by Adam Gruver, MMX Management
I’m curious, do people actually enjoy running marathons? It looks really horrible.
I have to assume that most folks that sign up for a marathon know exactly what they are getting into. They train for months with endless daily runs that are designed to prepare them for the grueling nature of the race. People go into these things thinking they are going to push themselves to their limits, aiming to accomplish something that may not have seemed possible.
Raising capital is eerily similar to running a marathon, but most alternative asset managers aren’t even close to prepared to embark on their own “race.” Managers tend to assume their pedigree, previous track records, relationships, and a myriad of other factors will all combine to help capital simply fall into place. Managers have trained themselves for a sprint. Most groups raising assets, by mindset alone, have already set themselves up for failure.
I’ll adjust my previous statement; raising capital is exactly like running a marathon.
It takes much more time than expected (I’m talking years, not months), extremely dedicated preparation, long hours traveling and meeting prospective investors, a LOT of failure, and the right person (or more ideally, people) guiding your business development and marketing initiatives. Your actual business, not your investment strategy or even performance, will ultimately make or break your success.
For most managers trying to grow assets, the experience, just like running a marathon, can be really horrible. It doesn’t have to be. Set realistic expectations, make sure prospective investors clearly understand your value proposition, expect failures, and realize today’s capital raising environment generally requires a ground-and-pound approach. Most importantly, find the right team to help you.
We’ve been running these marathons for years, and although tough to admit, it has become a lot of fun.