95% of private equity firms look exactly the same from the outside. The 5% of firms who are differentiated are the ones who have:
- Identified a niche (e.g. target sector, approach, etc.)
- Positioned themselves as experts in that niche via contextual marketing
So once you’ve identified your niche, what’s the right strategy for marketing your private equity firm in the right context to the right people? The answer is not to expect prospects to find you.
Inbound isn’t the right strategy for private equity
Often, when private equity firms decide the time has come to actively market themselves to prospects, they adopt an inbound mentality. In other words, they take the position that the goal of marketing is to have prospects find you.
While inbound marketing is a good approach for some sectors, it is not for private equity. The best prospects usually aren’t looking to sell their business. Rather, they’re heads down doing great work. As such, to get in front of the best prospects, you have to insert yourself in their lives by placing meaningful messages in front of them.
So rather than adopting an inbound strategy, here is a framework you should live by:
- Hand pick your prospects
- Use content marketing to nurture interest
- Use business development to harvest interest
- Use public relations to provide social proof
Read on to learn about these steps in detail.
1. Hand pick your prospects
The first step in marketing a private equity firm is to hand pick your prospects. Regardless of how you go about this process, you need to start by assembling a detailed list of contacts at prospective portfolio companies. All your marketing efforts should be focused on that list of contacts.
2. Use content marketing to nurture interest
For most of the companies on your curated list of contacts, the timing won’t be right to bring on a capital partner, often simply because a founder just doesn’t feel ready yet.
So until the prospect is ready to have a conversation, what do you do in the meantime? Answer: stay top of mind and position yourself as the most helpful, most experienced, most knowledgeable partner in the space. You can do so by creating content that educates prospects about the private equity space and demonstrates your expertise.
3. Use business development to harvest interest
As you nurture prospects with content over time, you should continue reaching out to them via email, LinkedIn, phone calls, and in-person meetings. Being consistent in your business development efforts will ensure that, when the time is right, you’ll be within reaching distance to pick up a conversation.
4. Use public relations to provide social proof
When the timing is right and the conversations do happen, your PR efforts (think deal announcements, portfolio news, and other major milestones) will cement your position as a preferred partner.
Note that private equity firms often reduce marketing to mere public relations, but PR just fulfills one small aspect of marketing: to provide social proof. In other words, until prospects fully understand what you do, they don’t care what you’ve done. In particular, they want to understand what you can do for them. Once they understand that, they’ll take greater interest in the performance of your firm.
Be in the 5% of Differentiated Firms
Marketing your firm with a strategy focused on nurturing a defined list of qualified prospects is the best approach you can take to improve the flow of your deal pipeline.
To see specific tactics you can apply, take a look at my marketing plan for private equity firms.