How To Sell An Idea To Smart Money
One of the most common ways to become wealthy is to come up with an idea that requires capital (such as buying a building or a company) and pitch it to a sophisticated investor.
If the investor wants to back the idea, the pitcher may get a piece of the action for coming up with the idea and seeing it through. This is the same as a ‘carried interest’ in the private equity world.
I learned this lesson from Fred Wright, a legendary Canadian investment banker, a few years ago when I asked him for advice on creating personal wealth.
When I sought Fred out for advice few years ago, he told me his secret to institutional sales. His advice was this: “Never presume to know what smart money thinks is a good deal. Just be humble, say why you like it, and present your facts. They will always make their own decision.”
I took this advice to mean if you’re genuine enough, your buyer may appreciate your approach, and eventually become anchored to your success. At the least, he or she will have enough patience to hear you out and give you valuable feedback.
Fred’s advice applies to selling almost anything to a sophisticated buyer, not just private equity investments. Just be straight, and don’t pretend to know everything, especially not the appetite of somebody who manages money professionally.
If Fred Wright, one of Canada’s most respected financiers, doesn’t presume to know someone else’s deal criteria, Tommy Humphreys won’t either.
Neither should you.