Raising capital in 2023 has not been easy.
Public market downturns have led to many would-be LPs being overly exposed to venture, opting to scale back on the asset class and rebalance their portfolios as a result.
As such, finding investors has become more difficult with many tightening their purse strings.
Many venture funds are now having to cast a much wider net, and have more conversations to raise.
Fortunately, technology can help do this for us.
The following three-step approach can help you to build your pipeline of prospective LPs, get your brand and mandate in front of them, build trust, and start having meaningful conversations.
Step 1. Create a Compelling Lead Magnet to Add Value to LPs
To capture the attention of potential investors — be they HNWs, family offices, and so on, venture funds should create compelling lead magnets.
A lead magnet is a valuable resource offered to potential LPs in exchange for permission to engage in a conversation.
Examples of effective lead magnets for venture funds might include:
1. Educational Guides: Develop guides on industry trends, investment strategies, or market insights.
2. Webinars and Workshops: Host online events featuring industry experts to share knowledge and engage with potential investors.
3. Exclusive Reports: Provide access to exclusive reports or research findings that offer unique insights.
Here at SonicBoom we created The Ultimate Guide to Content Marketing for Venture Capital Firms to help build trust and stimulate conversations with our own target market.
Step 2. Use LinkedIn Sales Navigator to Find Target LPs
LinkedIn Sales Navigator is a powerful tool that enables venture funds to identify and connect with potential LPs more effectively and efficiently.
Its advanced search features allow users to filter through a vast network of professionals based on criteria such as industry, location, job title, and company size. For venture funds, this means the ability to hone in on prospective LPs.
In the example below, I’ve simply filtered my search results for people in Australia who work at a family office, of which there are over 3,000.
To make the most of this step”
1. Define Target Personas: Clearly define the ideal LP profile, considering factors like investment preferences, industry expertise, and geographic location.
2. Utilize Advanced Search Filters: Leverage Sales Navigator’s filters to narrow down potential LPs and create a focused list. You might filter using variables such as title (senior investment officers and the like only), geography, and company type.
Step 3: Streamlining Outreach with LinkedHelper
While LinkedIn Sales Navigator provides a powerful platform for prospecting, the outreach process is manual, onerous, and time-consuming.
This is where automation tools like LinkedHelper come into play.
LinkedHelper automates routine LinkedIn tasks, allowing venture funds to scale their outreach efforts efficiently.
Key features of LinkedHelper include:
1. Connection Requests: Automatically send personalized connection requests to identified LPs at scale.
2. Message Sequences: Create and schedule message sequences to nurture connections and share relevant information about the fund.
3. Personalization: Personalize the first name and company name of your target LP prospects.
How it works
You copy the search URL from your LinkedIn Sales Navigator page (those 3,000+ family office prospects we identified earlier) and paste it into your campaign in LinkedHelper.
After you’ve defined your connection request message and subsequent messages, it will automatically send a series of messages to your target prospects over a pre-defined period of days.
The follow-up is usually much more important than the initial outreach, but with LinkedHelper you don’t have to remember to do so. It does it for you.
It’s crucial to strike a balance between automation and personalization. Over-automation can lead to impersonal interactions, potentially harming the relationship-building process.
Fortunately, LinkedHelper lets you personalize numerous fields, such as a target prospect’s first name and company name.
Lead with Value
Instead of leading with a sales pitch, you’ll want to simply share your lead magnet from Step 1 with prospects — this is a much more effective way to engage someone you don’t have a pre-existing relationship with and is much more likely to get a response.
By leading with a lead magnet, you grow your mailing list, and/or open the door for a conversation.
The combination of LinkedIn Sales Navigator with LinkedHelper, and compelling lead magnets offers a comprehensive approach to building a mailing list, enhancing brand awareness, and initiating conversations with prospective LPs.
As venture capital becomes increasingly competitive, embracing these digital tools can give funds a strategic advantage in the fundraising landscape.