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If you are looking to raise money, private placement leads need to be part of your tool kit.  Every year companies raise more money through private offerings than they do on the stock market.  This is fantastic news for business owners and entrepreneurs because it shows that there is an appetite for off the market deals.  The key is reaching the investors that can participate.

When raising money, it is important to determine which vehicle you are going to use.  The Securities and Exchange Commission offers several exemptions from registration.  By using an exemption you will file less paperwork, spend less money, and start raising money faster.  The most commonly used ones are found within Regulation D.  Within Reg D there is Rule 504, Rule 505, and Rule 506.  Each one of these rules has specific guidelines for who can invest in the offering, with them geared towards Accredited Investors.

When searching for private placement leads, look for accredited investor leads.  These are people that meet the SEC’s requirements for being able to invest in all types of private offerings without restriction.  When you work with accredited investors, you have a better chance of staying in compliance and avoiding issues with the SEC down the road.

You can buy private placement leads from www.accreditedinvestorleads.com.  Once purchased, you need to have a strategy for maximizing your lead list and closing more deals. It starts by understanding the value of your offering.  What opportunity are you presenting to investors and how will it deliver direct value to their lives?  If you cannot clearly articulate that within thirty seconds to a minute, your sales pitch is dead.  Investors need to know what is in it for them first.

After you have explained the value of your specific deal, it is important to discuss the overall industry opportunity and how you are uniquely positioned to take advantage of it. Investors want to know that there is an opportunity here and on the horizon.  It is a good idea to have industry facts and bullet points written out before you make a call or schedule a meeting.  Your job is to be the industry expert and to understand every reason why this particular opportunity can benefit from current industry trends. The more knowledgeable you are, the more confidence investors will have in you and your company.

Cultivate your private placement leads by following up with people.  Once you have made initial contact try to get them excited enough to want more information, request a meeting, or copy of your private placement.  The goal is to keep your leads engaged while you walk them through the process.  Many leads are lost not because the investor isn’t interested but because they weren’t followed up with.  Use a tracking system to document whom you spoke with, when, what was discussed, what the next steps are, and when to follow up.  Continue to cultivate your leads list as you walk investors through the closing process.

 

This entry was posted in Accredited Investors, Reg D, SEC and tagged , , , , , by John Fischer. Bookmark the permalink.

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