Private equity may have the word “private” in the name, but these firms can’t remain completely behind closed doors.
Although mostly self-sufficient, when private equity firms seek human capital and new deals, they must bring attention to themselves. They can do this with fundraising and public relations, sure, but also through marketing.
What exactly is this?
Private equity marketing is a means of digital marketing that seeks to achieve goals for firms in venture capital and private equity. These goals may include closing more deals and even finding investors.
In this comprehensive guide, we will explain the many strategies that private equity firms can utilize to grow their business. First, we’ll expand on the definition, then delve into the appropriate target audience, and finally, share some marketing tactics for private equity and venture capital firms.
Let’s get started.
- What Is Private Equity Marketing?
- What Are the Target Audiences?
- Marketing Types and Tactics for Venture Capital Firm and Private Equity
WHAT IS PRIVATE EQUITY MARKETING?
Instead of necessarily pushing people to buy a product (which is a mismatch with private equity), this strategy is more about achieving a firm’s goals. For instance, those goals could be promotion or image-building, in which more traditional marketing and PR tactics would apply.
Another way that a strategic marketing plan can assist your firm in meeting its goals is through boosting the rate of deals. Your firm needs a continuous flow of new deals and professional relationships to keep yourself afloat. Through building a list of prospects and then targeting them, you can bring in new leads in which to make more deals.
Having capital is another necessary pillar to your private equity firm’s success.
Networking and fundraising are two activities you probably engage in often, but you always feel like you could be doing more. You can identify which investors or partners may be the most likely to donate capital to your firm. Then, you can forge professional relationships with them.
Marketing tech really comes in handy here, especially for targeting and personalization.
WHAT ARE THE TARGET AUDIENCES?
Now that we’ve talked more about what it is, we want to discuss target audiences to focus on.
Companies That Seek Funding
There are two groups that can be targeted:
Those who need funding and those who can provide it through investments.
As your firm is all about building professional relationships, you’re always striving to work with new startups and businesses that could use a leg up. In helping these companies through your private equity services, you can have more deals and build your portfolio. That drives you even more business, which continues snowballing from there.
In your marketing campaign, you can identify and create a list of these fledgling companies you might want to work with. Then, you can apply values or a score that dictates which companies would be the best fit. We’ll discuss more about leading scoring later in this guide.
For now, we’ll say that it’s a great way to find the most lucrative matches to work with.
Individual Investors or Partners
The other part of a private equity firm’s target audience is those who can give money to keep the firm chugging along. These parties are referred to as investors or partners.
You will likely work with both general partners and limited partners in your private equity firm.
Limited partners are those who provide funds of funds, company capital, pension funds, university endowments, and other forms of capital. These people could be associated with certain schools or companies. In some instances, they’re people with no affiliation to private equity who have a lot of money and want to give it to a firm.
The money moves from a limited partner to a general partner, who oversees cashflow.
These partners may also be responsible for maintaining portfolio companies (those companies acquired through the investment firm) as well as driving investor-related decisions.
MARKETING TYPES AND TACTICS FOR VENTURE CAPITAL FIRM AND PRIVATE EQUITY
If you’re considering hiring the services of a marketing company for the first time, you may wonder what they can do for your firm. What would the campaign look like? Which methods and tactics will they use to drive success for you?
Here is an overview of the marketing tactics and services for venture capital and private equity firms.
While private equity is an industry about money, just to reiterate, professional relationships are the backbone of that industry.
Without companies in which to invest in, a private equity firm’s portfolio remains empty. Without investors and partners to give capital, a private equity firm’s money can only go so far before running out.
Building relationships with clients and investors has become easier than ever thanks to social media. For instance, private equity firms can use social media platforms like LinkedIn, Facebook, and even Twitter to vet a small business or startup they might invest in. They can learn more about this company and not only see how the company interacts with its customers, but visualize the room for potential growth as well.
Just as importantly, social media can be a great way to maintain a professional bond with investors or potential investors.
Again, there’s the vetting process through social media, but it goes further than that.
Investors and partners who are comfortable with where they put their money may talk more about the investments they make on social media. They’re not leaking proprietary information, of course, but rather, they’re discussing the companies they may have chosen to give their money to.
Not only does this present room for a potential boost in name recognition, but being more frank in this manner can increase the sense of trustworthiness and expertise you may have for this investor or others.
In trying to court investors, having an exemplary website is a must for private equity firms. This website serves a double purpose, as it can boost the name recognition for your firm as well. That alone can sometimes be enough to draw new deals to your door.
A cleanly designed website is crucial here. Due to the nature of your company, refrain from a lot of design bells and whistles. You want a bio or about section that clearly spells out the history of your firm. You should also have a section highlighting the portfolio companies you have acquired over the years.
This isn’t necessarily about how many big names you’ve helped, but more about the breadth of your work over time.
Your website should also have a blog – which we’ll discuss more in the section about content marketing. Still, an updated blog is a trademark of any website worth visiting. Don’t forget to add links to your social media profiles, too.
Today’s marketers don’t always focus on search engine marketing or SEO as much as they once did; it can differ on a case-by-case basis.
In the industries of private equity and venture capital, though, SEO is not something you want to gloss over. Whether you prefer the search engine giant Google or a smaller engine, showing up at the top of the results page is the ultimate goal here.
If a potential investor has to dig through pages and pages of results to find your private equity firm, they might never get to you. They could stumble upon another firm on the first page that’s more convenient to give their money to, leaving you in the dust.
That doesn’t mean you should just post whatever content springs to mind in a vain effort to get your name on the first page of search results. In fact, that’s the exact opposite way to go about it. Although Google algorithms are always changing, today’s algorithms are very intelligent.
Google can tell which companies are populating the web with legit, meaningful, valuable content and which are using outdated SEO tactics to get to number one.
If you curate your content, then you can ensure you have more of a say in what’s associated with your firm’s name when an investor searches for you.
Speaking of generating content that can enhance your positioning in search engine results, content marketing is a big part of that. Besides putting on you on the first page of Google, this form of marketing can help in several other ways.
Content marketing and social media marketing go hand in hand.
The content you produce can get reposted and spread across social media to drive more traffic to your website. The same goes for email marketing, which we’ll talk about in just a moment.
You can also use content marketing to establish your private equity firm as a thought leader in your industry.
When you post valuable, shareable content with authority, others can’t help but want to spread it around. This good publicity can get you seen online by investors and other potential clients.
There’s a misconception that content marketing has to exclusively be the written word. That’s not true at all. Content encompasses many forms these days, including infographics and even videos. Video updates strip back the veils that enshroud private equity firms, revealing their staff as real, everyday people.
That can appeal to investors in a big way.
Whether you’re searching for companies to add to your portfolio or partners to support the cause, segmentation will help you find the exact fit you want. Having a list of all potential clients is the way to start this segmenting. Then you can do something we touched on before: lead scoring.
With lead scoring, you give each potential client a point-based score depending on their behavior, good or bad.
For example, if an investor opts into your email newsletter, you’d give them points. If they open your emails and click a link in those emails, they’d get more points. Should they unfollow you on social media, you’d deduct points.
Through lead scoring, you end up with a list of the candidates with the most potential. Working with only these parties prevents wasted time on both your end and the investor’s.
Another major facet of private equity marketing is email. Your firm maybe wouldn’t email as often as retail companies do that are eager to sell, sell, sell, but your messages should always be something to look forward to. Monthly or even quarterly, you should prepare an email newsletter that goes out to your portfolio companies, partners, and potential investors.
In the newsletter, you’d fill in these parties about the goings-on in your private equity firm.
Private equity marketing is a form of marketing intended for private equity and venture capital firms. Through measures like email marketing, social media marketing, SEO, content marketing, lead segmenting, and website design, it’s possible for private equity firms to find new deals and partnerships for funding.
By: Frank DePino
Frank DePino is Principal and Founder of Mediaboom. Since 2002, Frank has led Mediaboom’s award-winning staff of creative and technical professionals building the most effective marketing and advertising solutions for its clients.