July 22, 2021

JF2515: Top 5 Best Practices for Effective Investor Relations | Actively Passive Investing Show

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In this episode of the Actively Passive Investing Show, Travis Watts lays out the top 5 best tips for good investor relations. He discusses one of the main pieces of information syndicators don’t talk about (and why you should), how to be more attractive to investors online, and what you need to be doing before going out and raising capital.


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Travis Watts: Hello, Best Ever listeners. This is Travis Watts, your host of The Actively Passive Show. Theo is out today on a break, so you’ve got me, and I figured I’d do a really short solo episode on something that kind of baffles me that we’ve never covered on the show. It just felt right to do it as a solo episode, and I’ll tell you why here in a minute.

The topic is The Five Best Tips for Investor Relations. So at the end of the day, yes, I’m a full-time passive investor; that has to do with my investing preference of where I place capital. But on the active side, I am Director of Investor Relations, and prior to doing that, I created an investor relations platform for a syndication group, and prior to that, I worked investor relations with Fidelity Investments. So investor relations is really kind of my world, at least on the active side. So I felt like this could be a really powerful beneficial episode for both passive and active investors, and I’ll tell you why.

If you are an active investor – we’ll start with that – it’s pretty obvious, you either have to be Investor Relations yourself if you’re going to be a one-man or one-woman show, or you’re going to have to hire someone for Investor Relations. So this, without a doubt, will be helpful for those folks. And on the passive side, you need to know what type of group you’re working with. As a passive investor, who is the communication source? Are you talking directly to the general partners? Are you talking to an investor relations rep? How many do they have? What questions might you want to ask them? And are they in the know? Are they following some of these best practices, so to speak?

So that’s just my take on it by the way. Speaking with thousands of investors, this is just kind of a quick five best practice recap, in my opinion. So certainly not to say this is all you need to do, and there’s certainly a lot more we could talk about… But I’m going to keep the episode short, and that is the topic of today.  So I’m just going to knock into it here, right off the bat with the takeaways…

The first thing I would say, to active and passive investors in relation to Investor Relations – make sure the investor relations rep is discussing the good and the bad in the conversation… Because it’s all too easy for us – and of course, I’ve been guilty of this, everybody has – to speak about the positives and the best-case scenarios and “Wow, what a strong past performance track record we have blah, blah, blah.”

Everything you read and see, obviously, is going to show you the highlights of the best, and it’s going to try to paint the picture for what things could be. But make sure if the investor relations rep is not bringing it up on their own, that you bring it up. “Have you had a deal gone bad? What if interest rates double? What if – blah, blah, blah” Make sure that you have those conversations and that there is an answer to them. I’m not saying there’s a right or wrong response to those, just that they’ve thought it through and that they’re willing to talk about it and not shy away from it.

You can create a lot of skepticism among investors if all you ever do is talk about the positives. And some of the first podcast I ever did where I was a guest speaker, talking about passive investing, was just that. It was, “Oh my gosh, it’s great, and it’s this, and it’s a benefit, and it’s a pro.” And then eventually, I did that a couple episodes, and one of the hosts stopped me and says, “Wait a minute, wait a minute, wait a minute. It can’t all be good. It can’t just all be rainbows and butterflies here. Tell us the real story.” And it really got me thinking, “That’s true. I really need to give the other side of the coin in fairness, to promote transparency.”

So that’s number one, discuss the good and the bad. Listen for that. Look for that. Do that if you’re in that kind of role.

Break: [04:14] to [06:15]

Travis Watts: Number two, be visible. I would say it’s not a great idea if you’re active and you’re new to this space to just go out and start trying to raise capital and promote a deal if you have no presence on social media, you have no website, you have no blog, you have no podcast, you have no thought leadership platform. If somebody goes to Google, types in your name and nothing comes up, I would say there’s probably a mistake, because limited partners like myself, we do due diligence. We look up firms, we look up people, we’re are trying to read between the lines, figure out who is this person. I like to watch people do speaking presentations and talk to an audience, so I can try to read their character. So you’ve got to get out there, you’ve got to be visible.

And also on that note, I know there’s a lot of people and/or firms in the syndication space that maybe they prefer one social media outlet. Maybe they’re very heavy on Facebook; they’re posting every single day on Facebook, everything’s on Facebook, their blog’s on Facebook, their video’s on Facebook. But what about all the investors who are on LinkedIn and they don’t do Facebook? What about all the people watching YouTube that don’t go to Facebook?

So I would say this – put a little bit of content on as many outlets as you can, versus putting 1,000 posts on only one outlet, that would be my take on that. So be visible; you’d be surprised to get people reaching out all the time, “Oh, I saw this Instagram post you put up, and that was like a year ago or whatever it was.” Or “I heard you on so and so’s podcast” and that was not even a recent thing. So be visible, be a guest on people’s podcasts, maybe launch your own podcast… It really depends on you, your strengths, your time commitment etc., but be visible nonetheless.

Alright, number three – professionalism. So a lot of newer groups reach out to me because now I’m kind of known as the passive investor guy in the space… So syndication groups that are newer will reach out and say, “Hey, can you take a look at our website?” or “Can you take a look at our slide deck or our company prospectus or our deal overview? Tell me what are your thoughts from a limited partner investor.” They want to make sure obviously that they’re putting out something that’s going to be marketable, that’s going to be competitive, and they’re looking for me to tell them red flags. And I’m happy to do this stuff by the way. I think it’s great, and I appreciate everyone who has reached out to do that.

It always gets back to professionalism though… I’m telling you, almost everything I look at, especially from newer operators – I find typos, glitches, generic Google pictures that are blurry in there… It looks like oftentimes it was made on PowerPoint. And that can be fine if it’s made on PowerPoint, but use professional templates, professional-looking fonts and just don’t get too weird with it. And the average overview for a deal is probably 30-60 pages long. I can’t tell you how many have been sent to me that are five pages. “Here’s our company. Here’s our deal. Here’s the data. Here’s the Contact page.” Don’t do that, be professional. Look at some groups that are doing it successfully in the industry and mimic, to an extent, what they’re doing. Look at their templates and their professionalism.

Also, when you have calls with investors, if you’re going to be an investor relations rep or anything even related, what you say and how you say it matters a lot, and first impressions, the old gold standard, they go a long way. So when I do calls with investors – if you guys are tuning in right now on YouTube, you can see me, but I’m usually wearing a buttoned-up shirt or maybe a sport’s coat, and I’ve got my hair done and stuff, I don’t have chaos happening in the background. Use a green screen or something if you have to; buy a professional microphone.

But I’m telling you, I’ve shown up on these calls and I’ve had people apologize for showing up in their T-shirt and shorts, because — I wouldn’t say I’m dressed up, but I’m professionally set, I’ve got a lighting kit going, all this kind of stuff.

So you don’t have to take it too far, you don’t have to be in your tuxedo or whatever taking calls, but be industry professional, I would say.

Any communication you have, anything you write or post online, your videos etc., remember your demographic, which is what we’re going to talk about next. Who are you really presenting to? High net worth, high-income individuals. Don’t you think those individuals most often, they buy into that. They’re doctors, so they have to wear professional-looking wardrobe, they have to speak professionally, they don’t have typos and errors all around their office and on their paperwork… So they look for these things. So you don’t want to be a red flag to them.

So let’s talk about that. Let’s talk about target audience. Funny story. Years ago, I was just getting into public speaking, and I wanted to start with some smaller events. I had a buddy in Orlando and he was doing a local real estate meetup group, and I said, “Great. Real estate investors, Orlando, that’s where I live.” So I said, “Okay, let me help you with it. Let me kind of co-sponsor, I’ll co-speak, I’ll co-promote… Let’s do this.” So I can’t tell you how much time I put into this. It was quite a bit. But I marketed this event, we got a whole bunch of people to fill seats, we found a venue, we rented things out, we brought in food and water etc. I made a PowerPoint presentation, polished it off, dressed up nicely, showed up, had rehearsed this thing 100 times, came in and literally just killed it. It was great. It was a great presentation beginning to end, audienc is clapping, and it was a great deal. I thought, “Man, this is awesome. I crushed it.”

Well, only one problem. Not one person in that audience was an accredited investor, as it turns out. As we mingled afterwards and we had our list of attendees, not one person was accredited. And what I was ultimately trying to do is network with accredited investors.

So lesson being, know who your audience is, know what they do, where they hang out, what they like, and get in front of that audience the right way; it saves you so much time and energy. I see so many ads for syndication stuff, and I just think, “Man, they’re kind of missing the target with the message.” So maybe hire someone, a consultant or a marketing director or whatever’s in your budget. If nothing else, when you have an idea that you’re going to post or something you’re about to put a lot of time into, run it by three, four or five people in your network and just see if they think that’s a good idea. Maybe you could do that for free.

Break: [12:34] to [14:42]

Travis Watts: Number five, wrapping up here, is respond quickly. It’s something I pride myself on, it’s something I pride other people on. I very much respect when I’m an investor and I’m looking to invest in someone’s deal, I send an email, because let’s say they just had a webinar last night, and the next morning I say, “Okay, I watched the webinar. Here’s my three questions” and I get a response back or I get a phone call. That’s another thing. If I make the phone call, do they answer their phone? Okay, if they don’t – fine. Do they call me back? Same day? No. Next day? No. A week later? You’re looking for these things as red flags as a passive investor. And if you’re active, I can’t tell you how important it is. There’s a fundamental concept here, it’s that it doesn’t matter whether you are ready to pitch your deal to somebody or you’re ready to do your presentation. What matters is when the customer is ready, when the investor decides, “Yep, I’m going to put 100k into this deal,” and then they send you an email or call, you better be on it; that’s money burning a hole in their pocket. And if you’re not going to be responsive or give them what they need, they’re just going to find another deal and park the capital there and say, “Sorry, missed out this time, maybe next time.” And that’s a huge deal. So even if you prefer working Monday through Friday or whatever, I would say be open on the weekends to texts and emails, especially those urgent like, “Hey, I’m looking to invest. I just have a couple questions,” or “Where do I send my funds?” If you get that on a Friday, don’t put it off till Monday; respond to that as fast as you can. It’s a form of professionalism, first of all. It’s unprofessional to blow people off and not respond. It is professional to get back with people in a timely manner.

So that’s pretty much the five recaps, if I were to pick five, that I feel are very important, that have proven themselves over and over to me.

And the last thing I’d say kind of in closing and in recap is just be adaptable. This goes for anything in life, but adapt. Rapid changes in today’s world with technology and new social media platforms coming out, COVID happened, you’ve got to be adaptable. Before COVID, I was going to in-person face-to-face conferences and real estate meetups nationwide. That was like my whole gig; week-to-week, that’s what I did. And all sudden, no conferences, no face-to-face. I had to be adaptable. I had to pivot; when one door closes, you have to pivot and look for another door. So something to keep in mind.

One of my mentors years ago told me, “Double down on what works.” So as you’re experimenting with all these things, you’re posting on Instagram and Facebook and LinkedIn and BiggerPockets, if something starts working, if you start getting a response out of it, double down; post more there. Don’t exclusively go to it, like we talked about; still post a little everywhere, but double down on what’s working.

So I appreciate you guys tuning in. Hopefully, found that helpful. Again, this is Travis, Actively Passive Show. Theo, will be back next week. This was just kind of a biweek, so I thought I’d do this solo episode. Thank you guys so much for tuning in. If you have any questions, send them to theo@joefairless.com. We’ll see you next time.

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