How to Solve the Zero-Brand Problem

New-to-market fund managers open their storefronts daily. And sadly, many close those storefronts two-or-three years later, having had limited success in raising capital. Just how does a venture-capital or hedge fund secure asset commitments when the alternative-investment business is dominated by outsized companies with bottomless marketing budgets?

The core issue is that most venture-capital or hedge funds start their efforts with a zero-brand problem. Name recognition within the business can be a favorable attribute. Still, we are conservative in assessing the impact of pedigree. A luminous Silicon Valley or Wall Street career may help secure meetings with qualified leads. In our experience, there are limits on how effective those rainmaker qualities are in getting specific asset commitments.

The truth is that building an asset base is a long-fuse process. Some try to short-circuit that marketing work by claiming an investment strategy is highly differentiated—or capacity to accommodate new investors is limited. Those arguments are often artificial. In practice, there is almost always a unique strategy with room to accommodate inbound institutional money.

For emerging fund managers, our recommendation is three-fold. These ideas play out effectively when a limited-scale version of an investment strategy is churning away behind the scenes. Maybe those funds were sourced from friends-and-family or even an arms-length institution like a family office. Save your gunpowder and silver bullets for prime time. Marketing overreach is a costly death blow for many new-to-market fund managers.

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1. Build a Blog With Regular Posts

Writing a regular weekly comment about your investment style is both a low-cost and streamlined effort. Yet we see plenty of new-to-market fund managers who fail to include market observations on their websites. That approach does not have to be deal-specific or performance related. If you manage money, you assuredly have views on news headlines.

Distribution of commentaries is the biggest challenge, maybe. LinkedIn has a newsletter feature. Depending on your style, Substack or Medium can be adapted to your needs. We prefer self-managed distribution. There is an endless number of low-cost email providers in the marketplace. You may want to spend time learning about deliverability issues. Sending and receiving are different concepts.

The key here is consistency. Most fund managers understand the idea of a monthly commentary. Those observations are usually sent out at the top of the month, when hundreds of other commentaries are being injected into institutional investors’ inboxes. A twice-a-month commentary both supports visibility and affords an opportunity for timely observations.

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2. Publish a White Paper or Two

Fund managers are typically targeting investment experts who are highly attuned to their decision-making process. Think about who is on that allocation committee. Finance professionals tend to be analytically competent. They respond to rigor, forethought, and timeliness. They likely have advanced degrees with an array of chartered credentials.

That profile means that decision makers are often responsive to well-composed and original insight. White papers may seem old school; their heritage is tied to Wall Street research departments. Yet these outsized reports linger as a marketing approach because they work. How else to best get your story, ideas, and biases in front of the right people? Just be careful about using a generative AI tool. Speedy output can create everyday analysis to the detriment of your brand.

White papers have the benefit of shelf life in ways that monthly, or rather twice-a-month, commentaries do not. They can stay in circulation for years, ideally becoming a go-to resource on a selected topic. In our work, we still get requests for a white paper written by one of our clients before the pandemic. Importantly, those documents are useful as a centerpiece for investor meetings. They can be deployed as discussion follow-up when other choices are exhausted or lack relevance.

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3. Plan to Speak at a Conference

Perhaps the single best use of marketing dollars is to attend an investor conference where capital sources are prominently in attendance. The reason is simple. You have a captive audience that is attuned to exploring investment ideas with skilled professionals. The mistake some firms make is that they send a junior associate to represent their interests. Investors want to speak with the individual who is the mastermind behind the fund strategy.

Cost and timing are two drawbacks to investor conferences. We suggest avoiding the temptation to be tactical in attendance. Signing-up too late means you likely will not get proper mention in conference materials. And it may be difficult to schedule meetings around the event. Nothing is worse that having a qualified investor ask you to “send a presentation deck” because their schedule is fully committed, especially when you are there to overcome Zoom fatigue.

You do not need to spend money on a “platinum” sponsorship to use a conference effectively. Often panelist positions can be secured for a more limited financial commitment. That air time is invaluable. Your public comments will nudge attendees to visit your website. The best conference organizers do a reasonable job of ring-fencing service providers. With apologies to software vendors, you are there to identify qualified investors, not buy a lead profiling system.

A Timeless Approach Is Cost-Effective

Industry veterans may think this three-step approach is puerile, if not out-of-date. We prefer to describe it as basic, if not timeless. You do not need a marketing department to organize these efforts. In a pinch, you can outsource the tasks over the course of a year. Remember: The goal is to raise brand awareness so that—when you come knocking—qualified investors have actually heard of your firm or can easily glean aspects of your experience.

There of course is a role in this mix for public-relations activity, but those efforts are often narrow in scope. Our focus here is planned channel development where return-on-investment can be tracked and monitored in tandem with sales activity. For emerging fund managers, the most affirming measure of that success is watching assets-under-management grow over time.

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