[Video] Insider Insights: Investor Relations for SMEs

There's no doubt that SME property developers are going to have a huge role to play in housing delivery if we're going to hit the type of numbers the Government are talking about.

But during the last economic recession, roughly a third of SME developers were wiped out - so how can we make sure that doesn't happen again?

While SME's face a range of challenges and barriers, there's one critical factor that comes up time and time again - funding.

Our recent research survey found that almost 60% of SME developers say access to funding and investment is their single biggest challenge.

Even when you broaden out the sample to include larger housebuilders, access to finance was consistently listed in the top three challenges.

So how do you make sure that, when you do get in front of an investor, you show yourself in the best possible light and maximise your odds of getting funding?

That's the exact question that we asked Helen Chorley, experienced investor and star of Sky's Property Elevator TV show. 

Insider Insights with Helen Chorley: Investor Relations for SMEs

In the first of our 'Insider Insights' webinar series, Helen discussed the good, the bad, and the ugly of property pitches and how SMEs can establish smooth and successful relationships with their investors.

You can watch the full replay of the webinar below, but I've also pulled out a few key takeaways from the session to read through if you're short on time. 

Enjoy!

 

 

Three Key Takeaways

1. Choose your investor wisely - and understand what they want

Just as an investor will pick and choose which deals they get involved with, as a developer you should think carefully about which investors you go after too.

Helen really hammered home the need to adjust and adapt your approach depending on the type of investor you're speaking to, and to make sure you're bringing the right deal to the right person.

  • What type of deals does this investor typically work with?
  • What is their level of risk appetite?
  • Are they a "mom and pop" pension investor, or a sophisticated fund?

Do your research on an investor before you go knocking on their door, and make sure you have the right deal with the right level of detail when you do make your approach.

 

2. Silence is a cardinal sin (and a big red flag)

How you communicate with your investor after the money is in the bank is one of the key indicators that your investor will look at when deciding whether you're the type of person they want to work with again and again.

As with any complex development deal, it is highly likely that over the lifetime of the project there will be some bumps along the road. It's normal. And experienced investors know what to expect.

However, going quiet and failing to communicate with your investor during a tough time is pretty much the worst thing you could do.

"Silence is the biggest red flag, without a doubt. You have to understand that if you're not communicating with me, I'm going to assume that something is wrong, and without concrete information from you, my mind is going to imagine the worst-case scenario."

 

- Helen Chorley, Angel Investor

The last thing you want when you're dealing with a problem is a panicky investor, and going quiet is a sure-fire way to lump unneeded stress and pressure onto an already difficult situation.

 

3. It's not all about the deal - Know your USP

One of the most common mistakes that Helen has come across is a developer's need to focus everything on the deal, and forget to sell themselves.

"I'm a firm believer in people over project. Forget about the specifics of the deal for a moment. Why are you the right person to deliver this project? What's the story behind the deal? What's your personal history in the property industry - have you been on the investor side of the deal before?

 

"This is all information that I want to know. I need to buy in to you as a developer, as well as buying in to the deal."

While we all understand that the nature of the SME sector means it's highly unlikely that you'll have a full PR or marketing team working for you, it is absolutely crucial that you take the time to really define your USP and work out how to effectively communicate it to investors.

Marketing yourself is about more than just nice photos in a glossy brochure, and the sooner you perfect your personal pitch, the better.

 

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Franki heads up the content and community at LandTech (you might even recognise her from our webinars). She’s London born and bred, and can’t imagine living anywhere else (in fact she’s so London her family used to own a red Routemaster bus). Couple this with a career in PropTech and it means she has strong views on London house prices.