{{ p.title }}
{{ b.text }}
{{ g.text }} {{ g.text }} {{ g.text }}
| {{ c.v }} |
|---|
{{ b.note }}
{{ p.kfImg.note }}
Own a Small Niche Before You Chase Every Endowment
Adapted for fund managers pitching endowments from Chapter 2 of Capital Raising by Richard C. Wilson.
One positioning idea in my capital raising book comes from a business coach I heard speak. I call it the 7/70 rule. Carve out about 7% of a market and try to own 70% of that slice.
The exact numbers don't matter. The point is to go after a valuable niche that plays to your DNA, your passion and your strengths, and build a defended position there.
What that looks like for an endowment raise
Instead of "we raise from institutions," pick a slice:
- Endowments of $250 million to $1 billion that use an outsourced CIO
- Religious and mission-driven endowments with screening needs
- Public university foundations in one region
- Hospital and medical research foundations
Then try to become the obvious choice for that group in your asset class.
Why a slice is easier to win
- You learn what that group needs faster.
- Their staff talk to each other. One happy client leads to the next.
- You can tailor terms, reporting and content to them.
- Consultants who serve that group start to see you as the specialist.
The fear of going narrow
Managers worry a narrow focus caps their raise. I see the opposite more often. Firms with $500 million or $1 billion of capital still ignore this and grow slower than they could. A clear slice makes your first big wins happen sooner, and those wins open the next slice.
How to pick your slice
- Where do you already have two or three clients or close relationships?
- Where are competitors weakest?
- Which group has a real, current need for your strategy?
Choose the slice with the most yeses.
Define it in writing
Write your sandbox, your one-liner and your exact target investor. Many investor relations teams I meet have never done this. It is the cheapest fix in capital raising.
Frequently asked questions
How small is too small?
If the slice can't fill your fund over a few years, widen it a little.
Can I own more than one niche?
Later. Win the first one, then add the next closest.
Does this work for large managers too?
Yes. Large firms often run separate efforts for each investor slice.
Sources
- Capital Raising, Chapter 2, Richard C. Wilson .
