10 Tips for Finding Investors in Your City
Many times I am asked how to find local investors in a specific city or region. The question takes a few different forms, whether it is an executive raising capital for his private business, a family office looking for co-investors, investor relations professional looking for LPs, or an entrepreneur seeking funds for her new business start-up. While we offer a number of services and resources aimed at helping these professionals improve their marketing and capital raising strategies, I wanted to share a few free tips on how you can identify potential investors locally.
- Pay attention to your surroundings. Is there a new building going up in your area? Did a corporation just secure incentives from the local government to relocate its headquarters? Right now, I’m looking out my window at a multi-million dollar real estate expansion (and there is a similar development project behind my building. I noticed a new company moved in on one of the floors of our building and there are some potential synergies between our businesses. I’ve met many professionals during the project that have given me insights into the project, what impact it will have on the area, and who was involved in completing the deal.
- Stay current on local events and news. Beyond simply keeping your eyes peeled for investments, projects, ongoing deals, and potential partners, you should stay informed on what is happening through the local news and local trade publications. Every day I review the Finance Times or Wall Street Journal and I have someone from my team scan the state’s and city’s local paper. This only takes 10-15 minutes a day to do, as I only stop to read the articles which can impact my business and the families I work with most directly. In the state paper for example, I learned about a very wealthy shipping magnate through an article on his sports team. That’s useful information and, because the sports team is minor league, I likely wouldn’t have read about it in the Journal or from Bloomberg. In the weekly city papers, I learned about a global company seeking incentives from the city for a massive expansion on the outskirts of the city. That’s a big business event and another example of a story that probably wouldn’t make the national news.
- Local investors might not identify themselves as investors. If you ask an angel investor or a part-time venture capitalist what he/she does for a living, I’d be surprised if you hear “I’m an investor.” More likely, you’ll hear responses like an entrepreneur, retired executive, CEO, attorney, banker, doctor, and so on. Interestingly, many of these same people are very active investors, they hold several real estate properties, have seeded multiple companies, allocate to alternative investment funds, or own a large stake in a business. But most people don’t think of themselves as investors first and foremost, so you should really tailor your approach to a specific segment or appeal to the individual. One alternative approach would be to ask, “Do you know any professionals who would be interested in partnering with my firm on a downtown real estate project?” This is a minor tweak but the change now opens the inquiry to all professionals (most of your contact’s network should meet this classification) instead of only investors, which is defined by most people as professional investors who focus most of their time on allocating capital. In a city like Phoenix, Portland, Raleigh, you’re more likely to find people are known for an industry or an area of investment, than as a general investor. One wealthy individual or well-known family might own a large group of properties in the area, or a sizable commercial real estate building, and if you make sure to be specific in what you are looking for, your contacts will have an easier time matching your request with someone they know locally who has experience investing in a downtown real estate project or might have a personal or business interest in developing that area.
- Be known in your community. If you have followed my past work you know that I am an advocate and practitioner of identifying a niche area and providing so much value there that investors within your niche globally reach out to you cold every week. To attract local investors I recommend something similar, if you feel like no one in your city is investing capital or funding projects, you’re most likely spending your time in the wrong crowd. In every major city, there are developers, investors, bankers, and executives who fund projects, open new offices, execute multi-million dollar deals, and otherwise engage in investment activity. The key is to make sure that you are known in your community, meaning that you attend local events, support causes that you and your peers care about, build relationships with the local power players, and make sure that you build a strong Rolodex (forgive the anachronism) of local contacts that you can call on to facilitate introductions, schedule meetings, and ultimately partner or invest with you. Our team spends a great deal of time traveling to major cities like New York, Singapore, Miami, and other top investor hubs, but we make sure that we aren’t a stranger to our local community and that our executives are known.
- Start a local networking group or chapter of a larger association. Many associations like the Association for Corporate Growth have chapters in different cities where members meet, network, explore business opportunities, and share resources. If there isn’t a relevant association chapter, you can either create your own or form your own networking group in whatever focus you like. LinkedIn.com makes it easy to create a group or you can simply invite members to a small networking event at your office or local coffee shop. Many people underrate others’ willingness to network and build relationships but the majority of professionals are looking for new connections, too, so take the first step with a new chapter or group.
- Search LinkedIn for local professionals by a city. One of the most underutilized valuable features of LinkedIn is the ability to search by city and location and then filter those results further with other qualifiers such as keywords, occupations, or industry. If you’re looking to build your network locally, LinkedIn is a great resource that makes networking incredibly easy.
- Use your state’s business registry. The beauty of government licenses is that most companies have to register with the state and that information is usually publicly available. For example, in Florida, thanks to the Florida Department of State’s Division of Corporations, you can visit the site to find corporations registered in that state. Most states have similar registries that are useful for identifying local businesses and the executives that run the firms.
- Use regulatory databases. The Securities and Exchange Commission maintains a database of investment firms and you can search by zip code to find local firms, investors, and potential business partners. FINRA, the securities professional regulator offers a BrokerCheck resource that allows you to look into business partners and whether there are any important events in their investment career. These can be helpful as you comb your state for other individuals who are active investors and would be good relationships to develop.
- Identify Power Brokers. Every city has their power brokers, the most recognized business owners, political figures, and wealthy business professionals who can influence others very quickly. If you can set up a joint venture or partnership with 2-4 of these power brokers and give them unfair economics in a partnership (unfair to you, very fair to them), you may be able to speed up your ability to raise capital for the co-investment round, real estate project, or fund that you are raising capital for.
- Search for local investing clubs. Even in relatively small cities, there are often investment clubs or angel investor networks that meet regularly to review investments, listen to elevator pitches from local entrepreneurs and businesses seeking capital, and trade insights on allocating capital. If you invest yourself then you might consider joining one of these clubs and then you can recruit other members to join, too, so you continue to build your local investor network. I’m surprised how many people ask me if I know any angel investors in, for example, Portland, Oregon. By simply googling “Angel Investor Network Portland” I find 3-4 local groups, but most people overlook simply searching, thinking that investors are hiding or exceptionally private.
I hope this list of 10 tips for finding local investors gave you some ideas on how to find investors near you. If you’re looking to meet investment professionals, investors, and business executives, join us in several top cities this year for our capital raising workshops, networking breakfasts, and investor conferences. www.FamilyOffices.com
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