5 Myths About Branding in the Investment Industry

Many founders think that branding is a side project to building their business. Buy a logo, pick a couple colors; move on with the bigger, more important things. We get it. But branding is more than deciding what your materials are going to look like. Branding is the set of actions you take to build your brand, and your brand can be thought of as how other people perceive you. A strong brand radiates who you are. Your personality. Your values. What you stand for in your business and what you stand against. It’s also the experience a client gets in working with you. 

A strong brand builds loyalty and makes it easier to connect with ideal prospects and clients. Investors care about your brand because it taps into their emotions and values. And really if all things are equal, your brand functions as the differentiator, what gets an investor to pick your firm over someone else.

Developing a strong brand is challenging, partly because there are so many misconceptions. We’ve rounded up the five most common myths we see frequently in the investment industry. Let’s separate fact from fiction to allow you to create a brand that stands out and helps you find your true fans. 

Myth #1: Performance matters most.

Performance matters, but what we've seen is that performance is table stakes. You don't even get invited to the party unless you have the performance to back up who you are and the fact that you're good at what you do. That said, it's not the be all, end all. No one is going to make a decision to invest with you based on performance or statistics, especially if you're a boutique. 

Big, successful firms have enough data to show off performance statistics. They splash those Greeks, charts, and percentages all over their marketing collateral. If you are a new boutique or fund, you won’t have that kind of data yet so it’s important to level the playing field with qualitative content. You can go head to head with any big firm when it comes to thought leadership and people relationships. 

A study from CAIA surveyed Portfolio Managers and Institutional Investors of all types around the world, asking them, “What is the most important thing, quantitative due diligence or qualitative due diligence?” Would you be surprised to hear that investors said qualitative is as important, if not more important, than quantitative? However, the Managers thought quantitative was far and away the most important thing that investors cared about. That’s problematic because the Manager walks into a meeting thinking that the Investor cares about numbers and stats, and the Investors come in wanting to understand people and process. They want to know if you're the founder and a Portfolio Manager, why did you start your firm? Why did you leave whatever big firm you were at, break away, and start this company? Who are you as a person? What do you believe in? What are you doing differently than where you were? What’s your culture like? How are you incentivizing your team?

Your answers to these questions establish connection and trust, which is every bit as important as performance data.


Quantitative and Qualitative


Action item: Share your thought leadership on social media or your blog (ideally both). Lean into storytelling. Especially your backstory as a founder. How did you get where you are? What was your journey? Why are you here? What are you doing differently than your peers?

Myth #2: Bigger is better. More is more.

Your messaging… Who is it for? Who is the target market? Is it everyone? If so, it’s time to change your mindset. An investment strategy isn't designed for everyone on the planet with capital. The investment world is extremely competitive and the more general your business, the more people you’re competing with. In order for a boutique firm to grow, it’s necessary to define a niche.

When you define your niche properly, not only do you identify a place in the market that’s specific and enables you to serve your true fans, but also a place that differentiates you and even allows you to complement instead of compete with your competitors.

A bigger market is not better. Don’t be a wandering generality; be a meaningful specific.

Homework: Here’s an exercise to niche down. Write down your top 10 investors. The ones where what you're doing is working the best. Where the relationship is great and there’s profitability. The ones who really “get” you. Next, start looking for commonalities across those clients. They could be demographic commonalities or psychographics. What problem are you solving for them? Look for patterns so that you can start identifying and defining your niche. 

Myth #3: My pitch is perfect. 

Here’s a scenario we see often:
Boutique: I just need more meetings with investors.
Us: Are you winning the meetings you’re in?
Boutique: No, that’s why I need more.

Let’s take a step back. Scheduling more meetings for you to repeat what’s not working is not a winning formula. Maybe the pitch is perfect but it’s being delivered to the wrong person (which ties back to defining your niche). Or maybe the pitch isn’t perfect. Odds are it’s a little bit of both, but the biggest issue here is usually that the 80s called and they want their pitch back. (Ha!) 

The old way of selling was to call up a prospect, sit them down, and deliver some jam-packed presentation until time ran out. The hero was you; your pitch was all about how great your performance was.

That's dead. It’s old school. It kicked the bucket. RIP pitching.


RIP Pitching


You sell by serving. The investor is the hero. You are the guide. The investor is Katniss and you're Haymitch. (Hunger Games fan, anyone?) Or the investor is Luke Skywalker and you’re Yoda. Think of whatever movie you want; there's always a hero and a guide. You are the guide. So instead of pitching about you, change your mindset to how you are helping that hero get where they want to go.

That investor is trying to solve a problem or harness an opportunity, and they are looking for a guide to get them there. That's the conversation.

To do: Review your messaging. Have you made your client the hero? What problem are you solving? Why should they pick you as their guide?

Myth #4: LinkedIn is a waste of time.

All social media can be a waste of time. Depending on how you use it. The key to using it correctly is to 1) hang out where your target market is (here’s where we point you to LinkedIn); 2) serve; and 3) connect person to person.

The real magic of LinkedIn is the connection that happens between people. So while your boutique should have a LinkedIn page for people to follow, it’s important that you connect with others as an individual. This requires commitment. You can't just go on LinkedIn to post and ghost. In real life, we don’t have a one-way conversation, walk away, and feel connected… so you can’t act that way on social media either. Connect, serve and engage.

LinkedIn Quick Start: Connect with prospects, clients, people that you've worked with on LinkedIn. If they are active, begin engaging with their content. And we don’t mean just hitting the Like button. Leave authentic, thoughtful comments. 

Related blog post: How Investment Boutiques Can Get Active on LinkedIn 

Myth #5: Authenticity is not professional. 

We are often met with a look of terror when we talk to Portfolio Managers about authenticity so let's define the word. According to Brené Brown, who gave one of the most popular TED Talks in history, and on this very topic, the definition of authenticity is the daily practice of letting go of who we think we’re supposed to be and embracing who we are.

Our industry hasn’t done a great job of encouraging us to be our true selves. Everybody wears the blue suit and the red tie to conferences. There’s the right bag to carry, the right shoes, the right watch. The pretend golf swing. The buzzwords. Again, that’s the old way.

RIP cookie cutter conference persona.


RIP cookie cutter conference persona


The reality is we are more than our nine to fives. If your brand is only about what you do, i.e. “I invest in equities, period, the end,” you’re going to put a lot of people to sleep. When creating your brand, it’s important to think about what you want to be known for. And perhaps that is equities, but what else? Challenge yourself to think about what is unique about you and your firm. What are some topics that are important to you that you can connect with people on? What do you do when you are at your desk - what hobbies or passions fill your five to nine?

Side note: It’s fine to put boundaries around what you don't want to share. You’re not required to share everything about yourself in order to be authentic.

Our founder, Stacy Havener, is all about 90s rap. Maybe that sounds like an odd thing to talk about when you're raising money. But it turns out a lot of investors also like rap music, and when she drops a lyric from a rap song into a post, it’s incredible to see the response. It’s authentic, it’s unique (you don’t come across rap lyrics in most LinkedIn posts and definitely not in the investment world), and it builds connection.

Give your business a face, heart, and soul.

Your brand is more than your look and feel. It’s how you’re perceived; it’s the differentiator between your competitors and you. That’s why it’s so important to dispel these five myths our industry has perpetuated. To wrap up, here’s how you can strengthen your brand:

  1. Tell stories instead of spitting out stats.
  2. Niche down and speak to a very specific market.
  3. Make your client the hero and guide them to solutions to their problems.
  4. Connect with and serve your true fans on LinkedIn.
  5. Share your authentic self.

We’re cheering for you, Rockstar. Ready for the next step? 


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