Building a Hedge Fund's Brand Identity – Website Best Practices

December 3rd, 2009
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Contributed by: Quoin Partners
In my article last week, “Solidfying a Hedge Fund Brand – What Not to Do,” I am sure that I embarrassed some of our valued readers with my list of cardinal sins or brand identity “de-legitmizers” that many startup funds invariably commit. Since then, I have received a number of emails from members of our network and clients sheepishly admitting to have been guilty of one if not all of the items in the list I put forth…so I am glad that I have at least succeeded in shedding some light on what not to do.

Look, I realize that as a startup hedge fund manager your time is valuable and in tremendously short supply…if you are like most of our clients and fund managers in our network, you are 100% focused on raising capital. You do the best you can either in relying on your internal resources or external partners you have, but you feel strongly that your highest priority is raising assets. So why should you be wasting time going through deep dive introspection and planning in establishing your firm’s brand identity?

You might think that your investment strategy and returns should speak for themselves, regardless of whether they are written on a coffee stained napkin over a Starbucks meeting or a glossy power point presentation…the investors will come running. Let’s look at three current industry trends…facts that every “Field of Dreams” hedge fund manager face:
1) Startup hedge funds are popping up at the fastest clip in a year and the pace of new launches is only expected to increase;
2) Investors are more hesitant to open their wallets and those who do are putting less money to work (e.g. the $1BN raise of 2006 is now the $100MM raise of 2009);
3) Investors of all types are demanding greater transparency and operational quality from startup funds

These days, just because you build it, doesn’t mean they will come. The emerging manager landscape today is characterized by more competition for a smaller chunk of the investor pie, and those funds who are successful at raising assets must meet the highest standards of transparency and due diligence scrutiny. How do you differentiate your firm from the hundreds of other startups while at the same time meeting the highest standards of legitimacy and transparency? One word…presentation. How you present yourself, your firm, your strategy, your returns, and your infrastructure should be the foundation of your corporate brand identity…and will determine whether or not you are successful at raising capital.

Now that you know how not to present your firm and the practices that can make your firm not seem as legitimate, I will explore some best practice tactics which apply to all types of startups that will hopefully aid you in building your corporate brand identity and successfully present your emerging fund to all you come in contact with. Building your brand involves creating a clear, consistent message and exuding an aura of professionalism in all corporate and marketing communications. A tremendously important component of communicating your message is the medium in which you communicate it…refer to the strategy and returns communication on a coffee stained napkin example above. It all starts with the name of your firm, your logo, your corporate stationary, investor presentation/tear sheet templates, and most importantly your website.

Your firm’s website is the arguably the hardest working and most subtly important component of your corporate branding strategy, yet it seems to be one of core marketing components that startup hedge funds neglect the most. We live in a 24 hours a day, seven days a week; 365 days a year digital world…our society has become voracious consumers of instantaneous data that must be available at the click of a button. Newspapers are being eclipsed by blogs as the primary source of news that the public is consuming, Twitter has condensed millions of online conversations to 140 characters, Christmas shopping is increasingly more of a digital affair, Google has become a verb in our cultural lexicon…we rely on the internet for the vast majority of our daily life. Those who do not have a web presence simply do not exist in the new world order. As a startup, regardless of what industry you are in, if you do not have a website you might as well not exist. There is just something about being able to type in a company’s web address into a browser and access their website that is reassuring to customers, investors, and prospective employees alike…its tangible, it exists, and in a strange yet superficial way it makes sense. In addition to being an instant source of credibility, if your website is designed properly it will be the cornerstone of your firms marketing strategy as it works 24/7, is universally accessible, and instantly communicates your message/strategy to all who visit. Often, it will be the very first point of contact for clients and investors so it is important to ensure a crisp, professional, and transparent delivery. Whether it is in the public section or the secure sign-on section, it is essential that you website is working on your behalf and to your advantage.

I think there are some commonly held beliefs that lead many emerging managers away from launching a website or deciding not to do it altogether. Some of the reasons or excuses that we regularly come across include:

“We are on a tight budget and a website is too cost-prohibitive at this point” – Probably the most commonly held, and untrue assumption...while this might have been true a decade or so ago, the fact is that nowadays you can get an exquisitely designed, professional looking, and investor/prospective investor friendly website done relatively inexpensively. I always cringe when I hear of the companies out there who supposedly ‘cater to hedge funds’ by designing ‘hedge fund specific’ websites and charge $15,000 – 20,000 for it. Truth be told that hedge fund websites are simple to design and far less complex than say an online bookstore…I’ve never understood why funds allow themselves to be fleeced by the so-called experts…at the end of the day you need a talent, artistic designer NOT someone who specializes in hedge funds.
“I do not want to share my strategy and return information to the public” – This is valid and security is and should always be a key concern of every entrepreneur. However, this is precisely why you have a public homepage and a secure area where only those whom you grant access can view. This is not expensive and any design firm worth their salt will not charge extra for this.
“We don’t need a website because we would rather pitch investors directly” – Refer to everything I said earlier, if you website is done right and will pitch to prospective investors for you 24/7. It will allow the investors that you are not able to contact directly be able to access information about you. A highly effective tactic is to aggressively market your firm and your website to where investors may have access to it… through sites like LinkedIn (which we swear by), Twitter, link swaps with other websites, hedge fund blogs, and so on. Trust me, having a website and marketing it the right way, is an invaluable tactic that will yield dividends beyond what you can imagine…and most of it is 100% free!
“We already have a website” – That may very well be the case and it may very well be sufficient, heck it might be a world class website!…however, what we often see are existing websites that are literally a single, un-dynamic page that displays a fund’s name, logo, and contact information…that’s it. We also see countless “build-a-site” designs that look and feel like just that…you built you own website (see last week’s blog for my list of no-no’s). Or the best are the ones that simply say: “XYZ Fund Website Coming Soon!!” None of these so called “websites” do your fund any good for a few reasons: 1) They don’t really say much about your firm, principals, or strategy…any prospective investor will quickly move past this site and on to another one that is more informative. Trust me, they will not call you asking for more information…you get one shot. 2) Your ‘build-a-site’ looks unprofessional and most people will simply move on…unless of course they know you and actually believe in your approach (through no help of your website). Trust me when I say, INVESTORS AND CLIENTS ALIKE PAY ATTENTION TO THIS!

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