7 Steps to Raising Equity Online
By Dr. Adam Gower
If you are a real estate sponsor looking for alternative equity sources and are interested in learning how to find high-net-worth investors online, this article is for you.
In it I'm going to show you a simple 7-step process for how to improve your online presence so you can attract, nurture, and convert prospects into being active, repeat investors with you.
But first, here's some background to contextualize what we're going to be covering.
I learned exactly how to sell real estate assets online during the Global Financial Crisis of 2008-2010 when I sold over $1 billion of real estate collateralized distressed assets across hundreds of transactions for banks and private equity funds, and I did it entirely using proprietary automated email systems that I developed and that were state-of-the-art at the time and very effective.
The digital marketing world has come a long way since then.
Today systems and campaigns are incredibly sophisticated but have never been of much use to real estate professionals because it was prohibited to use them to solicit investors.
As you know, recent changes in the law (JOBS Act) have caused a transformational shift in real estate capital formation.
Now savvy real estate developers are using advanced digital marketing systems to raise equity for their deals.
Here is a 7 step process we have been developing here at GowerCrowd since early 2014 and that our clients (who collectively handle over $25 billion in AUM) have used to raise north of $300 million (at time of writing).
The 7-steps leverage best-of-class, proven practices that we implement for our sponsor clients every day.
You can use it to access the capital you need now and have enough to harvest all the distressed deals you can handle during the next downturn. The first thing you do is to...
1. Claim all your digital real estate
You are a real estate professional. You understand the value of hard assets. Well,
Here’s a simple fact.
Some of the most valuable real estate on the planet is the real estate that exists ONLINE.
Facebook, LinkedIn, YouTube and others are all worth tens if not hundreds of billions of dollars. They have spent gazillions building the digital infrastructure to create the most powerful marketing and traffic generation machines in history.
You are going to leverage those tools by staking your claim to your own pages on all the major platforms.
If you don’t already have a Facebook business page, set one up – they have 2.23 billion monthly users.
If your LinkedIn profile reads like a resume, turn it into a FREE billboard promoting you and your deals to their 500 million users.
Sync your messaging across all of them, strategically add CTAs (Calls to Action), and funnel visitors to landing pages on your website for more information. Then using data analytics, AI, and lead scoring, identify your ideal investors and put your message right in front of them.
It’s insane how sophisticated data harvesting can be and how it can help you raise money.
For example, whenever a prospect visits your website, they will pick up a small amount of tracking code that you install.
In your advertising campaigns, you instruct Google, Facebook, or LinkedIn to show the investor your ad whenever they perform an action you define.
It’s like you can read your investors’ minds.
You can serve your prospects with valuable, useful information right when they are most interested in hearing from you and learning about what you have to say.
And it's all done in a completely natural way that syncs perfectly with predictable online behavior.
Now that you have established your online foundation, it's time to...
2. Get your prospect’s name and email address
It’s crazy how much information is out there about all of us and you can use that to provide tremendous value to investors by giving them exactly what they want right when they are looking for it.
Whenever we hit ‘I agree’ on any website we are permitting the website to access everything we write and do.
By mining that data through sophisticated online searches you can locate your ideal investors and provide them with high caliber educational materials explaining what you do and encouraging them to interact with you.
It is an incredible untapped resource you can use to help investors sort through their online searches so that they find YOU.
There are 11 million accredited investors each worth $1 million or more. That’s nearly $11 trillion of wealth here in America alone, and yet there are only 300,000 accredited investors who have invested as an accredited investor according to the SEC.
And a lot of them are looking for deals to invest in.
They’ve never had access before, and you can give them that access.
Investors are actively looking for deals to invest in.
They want to know how much money you are going to make for them, and they want to know who you are and why they should trust you with their money.
To start this process, give them something of value the first time you ‘meet’ them and they’ll give you their name and email address in return.
It’s a digital handshake.
You do it by installing multiple lead generation forms on your website where you offer something of value in return for capturing your prospects name and email address.
For example you might do this with a free guide to investing, a case study, or a white paper.
Or you can simply offer a prospect access to your 'educational' newsletter and early access to your next deal.
Key is that whatever you provide has to be compelling and of value to your prospects.
It should intrigue them enough to want to know more and positions you as an expert in your area of real estate development.
The next step is to...
3. Introduce yourself and start the dialogue
Most investors are hesitant and distrustful.
Your current investors know, like and trust you. Or they wouldn’t invest.
There is every reason to believe that once new investors come to know, like and trust you, they will invest too.
The difference is that whereas your usual way of meeting and greeting investors and building those relationships took hours of meetings and phone calls.
Now you can completely automate the process.
It’s done by setting up a sequence of emails that are delivered at pre-set intervals as soon as someone signs up to a lead-generation form on your website.
The first thing they get is sequence of welcome emails you create where you provide more information about yourself that explains to your prospect who you are and why they should invest in you.
And the most effective way to do this is to identify and keep your investors' priorities in mind at all times.
You have to earn prospective investors' trust and because they are initially going to be hesitant (as they should be and as we all are). To do this you should showcase your expertise in a way that is informative, valuable and respectful, and not preachy or self-aggrandizing.
For example positioning with messages like these work well,
- The Importance of Sourcing Off-Market deals
- 5 Key Elements of Successful Due Diligence
- How to Tell a Good Deal from a Dud
This isn’t as difficult as you may think, because the way you create this high value sequence of emails is to...
4. Digitize the process you already use
You're a pro; you’ve already done most of the work (and repeated it in person to every new investor you’ve met).
So all you need to do is to re-purpose your existing materials.
Think about the sequence of communication that you have with any new investor you meet and reconstruct that process.
Take the same presentation materials you have that explain you, your company background, your investment philosophy and your deals, and re-purpose it as:
- Pages on your website
- Audio recordings
- Ad copy
And by using technology it is a LOT easier to do than you might imagine.
For example, to create my new book Leaders of the Crowd, I recorded conversations with the pioneers of the new real estate capital formation industry and transcribed those calls. These were reformatted to create a syndicated podcast series, and transcribed and edited to form chapters in the book.
And the beauty of digitizing what you already do is that you only have to do it once.
Through these different media you can provide access to prospects to consume at their convenience without having to walk them through it each time.
Once you have set this up, it is time to...
5. Build the relationship
Now that your investors are coming to know, like and trust you, you are ready to expand the relationship and prepare them for your next deal.
You do this by creating a regular communication campaign that provides increasingly advanced, sophisticated education to your new prospective investor partners.
Using data analytics and AI, you can tell if an
- investor has opened an email you sent them, or
- if they downloaded a document, and
- you can even tell how much of a video they have watched.
By using these advanced feedback tools, you can precisely tailor your automated messaging to fit with exactly how your investors are interacting with your messaging.
This keeps prospects engaged without making you seem overenthusiastic or pushy and it respects the time constraints of your investor by allowing them to learn about you on their own terms.
It is no different from the way you instinctively read non-verbal communication via facial expressions during a one-on-one meeting, only this time you let technology read those signals and automatically respond for you.
Now you are ready to...
6. Pitch your deal
There is usually tremendous urgency in getting a deal closed, and a lot of frenetic work done to underwrite your deals and conduct due diligence in a timely fashion.
Investors are your partners in this process.
Provide them with sufficient information about you and your project so that they can conduct their own due diligence effectively.
Put everything in one easy-to-access location so investors can act decisively to close the deal with you.
It’s the same for you as a buyer when you look at a deal.
A competent seller will have a deal room with every document, survey, and due diligence item you could want, ready for you to go in, review, and verify.
Using these same principles to offer your deal to investors - using platforms like IMS, Juniper Square, or Appfolio for example - will help them accelerate their own evaluation process so that they are moving at the speed you need them to - and faster if you do it right.
Once this campaign has been initiated and is running, it is time to...
6. Close the deal
You do this by making it as easy as possible for your investors to act upon their decision to invest.
This means having an ‘Invest Now’ button, front and center typically connected to a document management service (as mentioned above - IMS, Juniper Square, Appfolio etc).
Behind this button you will seamlessly
- Deliver deal contracts
- Grant access to deal presentation materials
- Allow for online digital signatures
- Calculate distributions
AND you are going to do this while remaining fully compliant with all the relevant laws.
Bingo! That's all there is to it.
Now you might be thinking that you’ve
Got equity sources already
And that you don’t need to go online.
I hear you.
Often times there are too few deals and too much equity in the system.
I get it.
But what about during the next downturn when
Cash is king
Remember the last downturn when there was a flood of distressed deals but not enough money to buy them?
Those deals were all under-priced because there was too much supply and too little cash in the system.
But there were millions of non-real estate people out there who HAD CASH.
And they really wanted to invest in distressed real estate deals, but didn’t have the time, skills or access to do anything about it.
Then there were the developers like you who had access to deal flow.
BUT the usual equity sources were depleted.
And it was illegal to go to Joe Public and solicit investment.
But NOW YOU CAN
The ancient 1933 Securities Act prohibited you from soliciting from people you did not know.
You could only invite people to invest in your deals if you had a pre-existing relationship.
When the law changed it eliminated the general solicitation rules, allowing you to
Openly advertise to raise equity for your deals online.
Instead of being restricted to a small group of people you already know, or through haphazard introductions meeting others, you can freely contact everyone.
Now the law allows you to create automated digital capital raising machines that drive prospects into funnels, nurtures the relationship, and prepare the ground for investment.
These are digital marketing methodologies that every other industry has been using for years.
And now the you can use them too.
You can free up your time and put your fund-raising efforts almost entirely on auto pilot so you can concentrate on finding and executing on your deals.
It is perfect not just for now, but especially for when the market turns and deal flow outpaces your current equity sources.
But there is a problem with this.
Well of course there is.
Building these systems takes a lot of time and effort.
Effectively attracting investors and nurturing them to invest, requires finesse and timing and a commitment to building out sophisticated online real estate and executing on digital marketing campaigns.
The investors are out there, though, in their millions with their $trillions.
And any effort you put in today will be well worth it once the equity checks start flooding in.
If this makes sense to you then,
Here’s what to do next
I really want you to benefit from this and not let such an opportunity pass you by.
For this reason, I’ve allocated some time to review your online presence and give you some tangible, actionable feedback with no obligation,
absolutely for FREE.
We will look at your website and your social media channels and provide feedback you can use that will move the needle for you immediately in attracting and converting prospects.
We'll provide you with resources and, depending on what your goals are, some deep insights into what other sponsors are doing strategically that could change the way you approach your business model for the better.
However, as you might imagine,
we can't do this for everyone.
To be really clear.
The campaigns and processes that we are going to outline are very powerful and effective tools for raising capital.
But they won’t work for everyone to the same degree.
While we do provide training courses based on what we do for our private clients, working with us directly isn’t for a first timer looking to get into real estate or for someone looking to online marketing as a last resort financing option.
In order for me to put in all the effort to making sure that you are successful in raising capital for your deals, and to qualify for the free review, you have to satisfy some key criteria, non-onerous, but very important nonetheless.
Here they are:
1. You have to have a track record of success that started and survived the great recession of 2007/8.
This doesn’t mean that you did not struggle during the last recession, I don’t know anyone who did not, but how you handled the recession and the challenges that presented will inform investors how you likely will handle the next downturn.
And we want to be sure that your story is aligned with our obsession with wealth preservation.
We only work with clients whose deals we feel confident presenting to our own investor network who require downside protections, even if their return expectations are tempered as a result.
2. You have to have a sophisticated understanding of the relative rights and responsibilities of sponsors and investors.
This isn’t for beginners or for sponsors who are either thinking of crowdfunding as a last resort financing option, or an easy way to raise cheap capital with no responsibilities.
3. You have to have a long-term perspective otherwise there’s no point in building any of this.
If you think bunging up a website is all you need to do to see cash raining in through the ceiling, then we are not for you.
You have to want to build something that is long lasting, sustainable, and will not only see you deep into the future, but also provide you with the dry powder you need when the cycle starts to turn and distressed deals become abundant once again.
4. And you have to be willing to build a network with some targeting advertising.
Finding new investor prospects through online advertising campaigns is key to building a healthy network of active investors over time.
As long as you're experienced, realistic, and have a long-term perspective, then you are in the right place to start raising unlimited capital for your deals and qualify for a FREE online evaluation and guidance for immediate improvements with no obligation.
If this sounds of interest to you,
Here’s what to do next
Apply for your free detailed review by clicking on the button below.
But don't delay.
We allocate a strictly limited amount of time each month to do these free website and digital presence evaluations.
That’s so we can focus the rest of the time on ensuring we provide the highest value to you.
So, if you think that raising capital online is going to fit your goals for the future and you’d like to see exactly how it's done, and you are ready to get going, then...
I will personally identify the precise actions you can take, unique to you and your offering, so you can expand your investor network and start raising potentially unlimited capital online.
With no obligation whatsoever.
Act now before I book up for this month and we'll take next steps accordingly.
Thanks so much for taking the time out to read this. I look forward to working with you.