Things are going well here at my new home at Eastward Partners. We closed four deals last month and are on track to close another five this month – not too shabby!
In addition to lending money to good businesses to finance their expansion, we also need to raise capital from limited partners. I’ve been active on both fronts since I joined the firm in April. I’ve reflected upon our success in the fundraising process and thought I’d take a few moments to share the experience with you. Fundraising from limited partners is a what I would call a “special process”. It goes something like this:
1. The Teaser: this is an email that goes out to several hundred potential investors. Each email must be sent by hand – no cheating using constant contact or any automated service. On the surface, it’s called a “Teaser” because it gives just enough information to whet someone’s appetite. In reality, it’s a “Teaser” because it tests the spam filter at many of the potential LP candidates.
2. The Phone Call: this is where the real fun begins. Everyone that gets an email, gets a follow-up phone call. I’ve made several hundred of these…often multiple ones to the same people. The basic process involves leaving a voicemail because no one (intentionally) picks up. If they mistakenly pick up they apologize and say things like “I thought you were my 7am conference call and I need to go. I’ll call you back later today”…after which, they don’t.
3. The Follow-Up: unfortunately most LP’s try to ignore me. This is futile. I leave several voicemails and emails until they agree to talk. My favorite excuse from a potential investor was “I like the idea of investing in Eastward VI but I can’t get my partners to move on it. They’re incredibly lazy!”
4. The LP Meeting: This the coveted part of the process – meeting with actual potential investors. I’ve included a link below on how some of those meetings proceed.
5. The Commitment: I’m delighted to report that despite all of the hundreds of rejections, there are actually investors that have both the capacity and appetite to invest. I just needed the over-developed sense of humor and stamina needed to find them.
Enjoy the movie…
Eastward Capital Partners
432 Cherry Street
West Newton, MA 02465
o: (617) 762-3611
c: (617) 947-6272
LinkedIn Profile: http://www.linkedin.com/pub/timothy-o-loughlin/1/aa6/687
Eastward Capital Partners – providing $1 – 10 million venture debt, growth capital and equipment financing to venture-backed, emerging growth companies since 1994. We also provide expansion capital to non venture backed companies.