12. Your track-record matters. Have one handy and current.
13. Always err on the side of under-promising. It’s better to say nothing than to overhype a potential lease you’re signing that never gets signed.
14. If an investor passes, do your best to get feedback on why. Often, this can be a huge learning opportunity.
14. If an investor passes, do your best to get feedback on why. Often, this can be a huge learning opportunity.
15. Alignment. Let investors know quickly what your skin in the game is. If the ship goes down, you better be headed down with it.
16. After a successful investment, most investors will call you the day after you return capital to ask if you have another investment coming soon.
16. After a successful investment, most investors will call you the day after you return capital to ask if you have another investment coming soon.
17. There's a lot of capital out there right now.
18. The market crashing is not the only risk in your deal.
What did I miss?
18. The market crashing is not the only risk in your deal.
What did I miss?
