The Art of Building Trust with Investors

Richard C. Wilson Guest 00:00

So this is really important and so anytime you enter a room you should think what trust curve am I trying to move the investor up, not trusting me understanding the industry or getting them on site at the opportunity and showing them the very specifics, the walkthrough of the exact opportunity on site, if you can.

Jonathan Tuttle Host 00:19

My name is Jonathan Tuttle, the host of the Accredited Investor podcast, and I'm the founder at Midwest Park Capital a boutique Mobile Home Park Real Estate Fund, along with Revenue Ascend, a leading digital marketing and fractional CMO agency and Wowipop!, a new Kava and Mood enhancing coverage. This episode is sponsored by Prestige, the world's most exclusive social networking app. All website links are in the show notes below. In this high level mini series called the $100 million Rainmaker Insights, Richard T Wilson of the Family Office Club, which is the founder of the world's largest ultra high net worth paid association and owner of billionaires.com, breaks down in short high value strategies in this 19 part mini series on how to grow, think and optimize to get your first $100 million. You will not want to miss any episodes. Enjoy this mini series. Please like, comment and share this podcast with your friends. Thank you.

Richard C. Wilson Guest 01:23

This is module number two in our 17 module Rainmaker series $100 million dollar rainmakers. Throughout these 17 modules, we're going to give you many different strategies that, when you stack them on top of each other, give you an unfair advantage when raising capital and working with investors. And these are advanced capital raising strategies and secrets. Okay so module number two here we're going to be talking about investor demographics and defining your investor avatar, we like to call it. So. This means focusing on the right type of investor.

01:54

We see this get messed up quite often, even by people who are raising a lot of capital per year. Even better if you're raising a lot of capital per year, because you can look at the evidence on what's working and focus in on who's coming in the fastest, who's the most enjoyable to work with, who is has an ease of business to them. That's just low stress and they just come on in and they're great quality investors or they add strategic value. And why would you need to focus on this? Well, this goes to a core concept I discovered after running our club, the family office club, for a decade. We found that most deals close the fastest when there's a lot of trust in the team or leadership, trust in the industry or knowledge about it, or understanding, and then trust in the opportunity, or they're local to the opportunity itself. Let's give you a couple of real, quick examples. You might know me Well, you might know medical practices Well, but if we invest in a medical practice in Guam or New Zealand, that might make you less comfortable. Right, you might know me well and you live in San Diego and we're invested in a medical practice in San Diego and you might know I know anything about the medical practice world. But your local. Come walk through the medical practice. You like the head doctor. You look at the financials and the due diligence. You might say, okay, try my backyard, I may do that deal, but you're most likely to come in. If you understand who I am, our medical, what medical practices are, because you're a doctor or you've Invested in the space before and you're local to the deal in San Diego, then you're much more likely to invest.

03:25

If you look at a deal as an investor and I tell us my investors and you don't know the team, you don't understand the industry and you're not local to the opportunity, you should not even be looking at that deal. You are wasting all of your time. You should be looking in areas where you have some confidence and conviction, because you know the team, you know the industry or you're local to the opportunity, or you can fly there and walk through the manufacturing plant or whatever it may be. So this is really important and so anytime you enter a room, you should think what trust curve am I trying to move the investor up? Not trusting me, understanding the industry or getting them on site at the opportunity and showing them the very specifics, the walkthrough of the exact opportunity on site, if you can, so you can gauge this differently based on what types of investors you're going to. If you go to 19 types of investors, there's no way to customize it to where they typically are. In that that curve those trust curves right. If you go to one type of investor and you're only pitching professional athletes and you know that the professional athletes have no idea how blockchain works, but you have something in common because you used to be a professional athlete and the deal is right in their backyard and Cincinnati or New Jersey, etc. Then you can lean on that and you can you can focus on teaching them about blockchain or driving up the trust so deeply. On the other two areas that it overrides the fact that they don't understand blockchain. This is important for this section in this module because if you don't focus on a certain type of investor, then you don't know which learning curve, which trust curve you should really be focused on in your materials and Conversations, or with your average prospect, and you can shortcut raising capital and raise capital much faster.

05:06

If you look at where, if you had success in the past, where is your background and career from? Did you come from being an engineer? Did you come from being an athlete, a lawyer, a doctor, career professional, the CEO of a big company, and now you run this investment platform and now you're raising capital? If you're a fintech company, Well then that might give you a clue to where you could raise capital from the most quickly. You might understand the lingo of a certain niche area because of your background. You might have access to groups, associations, membership organizations, maybe even the heads of some of those organizations, and that is key to tapping into a pool of pre-qualified investors. So you want to be thinking about who already understands my investment and would recognize all the hard work I did to structure and find this company or this real estate asset or this opportunity, whatever it may be, and you want to think who is local to the deal and where are there barrels of fish? Where, if we define to an ideal Investor is, they're all congregating and they're all going to this one annual event or this one Ownership club business owner club in that niche where you can't join unless you pay 10 or $20,000 a year or much more. So everybody attending is pretty successful and they're in the niche where you know that investor demographic is more likely to invest with you.

06:23

You want to think who are the advisors, the CPAs, the attorneys that advise these people, and how do you get those advisors on your advisory board? We just had the co-founder of Keller Williams. His name is Joe Williams. He invested with our short-term rental platform called investor residences comm. He put his cash into our fund, but he also joined our advisory board and he has 173,000 real estate agents. If you're familiar with the tax code, real estate agents are typically qualified and designated as real estate professionals in the eyes of the IRS and they get to use depreciation and write-offs on depreciation more fluently than a normal high net worth investor For real estate investments like R-Short and Rental Fund. It tapping into a real estate agent investor marketplace could be really valuable. Plus, we'll get deal flow by having that person on our advisory board.

07:17

That's a good example of dialing into an investor demographic. If you run a litigation hedge fund, you may dial in to law firm partners who could contribute knowledge to cases and really understand how large cases maybe have large decisions made on them where the winnings might be big but maybe have to spend $400,000 on legal fees to win the $7 million they could see the payouts on that could be massive and understand it right away. Raising capital from law firm partners may be or may not be. You might find them litigious by nature, obviously, but it's a good example of investor demographic going into an investment they would understand. Another example is a doctor invested in a medical practice. This is something where they made their money in healthcare and in medicine, but over 20 years maybe they only get one or two chances to invest in medical practices, so they may appreciate that opportunity. If you want to see how we not only target doctors for medical practices but also customize the logo of that brand and how we speak to them and the images we use, you can see that on our website at MedicalClinicCapital.com . If you want to see how we market our short-term rental property platform, you can see that at InvestorResidences.com .

08:33

It really takes some time to meditate and think on what publications your ideal investor demographic is consuming. What YouTube channels, what podcast channels, who are they subscribing to? What are they reading? Where do they live, what organizations and clubs do they belong to, etc. Where are their barrels of fish already organized, where you can either participate within that community and, if it starts working, then partner with the head of the community or sponsor, or be the exclusive sponsor of that community, or create your own lookalike community that gathers together these really qualified prospects for you. Make sure you're speaking their language.

09:08

You dial in those three trust curves that we talked about, and a lot of times people say, well, I don't need this, we raise capital from everyone, or we raise capital from high-net-worth individuals, or I ask them and they say, oh, we raise capital from family offices. It's kind of a lazy bad answer, though, because it's not really dialed in to a specific type of family that made their money in manufacturing or that's based in these three cities, etc. And so you want to be dialing that in, and you may want to have two different investor demographics you target, plus a main one for 60 to 90% of your energy and then a secondary one. That's an experiment and you see if it grows legs to it and expands. By focusing most of your energy on one demographic, you'll pretty quickly find out if it was a horrible idea or if you feel the traction and the innate value and people really appreciating the opportunity to look at your deals, then you'll feel that momentum. If it's frustrating hard and you get no progress, it could be the quality of your deal, your communications, other things we're going to talk about within the 17 Modules series. But you want to be focusing most of your energy on one thing. Once that starts working then you can shift the energy and maybe go 50-50 on the next experiment until that starts working and then build niches within your niches. So you can see this within some of the work we do.

10:20

For example, this book we bought. CentiMillionaires.com wrote the first book on Centimillionaires. Same with single family offices. We also spent a lot of money over 12 years acquiring Billionaires.com . That's hitting a certain demographic right between the eyes and attracting that type of professional into us. It's like a doorway for that type of investor demographic.

10:42

So the final comment I'll make here is that everything should be customized to the investor demographic the structure of your investment, the term of your investment, how liquid it is, the income, the tax treatment, what order you brag about, all those great things and how that matters the branding, the one liner for your investment, the website URL, where you travel, what clothes you wear, what vocabulary you use Every single thing should be customized to that through the lens of the three trust curves and by doing that, you'll be more effective and more efficient every day, and that is working smarter instead of working harder, although, as many of you know, the people who are very successful, they are very smart and they work very hard. So I hope you found that valuable. That's module number two on investor demographics and forming your investor avatar. It's part of our 17 module advanced capital raising series called $100 million Rainmakers. We're going to go into module number three next, which is going to be on branding.

Jonathan Tuttle Host 11:43

Hey, it's Jonathan. I get exclusive access to great investment deals, opportunities for my community, my network and just for my loyal listeners. We'll give you first access. Go to AccreditedInvestorPodcast.com and sign up for the email list. Also, join the Accredited Investor Podcast Patreon group where we give you additional exclusive interviews, monthly private group calls and networking with others in this community. Check out accredited investor podcast on Patreon. Finally, I get a lot of people asking to work with them one on one. Yes, I can, but it's very limited. Go to RevenueAscend.com/consulting .For any real estate investing exclusive access, go to MidwestParkCapital.com . All links are included below. Please like, comment, Share this podcast with other friends. Thanks for listening.