Here’s why capital raising looks different in 5 years

The capital raising industry is ripe for disruption.  Third party marketers won’t be displaced…but they should be prepared for real disintermediation.

The JOBS Act is just one element accelerating the process.  Changes in technology, changes in communication strategies and changes in how the people sitting across the table absorb information will all contribute to an increasingly altered landscape. 

The days of the 35 page marketing deck are numbered - there are simply better ways to communicate a message.  Hedge fund advertising and the use of video as lead generation tools are starting to get a bit of attention – but most people continue to brush these off as either novelties, only for emerging managers or simply too risky. 

 Meanwhile, even Citadel has several short, punchy videos on its website. 

 …And video is just the tip of the iceberg with respect to how people will source information.

 Whether you believe in social media and content marketing as a means of building a brand or whether you believe that this stuff is only for teenagers, it is going to eventually consume our industry.  Just like it has done to practically every other industry.  If for no other reason than this – today’s teenagers are tomorrow’s allocators.  And they do believe in social media.

 Most importantly is the changes created by technology platforms.  If institutional investors can find opportunity through P2P sites like Lending Club, they will absolutely find opportunities through portals and marketplaces being created by FNEX, HedgeZ and others.

And even if investors never get that far, it is hard to ignore the noise that GP/LP communities like HFIN One and Trusted Insight are making in the industry.   These are the “LinkedIn networks of the financial industry” - they provide personalized information and allow managers to connect directly with investors.

 I am a huge believer in the value of the personal relationship – but getting that personal relationship is becoming much easier.  And it is being done without the middleman.  

By JD David