How to Use Branding to Maximize Private Equity Deal Flow

Boosting your private equity deal flow through branding may seem relatively abstract. But founders choose to work with one private equity firm over another for the same reason that tired travelers prefer to stop at Starbucks over Arabica: it’s credible, familiar and they know exactly what to expect. All of these qualities can be infused into your brand, regardless of whether you’re a private equity firm or a well-known coffeehouse chain. 

Private equity brand strategy is a long-term commitment, not a quick fix to earn more deals. Even Starbucks was in business for three decades before it became a household name nationwide. Reaping the rewards of a strong brand takes time because there’s much more to private equity branding than just your firm’s logo and website.

Consider the following aspects that constitute your brand:

• Identifying the key differentiators that make your firm unique

• Communicating those differentiators in a way that resonates with your target audience

• Having a deep understanding of your audience’s needs and desires

• Developing core values that are as relevant to the C-suite as they are to the intern at one of your portfolio companies

• Setting standards of service and consistently delivering on them

• Demonstrating time and time again that your brand is exactly what it claims to be

• Establishing visibility in your industry, community and beyond

By dedicating the time, energy and resources to your brand strategy year after year, your private equity firm can ultimately become a top-of-mind industry thought leader in the areas you serve and, in turn, attract more founders to your firm.

How Private Equity Marketers Can Leverage Their Firm’s Brand to Attract Founders

Like any consumer, founders want to work with private equity firms that are credible, familiar and have a consistent track record of positive results. Your branding should make them feel secure and give them a clear idea of what to expect if they were to partner with you. Here are a few considerations to keep in mind as you’re developing your firm’s brand:

1. Establish Your Firm’s Credibility

Credibility isn’t easy to come by. It can’t be bought or faked—only earned through results that are consistently delivered over time. The credibility of your firm boils down to these factors:

• Experience: Emphasize the experience and expertise of the leadership team. Highlight the backgrounds, achievements and industry knowledge of key executives to showcase the firm's competence and depth of leadership.

• Transparency: Timely and honest communication fosters trust. Clearly articulate your firm's investment strategies, objectives and decision-making processes. Especially when negotiating a deal, maintain transparent and open communication with stakeholders. Every time your firm delivers on its promises, stands by its values and owns its mistakes, you build credibility with your stakeholders.

• Affiliation: Just as patients trust board-certified doctors, founders trust companies that are affiliated with well-respected associations, conferences and media outlets. Actively participate in the organizations and events that matter most to your target audience. Joining your local chamber of commerce, speaking at conferences or contributing to a leading business publication, for example, are great ways to make your firm a part of something bigger—in turn boosting its credibility.

2. Build Familiarity with Your Brand

Founders are more likely to seek investments from private equity firms that are recognizable than from an obscure brand they found in the margins of a Google search. It’s not enough just to rank on page one for a few search terms or to run a generic LinkedIn campaign every six months. Familiarity with your brand is achieved through repeated exposure of a winning message.

Start by carefully crafting a message that truly represents your brand and touches on a pain point or motivation of your target audience. Then, develop a full campaign around that message that will allow your audience to interact with your brand in different ways over an extended period.

That said, remember that tactics and touchpoints are the easy part when it comes to building your firm’s brand. The strategic difference lies in making sure that the message of your campaign is unforgettable, while also positioning your firm exactly how you’d like it to be perceived.

3. Make Consistency a Top Priority

Your firm’s reputation for consistency—or lack thereof—is reflected in two key ways:

• Content: Stay on top of publishing case studies, sharing testimonials and generating media coverage. These types of content serve as third-party validation that support the quality and consistency of your firm’s services. It also gives prospects a window into what they can expect if they were to partner with your firm. Whenever possible, showcase the founder experience in an engaging way.

• Online reputation management: Actively manage your presence on sites where users can rate your firm or share feedback. When someone writes a review of your firm or comments on one of your social media posts, be sure to respond in a way that aligns with your brand image and values. How you respond demonstrates how your firm interacts with its audience and manages relationships, once again signaling what it would be like to partner with you. Sites you may need to manage can include Glassdoor, social media sits, Google Business Profile and Yelp, to name a few.

What Motivates Founders to Seek Investments

To increase deal flow for your private equity firm, keep your audience’s motivation top of mind. Your branding and messaging must tap into your founders’ innermost motivations for seeking investments or capitalize on one of their biggest pain points in order to truly resonate.

Founders are driven to pursue investments for many different reasons, from the pursuit of increasing revenue and forming strategic partnerships to the desire to move on to the next chapter of life. Motivation may vary depending on a founder’s personal aspirations, industry dynamics, and the stage of his or her business.

Here are some common motivators for why founders seek investments:

• Exit strategy: Founders may seek investments with a long-term view toward their exit strategies. Whether a founder is considering exiting his or her company to retire or start a new venture, private equity provides an opportunity for founders to realize returns on their efforts by preparing their companies for acquisition.

• Accelerated growth: Investments can provide the necessary resources to ramp up production, launch new product lines, increase marketing efforts, hire more talent, adopt new technology and capture market share faster. It can take decades to achieve the kind of growth that a private equity-owned company is capable of attaining in a matter of years.

• Strategic guidance: Beyond receiving an infusion of capital, founders often seek investments because they value the strategic guidance that only private equity firms and consultants can offer. Many founders have never scaled a business before and are relieved to bring in someone who has successfully grown and sold similar businesses. Private equity investors are often well connected, allowing them to introduce founders to important players in the industry and open doors for collaboration that can fuel business success.

• Concept validation: Securing a private equity investment can serve as a form of concept validation. It indicates that external investors see potential in the business model, products or services, which can boost the company's credibility and attract additional stakeholders.

Ultimately, founders appreciate and gravitate toward brands that are credible, familiar and consistent in the results they produce. You can demonstrate these qualities by crafting a compelling and distinctive brand narrative, emphasizing your successful track record and cultivating a strong online presence that is hyper-relevant to founders seeking strategic partnerships. By leveraging private equity branding in this way, your firm can ultimately establish a magnetic pull for consistently high-quality deal flow.