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At a BlueChip CEO briefing event for fund managers, we brought together a panel of industry leaders for an insightful discussion on how to attract FUM in an increasingly competitive landscape.
Benjamin Chong, partner at Right Click Capital, a founder-led venture capital firm investing in technology businesses, called on his 20-year track record of investing in and building successful internet-related businesses to share some insight in attracting new clients as a lean start up in the Australian market.
“We’ve realised that for some managers, we’ve had to create or show them stories of the portfolio companies we’ve invested in, the good work they do, and to give them something they can share with their members”
- Benjamin Chong, Partner, Right Click Capital
As Benjamin pointed out, attracting investors isn’t always easy. It takes time, and more importantly trust. Trust in the work you have done and trust in the work you can do for them.
Throughout the panel, Benjamin delved into the three fundamental pillars he found successful when attracting FUM as a relatively new venture capital firm in Australia.
1. Educate the market
As a venture manager for many years, Benjamin has seen some turbulent times. He saw venture capital boom and bust during the dot com crash in the early 2000s. Noticing an “allergic reaction” against venture capital in Australia following certain events over the years made him realise that the market needed their confidence reaffirmed through education.
Educating the market on nomenclature and how returns are measured isn’t always enough to gain confidence from prospective investors. Some investors need more evidence to be convinced.
Creating a strong narrative around Right Click Capital’s ability to seek out tech start-ups on a growth trajectory and the performance of their portfolio companies has helped Right Click Capital to attract FUM - fast. Hard evidence of the good work the firm has done in the past makes it just a bit easier for trust to come about.
Benjamin explained the importance in the narrative being malleable to suit different audiences, so that even high net worth investors and family offices were intrigued by venture capital in technology.
2. Demonstrate your ability to deliver wins
For every audience, Benjamin crafts and communicates a strong key message; he and his fellow partners have started, built and sold technology companies, so they know what it’s like and what to expect.
Building and maintaining good relationships with the ventures you invest in is important – and investors recognise this. Having strong company values that are put to action in your relationships with portfolio companies builds rapport with those businesses, and it also attracts FUM.
This solid foundation of communication, transparency and company values, as Benjamin describes it, builds that sense of, “Hey, we’re not going to come and tell you how to run things. But we’ll hopefully share some of our experiences with you”.
In building this image for your firm, the portfolio companies are more likely to actively seek your advice and support.
Reminding them that you are simply sharing experience and expertise rather than trying to change or take over is essential when building rapport.
A mutual respect with portfolio companies can be developed, while also strengthening your investors trust in your ability to deliver wins and support growth in the very businesses they invest in.
3. Communicate
As communication consultants, BlueChip can attest to the power of effective communication.
Benjamin’s key message to attract FUM is simple: Right-Click understands technology, so they have an ability to seek out ventures that have potential and then use their expertise and network to support them in their growth.
This says to investors that their money is going to be invested in the right start-ups at the right time, and that they can expect a good return on their investments.
Benjamin hones in on the significance of consistent communication, transparency and availability. Whether it’s sending monthly updates to existing prospective investees and institutional friends or being available to meet on a regular basis, having a constant flow of open communication is essential to building and maintaining trust and a reputation in the market.
Investors recognise these traits; they will set you apart from the rest and give your firm a human quality, something that can go missing in this industry.
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If you’d like to discuss adjusting your communication strategy for the current times, please call us or fill out our contact form here.
