by Marc Halpern, Part Time Investors LLC
August 29, 2024
I am an accredited private investor. I am your target audience if you are raising capital for a private placement investment. In this article, I will tell you what I like to see when you pitch me an offering and what are my pet peeves during all stages of that pitch from meeting you on the lunch line at a conference to performing DEEP due diligence after significant screening of your private placement offering.
As an added incentive, be aware that if you pay attention to the content of this article, you will likely be more successful with a larger group of investors. I founded a group of private accredited investors (currently 57 members) who form teams to perform DEEP due diligence (DDD) on private placement offerings that meet the investment criteria of members who have cash available to deploy at that moment. Our group is the DDD Mindset Club and our members enjoy massive deal flow, up to about 300 private placement offerings per year. Since each of our members invests in 2-6 private placement investments per year, that means that we reject 98%-99% of the deals we are pitched. That’s what you’re up against as a capital raiser.
As a result, we have established screening mechanisms to avoid wasting humongous numbers of hours chasing deals that don’t make sense or don’t meet the diverse and changing investment criteria of our individual members.
Following is a NON-COMPREHENSIVE and NON-PRIORITIZED list of do’s, don’ts and comments if you want to raise capital from passive LP private investors like me and my colleagues at the DDD Mindset Club.
1-Pager: Create and send me a 1-pager that I can browse in 30-60 seconds to get an idea if your private placement offering is even in the ballpark of meeting my investment criteria at that moment. The 1-Pager should specify:
project name or fund name
asset class
a short paragraph describing the investment
the preferred return
the equity split
the waterfall if there is one
the expected timing of distributions and milestones
a range of target IRR’s (believe me…I will challenge every assumption that goes into your IRR projection!)
a minimum investment amount (that we know is usually flexible)
a very brief description of the team’s experience/track record and
your contact information.
Alternative to 1-Pager: If you don’t have a 1-Pager and you want to pitch the deal to my group, complete the form shown at https://www.parttimeinvestorsllc.com/sponsor-info-upload.