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Selling private placements/reg D: Right approach?

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Aug 5, 2011 11:26 pm

Hello all:

I was hoping to solicit advice from fellow FA /stockbroker types about how they would (or have gone) about selling private placement/Reg D securities. I've been with this firm (it's new as well) since the beginning of the year and as of now we only sell private placements. I've been working on one specific Reg D since the firm's inception and haven't had much (re: any) success thus far.

Target market: Accredited investors (BSDs or aspiring/wannabe BSDs that like deal making and are probably not that meticulous about sensible asset allocation. In my ideal world, I think I'd have a client in a handful of deals at any one time that are in different stages of the cycle. This might represent, at most, 10-15% of their investable assets. Minimum investment is $50k although I'd go lower at this point because frankly, I'm getting desperate)

List quality: Good. I think. Contact ratio is brutally low sometimes as I am calling VP and above types almost exclusively. I've called nothing but business numbers and lately, only people I could conceivably schedule an in person meeting with.

Warm market quality: Not so good. Frankly, I don't want to put any family or friends into a high risk/high reward investment when I'm just starting to build my book. I don't have many warm, accredited contacts to begin with.

Number of cold calls: I haven't kept diligent records on this but I would say I've made at least 12,000 calls since the begininning of 2011. I usually get in between 150-200 dials a day.

Accounts opened: 0. Two token accounts from a friend and my dad.

Approaches: I've tried 1st call to schedule an in person meeting and 1st call to get out a teaser packet with the hope of scheduling a meeting on a follow up call. Neither has borne much fruit (obviously). For awhile, I was able to make appointments with a very, very soft "all I want to do is network approach! even got several meetings with PE/ibanking/institutional types but it was almost meet and greet and our deals are always outside their stated investment parameters.

Scripts: Various: "Hi Mr. Prospect this is palestinian chicken with My Firm how are you today? Great! Listen, Mr. Prospect I have an outstanding investment opportunity for you!"

"Hi Mr. Prospect, I'm with My Firm and we specialize in private placements and matching investors with tremendous opportunities in exciting new businesses. All I wanted to do at this point was extend you out a business brochure that touches on what we do..."


I'm aware that the pre existing relationship clause exists with offering Reg D securities so for the bulk of the time I was aiming to get out a company brochure (thereby establishing a pre existing relationship?). Anyway, if anyone out there has made it successfully doing private placements I'd love to hear your ideas and experiences. Of course, if you've never done straight private placements (we literally have zero other products) but have some advice I'm all ears as well :)

Thank you all!