A golden rule of marketing investment opportunities

Last Friday, Xiaofang and I had a consulting session with the promoters of a hotel development project in the Mediterranean. The focus of the session was a fundraising which had stalled for a number of months – the clients needed around £30 million to complete the development.

One of the ‘golden rules’ for marketing investment opportunities, is that you need to create a compelling reason for people to want to invest in your project, over all other possible options, including the option of doing nothing. This ‘reason’ is rarely the projected returns – if it is, the returns are usually at the expense of the promoters’ margins. Which is the equivalent of selling your products at bargain basement prices – it may generate short term cash, but it’s unlikely to get you where you want to be in the long run.

The regulatory disclaimers you see in prospectuses or information memorandums are completely necessary, but you can’t allow them to obscure your ‘reason’. Similarly, investment overviews which focus only on numbers and ‘cold facts’ are unlikely to achieve the best results. And the usual platitudes about ‘quality developments’, ‘rigorous appraisal methodologies’ and ‘decades of experience’ etc etc just won’t cut it, because that’s what everyone says.

For the Mediterranean project, our clients actually already had a unique set of ‘reasons’ – they just needed help in remembering them: their personal story of how and why they chose that particular location, the absence of competing hotels in the area, government support for the project, plus access to indefinite leave to remain in the UK (for Chinese and other overseas investors) through an accelerated visa programme.

If you or someone you know might benefit from a consulting session regarding an investment opportunity (particularly for Chinese investors), we would be happy to help. Email Sonia Polden at sonia.polden@lcnlegal.com to make the arrangements.