The Pitchbook Creation Process: How Poor Planning Leads to Poor Results
By: Sarah McNabb
Just as a hedge fund strategy inherently follows a specific process to increase capital, manage risk, and optimize return opportunities for investors, the development of a successful and professional fund pitchbook must also follow a special process.
From planning and messaging, to content and design, an effective fund pitchbook has a process with multiple considerations that, if not carefully and properly executed, can make an otherwise excellent strategy look…less than appealing.
Here, we list some common mistakes made within a poorly executed pitchbook process.
- Poor Planning
- A random order to the slides of a pitchbook can make your fund’s story and strategy nonlinear and disjointed. Thinking narratively will help in crafting your fund’s story.
- Not having a plan of the clear sections of the pitchbook and the key messages within each section means that the pitchbook itself is starting off on the wrong foot. Take the time to distill the high-level points you want your audience to walk away with.
- Poor Messaging
- Too many general statements not backed by specific examples can be problematic in a pitch. If you make broad statements without providing specific reinforcing examples, points, or performance facts, your pitchbook won’t be optimized for impact.
- Non-compliant statements or the use of superlative language can kill a pitchbook and put your business as risk. Make sure your language meets rules and regulations: Have your compliance department or firm review the pitchbook prior to its use.
- Leaving out key contact information at the end of the pitchbook is an obvious mistake, but new fund managers putting together their own pitchbooks still do it. It is difficult for a potential investor to continue the conversation with you if they don’t have the manager’s phone number or email.
- Poor Content
- Too much content, such as using several paragraphs of text on a single slide, means that you have not taken your audience into account. If you’re presenting to a group of investors, they won’t be listening to you if they’re trying to read what’s on the slide. For this reason, it is best to treat a pitchbook like an outline – not like a novella.
- The inverse (not enough content) is also problematic. An overly-minimalistic approach can make your fund strategy look lacking in its approach and short on transparency. There is a “sweet spot” regarding the amount of content to include in a fund pitchbook.
- If you present with outdated content – such as showing monthly performance charts from last year alone – your pitchbook looks like it has fallen behind, or worse, hiding potential losses. Time-sensitive components of your pitchbook should always be updated prior to presenting to potential investors.
- Poor Design
- Distracting or amateur design elements can dampen and psychologically discredit even the greatest content. Ensure that a professional design appropriate to your branding is applied to each slide. Design can help display and reinforce the ideas being described, so if you’re not a graphic designer, consider using a professional.
- Copyright image issues and images found at random on Google or clearly lifted from another entity without permission pose a problem. Don’t risk the embarrassment of getting penalized or having legal action taken against you. This is a detail of design that can discredit your fund and strategy. Only use original or legitimately purchased images in your pitchbook.
All steps of a pitchbook process must be executed correctly. These steps interlock and operate like gears that turn: Making mistakes in the design part of the pitchbook process affects the transmission of content, and so forth. Don’t increase your marketing risk. Always take your time in the execution of this process or let a professional develop your pitchbook for you. Your AUM will thank you.
About the Author
Sarah McNabb is Chief Marketing Officer at Gate 39 Media, a financial services marketing firm providing online marketing and application development for financial services across futures, equities, hedge funds, and alternative investments.