How to Use Online Fundraising to Grow Your High Net Worth Investor Base

 

Until just a few years ago, the idea of marketing to commercial real estate investors online seemed implausible. For decades, CRE investment firms looking to raise investment capital have had to rely on intimate networks of friends, family, and close associates. If you didn’t have a country club membership, you’d probably have a hard time finding high net worth (HNW) investors and getting your deal off the ground.

But then Title II of the JOBS Act went into effect. Now, under Regulation D 506(c), sponsors can generally solicit their investment offerings to accredited investors anywhere, instantly.

It’s a brave new world—but not too brave, nor too new. As CrowdStreet CEO, Tore Steen explained in the first installment of this series, online fundraising is in many ways a natural extension of how CRE firms have always done business. Although technology and regulations have evolved, the fundamentals haven’t changed.

New Marketing Technology, Established Marketing Principles

Since CrowdStreet’s founding in 2013, we’ve been developing a platform that delivers on the promise of online fundraising. I’m pleased to say we’ve achieved considerable success: the CrowdStreet Marketplace offers operators and developers access to over 30,000 investors, and our users have so far raised capital for a total of $5 billion in CRE projects.

How did we attract investors to our marketplace? By centering our marketing efforts on two general principles: visibility and trust.

Similar to the act of pitching investors over a round of cocktails or a round of golf, a sponsor who markets online need to grab their audience’s attention and establish credibility. That means connect with HNW investors on the right channels, creating an appealing offer, and providing investors with all the information they need to feel comfortable making an investment decision.

With that in mind, let’s dive into some specific marketing tactics. We’ve tried a number of different approaches, but two in particular have emerged as the most effective:

Proven Approach #1: Content Marketing

We’ve found that content is the greatest single factor in attracting HNW individuals to the marketplace and converting them into active investors. Content marketing can refer to a broad array of initiatives that may include articles, videos, webinars, podcasts, and other forms of media. But regardless of where or how it’s presented, content should provide useful, actionable information to investors. Think “persuasive essay” rather than “60-second ad.”

When developing content, it’s useful to take on the perspective of a potential investor. What questions do they have? How familiar are they with the market? Many of the individuals who use our platform are experienced investors, but have had little exposure to CRE—after all, as I mentioned above, real estate fundraising online is still a relatively new concept. With that in mind, we created more than 50 in-depth Investor Guides on everything from syndication to building a diversified CRE portfolio to understanding internal rate of return.

In addition to its educational function, content marketing also gives you a chance to share your story and unique investment philosophy. What’s your vision as a sponsor? What unique opportunities can you offer to your investors? As is the case in other high-consideration industries, the path to “yes” is a process with multiple facets and touchpoints. Investors are frequently evaluating the sponsor as much as they’re evaluating the deal, and building trust takes time.

(There’s another vital benefit to content marketing: search engine rankings. Good content drives SEO—but don’t take my word for it.)

Proven Approach #2: Hypertargeting and Retargeting

Education is a critical component of a CRE marketing strategy, but we haven’t built up our network of HNW investors with content alone. Before we could present our content to investors, we needed to find those investors and bring them to our site. That’s where hypertargeting comes in.

Hypertargeting is the practice of targeting the most valuable members of an audience through segmentation and tailored advertising. It could mean targeting college graduates with a net worth of over $2 million, business owners between the ages of 40 and 52 who live within 10 miles of Dallas, or any number of combinations of demographics, psychographics and behaviors.

Our online advertising campaigns became even more effective when we targeted a “lookalike audience,” which is comprised of people who resemble a company’s existing customer base. Choosing to target a lookalike audience basically speeds up the process of hypertargeting by handing the reins to AI, letting algorithms harness connections and trends we humans can’t always identify.

We’ve also engaged in retargeting, where we use analytics platforms to market to potential investors based on their interactions with our ads, content or website. It not only provides you with valuable insights into your marketing performance, but enhances your ability to customize your messaging to particular individuals and audiences based on the specific actions they’ve taken.

Take Advantage of Our Marketplace

I hope these tips help reduce some of the uncertainty around digital marketing for CRE offerings. If you would like more information about anything in this article, let us know, and we can explore these topics further in future blog posts.

You’re free to adapt our tactics into your own marketing approach, of course, but why rebuild a program that already exists? We’ve set up the CrowdStreet Platform to take care of marketing for you. We can help you develop and promote your offerings to a large network of accredited investors, automate management and reporting, and grow your HNW investor base. 

Next Up: How to use Online Fundraising to Engage Your Existing Investor Base and Increase Re-investments

We’ve looked at attracting new investors—how about maximizing engagement of your existing investors? Join us for the third installment of this series, in which we’ll answer that question and more.

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