10 Tips Private Placement Brokers Must Know
If you are trying to close a private placement deal, the number one thing you do NOT want is a broker chain. Over the first few years, it is tough for most people to even become direct to a private placement opportunity, given the thousands of brokers that exist in the business. To add to the problem, most private placement brokers think they have a real private placement program, but unfortunately, 99% of them do NOT.
Investor or intermediary, the growing “broker abyss” haunts us all, and with this new unsafe environment you must have a unique approach to achieve success. In this article, we will provide you with the insight you need to break through the wall of mediocrity, so you can start your life as successful private placement broker. First things first, let’s take a look at some tips to help you find other brokers, cut through the chains, and get DIRECT to a real private placement trader.
10 Tips for Private Placement Brokers
1. Define your Goals: You will always be more successful if you create goals, and have plans on how to attain them. Though this is a very basic concept, most private placement brokers simply “wing it”, expecting to close the deal of a lifetime. If you are organized and well spoken on the phone, clearly stating your goals, most brokers will “pass you along” to the next person without hesitation, or tell you they can’t help from the beginning.
2. Education is Everything: If you are NOT educated in the fine details of private placement, you will NEVER be able to know what is real. In addition, if you are improperly educated, you could easily meet one of the few traders in the world, and not even know it. Whether you are an investor or broker, education is the key to determining which brokers are wasting your time, and which may be on to something. If you call brokers out with the facts and get straight to the point, they will part like the “Red Sea”, and you will eventually be DIRECT with a “trader”.
3. Find a Trader you Believe In: If you are promoting a private placement program that you don’t truly believe in, you are wasting your time. People can sense confidence and shakiness over the phone, and in the private placement world, that is your main method of communication. Do yourself a favor and don’t try to put deals together until you are completely sure that you are representing something, or someone that is real. Once you find someone you truly believe in, and you emit that confidence to other brokers in the private placement world, you will usually get places much quicker.
4. Be Confident and Calm: As we have said before, all you really have in the private placement business is your ability to communicate effectively over the phone. If you are educated, calm, collected, and confident, you will be far more efficient in your private placement efforts than someone without these characteristics. Despite the fact that this approach is far more effective in gaining a favorable response from other brokers, most brokers you will meet are anxious, undereducated, and living on a prayer. Define yourself, your knowledge base, and your confidence first, and you will be direct to a real program before you know it.
5. Creative Networking is a MUST: The most common way for private placement investors and brokers to meet is via the Internet. Whether you search through investment discussion forums, or other similar sites, private placement websites can be very limiting unless you get creative. Though this may be a good place to start, it will NOT lead you to your dream of riches. To be effective, you must use a far more aggressive approach that focuses on contacting everyone in the private placement business at once (hint: email spiders), with a goal of establishing a large contact base to network within. Once you establish a large network, and gain some experience, you can start to develop relationships with the select few individuals that you feel are real, and start to put deals together. Remember, if you network aggressively, you should always have leads to work with 24/7.
6. Organize and Follow Up : What good are leads if you don’t assess and extract the full potential from them? When you meet a new private placement broker, investor, or trader, always note their contact information, and what your gut feeling is on them. Also, it can help to write a short summary of your conversation so you can begin where you left off next time you talk. You may say, “I can keep track of things without documenting it”. Well, if that’s the case, you are not networking aggressively enough. You should aim to have a list of over 500 contacts, and should follow up with them based upon the priority you assign to each person. Remember, in the private placement business people forget about you quickly, so follow-ups are VERY critical to developing relationships.
7. Have a Good Business Presence: If you have made the decision to work in the private placement world, you should first create a legal business entity specifically for that purpose. After you have a business, you can think about creating a website, or other unique material to differentiate you from the 100,000 other private placement brokers. Always remember, whether you’re on the phone or just sending a simple email, to be successful in such an elite business you must exude the utmost professionalism at all times.
8. Demand to Speak with Program Manager: If you are educated in private placement, and the broker you are speaking with knows it, it may be a good time to get aggressive. By nature, most people do not like confrontation. With this in mind, if you are someone who appears to be well-informed, qualified, and straight to the point, you will get DIRECT to a “trader” in no time. Unfortunately, most private placement brokers sit behind their computers and Skype each other, when they should be “taking the bull by its horns”!
9. Ratios are Your Best Friend: As we have briefly mentioned before, it is better to start off with “500 contacts” than “50″ in the private placement business. Though it may seem tough to sort through all of the “programs” that people are offering, if you are educated, you will know when you meet a real trader. Some methods to increase your ratios/contacts in private placement are: posting in forums, using email spiders to extract/send emails, creating a blog/website, networking aggressively over the phone, etc. Think about it, if you have 1000+ contacts in the private placement business, chances are you’re DIRECT to something real. Once you find what it is, you can cut your network down to as few as 10 people, and still be a millionaire.
10. Make a Commitment to Never Give Up: If you make the decision to be successful no matter what from the beginning, and never give up, you will eventually find what you were looking for. In contrast, if you say to yourself, “If I don’t close a deal in 1 year, I am going to quit”, you will NEVER close a deal and will feel your efforts were wasted. Being successful in the private placement business takes someone with fierce persistence, and a very vivid dream of success, which as we all know, are very rare characteristics in this day and age.
After reviewing the tips we have listed above, you now need to ask yourself three important questions whether you are an investor or a broker.
First, is my personality right for the private placement business?
Second, can I commit to being cautious, and not overanxious?
Third, can i agree to never give up until I succeed?
If you have a second, sit back and reflect on these questions in your head…
After you have done this, now ask yourself, am I willing to sacrifice years of my life, all for a far-fetched stab at success? Well, your answer should depend on the type of person you are, and your willingness to learn.
If you are the kind of person that sets goals, thrives in moments of pressure, and overcomes adversity easily, then you may have a good chance to be a successful private placement broker. On the other hand, if you are someone with wealth and are open to new ideas, then you may be the right type of person to invest in a private placement program.
In summary, whether you are an investor or broker, you will always encounter “daisy chains” and misrepresentation in the private placement business. Though we have listed some great tips above to help increase your efficiency and identify time waste, always remember, how you utilize the relationships you develop with other brokers will lead to your success, or demise.