Reflecting on the learnings of 300 Equity Crowdfunding raises I thought many of the tools, techniques and especially the transparency could be directly applied to Government asset sell down.
With equity raises there are three aspects that tick the boxes when it comes to getting a fundable opportunity. Of course there are the analytics and supporting documentation for due-diligence but the story is what is repeated from person to person about the opportunity.
A Story told with clarity. It needs to be convincing, compelling and credible. Relevance is also important. The story being pitched needs to be relevant to the supporters of the product, the service, the technology, the team, the geography or for whatever reason they are “supporting”.
An enthusiastic, grounded Team. It needs to be a balanced (Steve Jobs and Steve Wozniak), passionate, capable and likeable Team. Capability is also important. The team must be capable of implementing the story they are selling.
And Supporters who believe in what you are doing. There needs to be lots of suitable people to share the story with and engage with. Credibility is also important. The supporters need to see the team as credible and worthy of their trust. Supporters need to be gathered from far and wide, categorised into their interest groups and nurtured as their journey follows the same path as the transaction.
The diagram below details the relationship of these three aspects.
Often the Rolodex approach is used for gathering investors. The traditional way was to engage someone who has a list of investors and get them to present the opportunity to their “crowd”. However in these days of a connected world gathering an interested group of potential investors from far and wide is a far more certain way to go. This is called “investor aggregation“. Some may be local, some may love the niche, others may just want to do well by the region the opportunity exists in.
Once you have gathered say 600 potential “fans” of the opportunity a couple of hundred of them will take things further by seriously by downloading and reading the information. Of these you will get a dozen or so serious investors. This is pure “investor aggregation” in process.
Often with Government sell downs there is a belief that not all the information is on the table. This is important to use a match-making platform that is fully transparent and the transaction is fair to all parties.
Compliance is also important. Has the matchmaker in the process got a team that will ensure things are handled in a compliant manner.
By having an independent rather than an in-house entity managing this people look at the transaction in a more respectful manner.
Each stakeholder has different outcomes and these need to be aligned if the sell-down opportunity is successful. Some investors want to receive updates regularly while others are only interested in a casual chat occasionally. Stakeholders are important also as they may be locals that are more interested in keeping a business operating locally than the economic returns.
To achieve all of this a matchmaking and compliance platform is needed that is structured similar to the one below. This is an enhancement of a crowdfunding platform especially adapted for sales of government infrastructure and asset sell down.
If you are interested in operating a platform for your asset sell down, or making an investor aggregation platform part of your processes, then please get in contact for more information.