Deal Origination for Family Offices [Webinar + Recap]

Gabe Galvez

Watch the Full Presentation on YouTube above.

Transcript from Gabe's presentation with Family Offices Insights:

Art Bavelas (00:00:05):

Welcome, everybody, and thank you for being with us today. Greetings, all my Family Office Insights friends and guests. We are broadcasting live from Tampa, Florida. Where are you guys, Gabe?

Gabe Galvez (00:00:20):

San Diego.

Art Bavelas (00:00:21):

San Diego. Alex, you, too?

Alex (00:00:23):

Yes, sir.

Art Bavelas (00:00:24):

From San Diego. So welcome. I'm repeating myself on these webinars, but the community has been so awesome, and really appreciate the participation and the interest. We do our very best to have interesting opportunities. As you're going to discover and have probably already discovered because you RSVPed, today's webinar is not a pitch for raising money for a company. It's more about a how do you originate deal flow in a best practice way from a group that's been doing it for 10 years? I was referred to this group through some good DNA, which is super helpful, and they've had some grand success. To be clear, as I often say, I have no skin in the game here, but we're super glad to have CAPTARGET. Alex and I had a chat, and Gabe and I just met here. So I think you're going to find it very interesting.

Art Bavelas (00:01:23):

A couple of real quick Zoom housekeeping things, we can't hear or see you. The webinar is being recorded, and it will be posted on the Family Office Insights YouTube channel a few days from now. So if you need to refer back to it or if there's anybody in your community or after seeing the presentation today, you think others would benefit from it, please feel free to share it with them. We'll also make sure that the attendees get in touch directly so you can communicate directly with CAPTARGET.

Art Bavelas (00:01:57):

So I think you're going to enjoy the presentation today. We have a lot of people coming on, and, as usual, we super encourage your questions. Send them all in. We'll get to as many as we can as early as you feel comfortable in asking a question, and don't be shy. We'll get to as many as we can. I'll be monitoring the chat and the Q and A. With that, thank you again for being here. Welcome, Alex and Gabe. Gabe, take it away.

Gabe Galvez (00:02:25):

Thanks, Arthur. Hello, everybody out there on mute with their cameras turned off. Today we're going to be, as Arthur mentioned, talking about some best practices in the origination side of deal-making that I view as often overlooked not just by family office investors, but really kind of by the whole professional buyer universe. We'll jump into that in just a minute, a little bit of context, a little bit of background first. Some of this mirrors what Arthur just said, but quick reminder. They're pretty lightweight slides. I'm going to keep this a little more conversational. We were just chatting before everybody joined that we've sort of started to move away from PowerPoints in this Zoom COVID era and have gotten really excited about just chatting.

Gabe Galvez (00:03:15):

So I'm going to leave this deck up for now, and there will be some information presented there, but it's fairly lightweight. If we want to deviate from this, as long as it's under kind of the broad topic umbrella, I'm happy to do so. So just a nice encouragement. Use your chat feature anytime. Arthur can chime in as a facilitator to getting that Q and A up on the screen, and I don't mind at all. This is not super scripted or anything, so we can start and stop as needed, and we'll make sure everybody gets a copy of this who wants one.

Gabe Galvez (00:03:47):

A little bit about us first, and then I'll share a little bit about me, too, because this is more my perspective and a little bit less what we do. As Arthur mentioned, this isn't really a pitch. That's not what we're going to do today. But for those of you who aren't familiar with us, we help private equity groups, family offices, just buyers of businesses, mostly in the middle market, source acquisition targets. We're unique in that we don't require the payment of success fees. We don't participate in deals. We don't advocate for particular transactions or clients. We're really the folks, as we like to say, bring the horse to water. If he drinks or dies or it's the most beautiful horse you've ever seen or it's a funky old mule, that's sort of above our pay grade.

Gabe Galvez (00:04:38):

We really encourage folks to think of us as an extension of the business development team or your corporate development team, depending on the application, but not a buy-side M and A firm, not a deal maker. We don't really exist in that capacity. We are really the top of that deal funnel, the absolute first entry in the inverted pyramid. This is me when I used to have to put on a suit. Now here we are. Arthur and I have the same outfit on, but a little bit about me. So I actually came from the Family Office world. I was the CFO of an MFO that was based out of Mexico that operated in the Southwest US. After leaving that position, I became an investment banker and ultimately started CAPTARGET. Prior to that, had lived through my own startup lifecycle with a pretty nice exit pretty much right out of the gate and a few that have followed since then. After founding CAPTARGET, we spun off a number of other companies, one of which some of you may have seen or heard of called Merger Labs, which was acquired a few years ago, which was really the market's first digital marketing agency dedicated to this vertical specifically. As of late, I have formed in effect my own multi-family office with one other family's balance sheet in San Diego here, and I'm working a little bit less away from being sort of entrepreneur operator and I'm moving into building my own balance sheet more specifically through this lens.

Gabe Galvez (00:06:23):

So you could kind of say I've sat on every side of the table, and in this weird deal universe, that table might even be triangular or hexagonal or something in that I've represented those deals for sale. I have been the buyer of those deals, whether it's for hire or as a principal. We have represented so many clients in this process, over 1,000 at this point. So I've bought them. I've sold them. I've repped them. I've helped them evaluate them. I've kind of been through the ringer. So when we talk about best practices here, I just like to drop a little note that this is not only through the CAPTARGET lens, but really through the lens of somebody who has eaten, slept, and breathed this for, in effect, my entire career. So hopefully you're in good hands. I sure think so, but I'm shouting into the void.

Gabe Galvez (00:07:25):

So little agenda here for the day. Again, we're going to be talking about best practices in the context of sourcing. We're going to talk about some sourcing truths, some content strategies that have been proven to be effective when doing this type of outreach, particularly via email or through a digital modality, which is most common now, and also some systems considerations. What do you need by way of the technology and, to some extent, the human capital to really execute sourcing at scale through this best practices lens?

Gabe Galvez (00:08:09):

So let's just jump right in here. So before I just read through this slide, and, again, these slides are fairly light, let's talk about some kind of cultural underpinnings of private equity and to a lesser extent family office investing. Often, we are either high-level operators or folks with finance backgrounds. I have some accounting degrees as an example. One thing we typically are not are trained marketeers. Even further to this idea, when we talk about the differences between family offices and private equity groups, which certainly is old hat for everybody, but just to put a pin in the point, we're really talking about the difference between a group that has an economic incentive to deploy capital and one whose primary purpose is really asset preservation. Certainly we're looking to grow asset value over a period of time, sometimes [inaudible 00:09:14], but one group is really being paid to spend money, and the other group is being paid to defend the value that is derived from that money, right?

Gabe Galvez (00:09:23):

But all that is to say nowhere in there do we talk about how are all these brilliant marketeers. Why does that matter? Because the first big truth in sourcing is that origination work, finding new deals, it's marketing. For us to be good originators, we really need to be good marketeers. A lot of us don't even know what that means. So just as a little recap for those that do, good marketing campaigns, number one, are going to be highly differentiated. As the slides say, we want to speak to the viewer about their pain, not about us, right? Nobody cares about us, really, at least not at that initial inception of a conversation or validation of an opportunity. We need to curate an audience over time.

Gabe Galvez (00:10:18):

Sourcing, just like marketing, we're going to use them interchangeably here, it's not a band-aid solution, right? We don't say, "Hey, we need a deal, so let's do the thing that's a means to an end to finding a deal," because we know what close rates are and all of that. So we need to really create an audience over time that the derivative of the relationship becomes deal flow.

Gabe Galvez (00:10:45):

Lastly, good marketing campaigns are always ... I know it says often here, but they're really always multi-pronged. They're supported by other marketing channels. They're supported by other peripherals and often other team members and other strategies that should coincide with this marketing effort. So as you're out there sourcing in the world and networking and knocking on doors or sending email, letters, or going to those trade shows, don't view this effort as business development or as interpersonal networking. Really view it as a marketing effort. Even if it's beyond the scope of what we're going to chat about today, I encourage everybody who's in an origination, a sourcing position, be it family office or private equity or some alt whatever, to take a step back and try to do some self-education on just marketing at a high level, because there's a lot that can be taken away from there.

Gabe Galvez (00:11:52):

So differentiation, always key, right? We want to make sure that everybody knows why we're different. As a counter to that or really as an addition to that, I guess, we want to make sure that we are different, right? It's hard to sell stuff that's exactly like the guys down the street are selling. So as you're developing brands or revamping your own brand or wherever you may be in the lifecycle of your family office's recognition out there in the marketplace, your entire team and your strategy needs to be steeped in some kind of differentiator. Otherwise, we're really just selling the same thing as everybody else, and, in turn, we're going to have less control over the type of lead flow we get, because we're not allowing for a self-qualification from a lead, and we're also just having to shout the same message loudly into a room filled with folks that are already shouting. That just typically isn't very effective.

Gabe Galvez (00:12:56):

So consider tabling agent experience, as this says. A lot of us lead with that. We've been around for 100 years, whatever. The example I like to make when I'm either in-person or onscreen, I don't know if anybody can see, but this whole beard has turned gray in about the last 10 years of deal-making, right? But I don't show up to a meeting or send an email saying, "Hey, my beard is gray now, so I know something about something," right? I don't know anything, or at least the argument could be made just the same that I don't. So we need to really move away from these kind of lazy differentiators that a lot of us have relied on for the last 20 years of kind of digital or tech-enabled origination for family offices.

Gabe Galvez (00:13:45):

So instead, consider building your brand. Consider building specific campaigns around real success stories, your focus area with a real niche, moving beyond, "We like B2B service companies." What does that mean? That's half the countries in the world at this point. Consider focusing on deal structure and dot, dot, dot. The list goes on and on. The takeaway here is you've got to have something to say different, and your entire team and your brand peripherals should reflect whatever that differentiation is.

Gabe Galvez (00:14:23):

Excuse me. Another great takeaway here, and we're pretty guilty of this in this space, is we want to really communicate this differentiator in a way that's kind of a P2P communication, most often a top-to-top communication, where we're speaking to the target, not at the target. That can mean a lot of different things, and we'll get to this email in a second or this screenshot of an email. But when we talk about the difference between speaking to somebody and speaking at somebody, that can run the gamut from having an influence on language selection, for example. If I'm speaking at somebody instead of to somebody, I will likely be using third person. I will likely be talking about us as a corporate brand and you as potential targets or sellers of businesses.

Gabe Galvez (00:15:27):

There's many more examples, but we really want to move beyond kind of that veil of corporate speak and get into a more earnest, certainly still professional, appropriate, but more earnest conversation that should feel and read like it's coming from two folks who have a mutual benefit in connecting and who on one side have clearly communicated, on the other side have clearly understood the why as to they should be speaking. As an example here, we see a lot of family office and private equity email solicitations that kind of read the same, and some of these examples are a little extreme, but some of you are probably guilty of sending these types of solicitations. I have been, once upon a time. But we see a lot of this kind of whatever, "XYZ Co looks to acquire ABC company types."

Gabe Galvez (00:16:23):

That's fine. That's descriptive. But it's a real, "So what?" It doesn't really meet any of these best practices in marketing, speaking to our audience, differentiating ourselves, talking about the solution to a pain the audience is experiencing, rather than speaking about us, because nobody really cares about us, at least at this point in the conversation, right? We haven't given them enough to care about us.

Gabe Galvez (00:16:49):

So I think we throw out, again, a pretty good example here, but in that spirit of good marketing, let's just use this as a thought exercise to think about other brands and what would happen if they were sort of yelling at an audience, speaking-

Gabe Galvez (00:17:03):

...and so what would happen if they were sort of yelling at an audience, speaking at an audience rather than engaging with an audience, and we're leading only with the technical definition of their activity, not the intention, not the differentiation, not addressing the pain to an end-user. So, here's a terrible Ford billboard that's been mocked up here. What if Ford just told us what they were trying to do, not how they were helping us. They want to sell cars to middle-class buyers who liked the cars are made here and that they're priced well. This is not a sexy pitch. I have some cool cars. I also have a Ford truck. I didn't buy it because of this. So we really want to move beyond that. In this Ford example, we would probably want that billboard to park into recapturing the freedom of being on the road or their support to the working-class customer base.

Gabe Galvez (00:18:03):

But we don't want to get into this kind of telling them what we're doing but not why we're doing and really humanizing the overall approach. So if you're guilty of ABC co looks to acquire XYZ firm, there's a real opportunity there, both in when and how you say that but also, just is it said at all, that are probably worth revisiting. So instead, what do we want to do? We want to build personal connections and we want to talk about how we help with the pain.

Gabe Galvez (00:18:39):

And on that note, some of you may be familiar with this, and we're not going to get into it here because we'll try to be fairly brief and keep this moving. But there is this idea that all marketing either addresses a pain, is in effect the painkiller, or is a vitamin, and I always like to ask folks, which one are you? Are you solving an acute pain or are you over time creating strength within your target market or your audience in this case? And depending on which side of the coin you may stand, the methodology, the tonality is going to deviate a little bit. So it's always good to ask that question beyond just being kind of a personable human in your language selection, but using I and you pronouns instead of we and they, or again, something that's a little less personal.

Gabe Galvez (00:19:44):

And let's quickly make sure these folks know how we make them stronger, if we're a vitamin company or how we help them experience less pain if we are a painkiller, because again, nobody really cares you're doing today when they hear about you initially. Hopefully we can convert them to having some connection and some shared incentive to continue a conversation. But at that moment of connection, they don't care. All they care about is their own self-interest, which is fine. That's sort of how we're all wired and the best way to incite that connection is to play to that self-interest and let them know how you're going to help them feel better tomorrow or today.

Art Bavelas (00:20:30):

Gabe.

Gabe Galvez (00:20:31):

Yes.

Art Bavelas (00:20:33):

Would you mind if I just asked a question?

Gabe Galvez (00:20:35):

Please.

Art Bavelas (00:20:37):

So in the prior slide, not this one but the one before that, you said there's a real opportunity to change the narrative to address things in a way that are addressing the pain point or not just talking about ourselves. Is the opportunity largely because it's smart to do that and that others are just going to be lazy and revert back to the way that they've done it and send that lazy email?

Gabe Galvez (00:21:09):

Yeah. So, I think you answered the question but I'll validate. That's a great point. Certainly there's an opportunity, but I think by definition, that opportunity only exists because folks aren't doing this in mass. These best practices through a marketing lens, which are pretty common, have yet to been fully adopted by what's a little more traditional of an industry in this family office world, again, staffed with less marketers, more finance management focused folks that have a little bit different of a perspective. So in doing, in fact, what we'll just chat about on this slide and doing just some of these little things, you are in effect differentiating yourselves because nobody else is doing this work. So it doesn't take a big stretch. You don't have to show up in a clown costume shouting at the top of your lungs doing a jig or something like that.

Gabe Galvez (00:22:05):

It doesn't need to get crazy. You just need to move that conversation a few degrees towards the direction that less folks are participating in currently. And here's an example of that, this is a PE growth equity example, but there's still some applicability. So notice the subject line, first of all, can we help? This is hopefully seated in an authentic desire to connect. It doesn't really describe what we're doing. So it's a little click baity in the sense that you have to click it to find out how I'm offering help. As an aside subject line, particularly when you're doing this work via email, are super duper important. You can have this great content body and great content strategy and the right followup cadence and the right tools, and we'll touch on of that stuff. But if that subject line is off putting or not optimized, you're never going to get there.

Gabe Galvez (00:23:04):

So we want to make sure those subject lines are short, that they incite the question or curiosity and not answer the question. Because if they answer the question, I don't have to talk to you anymore. You've given me all the answers. Sometimes we harken that back to some really good SIM or pitch decks, which I'm sure we've all read 1,000 of. The best ones are ones that incite questions, not answer all our questions because if our questions are answered, we don't have to talk to that banker or to that seller on the other line. So short, engaging subject line here. Notice now I'm talking to Charlie as a guy or gal, I guess, in this case, but you know, we're saying, hey, Charlie, my team, again, humanizing this effort, not we, not my company Verdi holdings, none of that.

Gabe Galvez (00:23:52):

And say my team and I, again, anchoring this in kind of my personal connection here, we help people with mature companies who maybe are stuck growing. This is addressing this target pain point of late stage growth being difficult to organically generate for a lot of middle-market owner-operator type folks, and it's just one sentence. Obviously the solicitation would be much more robust, although I advocate for keeping them fairly short, but just in this one subject line and one sentence, we've sort of acknowledged that this is a real guy, that I'm a real guy, that I've got a team, that we have a charter that's to do something other than just transact but instead we are transacting in the context of helping. And you could continue to play off this as the email continues or as the follow-up communications, be it via phone or further email, are rolling out over the period of your entire campaign.

Gabe Galvez (00:24:58):

So let's talk about audience creation real quick, and let's just own something that says right here on the slide, this takes time. You don't just buy a list and beat up the list. You don't just scrape the internet and beat up the end result. Really good audiences take time to develop and they take a lot of testing and a lot of iteration in how we relate to them because there are dynamics that vary between industry, between company size, between your charter. Are you buying folks out, are you making growth investments, are you a significant minority player who otherwise kind of leaves folks alone? These dynamics are going to change how you speak to these folks. But regardless of that, that level of variants and how they communicate, one thing is pretty clear across all verticals, which is this idea that a target is statistically most likely to respond to an email after having read two other emails from you and this of course means that consistency is totally paramount.

Gabe Galvez (00:26:04):

This is not much different than anybody who has been doing business long enough to remember when we all used to work with heavy mailers. And you knew that the first two had grown out, but by that third time, you would know who that brand is and you would maybe make some assumptions about their intentions to reach you.

Gabe Galvez (00:26:23):

So before you're reaching out to any targets, there are a few things you need to have already defined here. Because they don't recognize you until this third touch at minimum, you need to touch each target, particularly if you're doing this via email, which this whole discussion is kind of geared towards. At least three to six times over the course of your first primary outreach cycle, anything less, it's just not good enough. You're cutting off your nose to spite your face, the recipient is likely just aggravated or not engaged. Certainly they're not getting a benefit from any of this, and it also means that you're just going to have more work as you start doing this the right way. It's something that's worth owning early on that this is not just about, good sourcing isn't just about sending big email blasts or sending a lot of letters or making a lot of cold calls.

Gabe Galvez (00:27:21):

It means there needs to be a holistic perspective and activity supporting this workflow, that's a little more than just kind of reaching out and saying, "Hey, are you for sale?" Or, "Hey, do you need a partner?" This is kind of a job to some effect that somebody will need to be accountable for that has some level of expertise in all these little areas that we're touching on. So don't discount that, and I said I wasn't pitching you guys, obviously shameless plug here. We do this so you don't have to hire for this job, you don't have to create this job, you don't have to learn this job, but I'll just leave it at that.

Gabe Galvez (00:28:03):

So as you to start a scaled approach to sourcing, you should ask yourself these questions and I'll just read them right off the slides. Do you have systems to track followups? Do you have the technology to automate organic looking follow-ups over time? Because people respond of course, much better to messaging that looks like it came from somebody who's learning about their business, who cares about their business. And lastly, do you have good tracking to ensure that you know where to focus your efforts?

Gabe Galvez (00:28:39):

We were chatting about this before most folks joined, but there is a certain contingent in the space that will hire groups like us or buy-side firm, or build out a Corp dev team, whatever the avenue is to see more deals, and then they'll get a bunch of deals and then they'll say, stop the clock, everybody. We can't handle this, the volume. And it's an unfortunate reality but I really stress before anybody wants to start doing this work internally, unless they're working with a group like us again who handles all this stuff, do you have a system to track the follow-ups? Do you guys live in a CRM? Do you have a culture of some level of data analytics to figure out maybe we should cold call the prospects that opened an email five times yesterday, instead of the ones that have never opened an email from us. And if we don't have the technology to automate this to look organic, do we at least know what an organic email cadence in the origination space looks like? And we'll touch on that, I think in a slide or two.

Art Bavelas (00:29:47):

So Gabe, it's really interesting to hear you say this, and I'm looking at that slide and I'm going, well, wait a minute. This is like, you have to do these three things.

Gabe Galvez (00:29:58):

Have to.

Art Bavelas (00:29:59):

Yeah.

Gabe Galvez (00:30:00):

These are not, I mean, we're talking about best practices, but the reality is if you don't do this stuff, your campaign is kind of shit. You skip these steps and they will materially impact the success of your campaigns and groups that track the data for this, us being, I think we're the leader, if not one of the leaders in doing this, we'll argue that if you don't have that level of data analytics supporting these multiple prongs of strategy and outreach modality, you're going to be successful, if at all, by sort of luck. Or maybe by the strength of your network, that happens. I'm in the middle of diligence right now on a deal that came from a management consultant I know. I'm the guy who founded this company with this great origination platform and I'm still adding a portfolio company that is just a friendly guy that said, go talk to them. So I don't want to discount that, but when we're talking about scaled effort, you need to check most, if not all of these boxes or the whole thing starts to crumble a little bit.

Art Bavelas (00:31:07):

Outlook in Excel just isn't going to cut it?

Gabe Galvez (00:31:11):

No, and you can maybe get by with that, but there are so many free or low cost sophisticated tools that have good automation and drag and drop programmability, and that look and feel really real. That there's just no excuse to try to square hole round peg or vice versa Excel into your life, let's say. There're just better solutions that can be implemented in a day, really. And I don't want to be cavalier about it because I know some people feel this as a pain, as their culture of their company maybe is maturing at a different rate than others, but it's not that hard and there are so many solutions out there, whether you work with a group like us or cobble it together yourself, that don't involve being a developer or a marketing genius, they really just involve owning these things as truths, going back to that first slide that we have.

Gabe Galvez (00:32:07):

So, let's just touch on what this multi-pronged marketing component is and why it matters because I think it adds to what Arthur is saying here. So very few single channel marketing efforts outperform multichannel efforts. Think about every great company that you're loyal to as a customer, they're getting you for more than one angle. It's not just a billboard, it's not just pay-per-click marketing, it's not just email marketing, it's not just a door knocker. It's some combination of a few of these things or other things that make sense based on the demo and behavior of their market. So before you expect your origination results getting great because you're writing better emails or you have a better sense of how long it takes to get a response or whatever. You still need to do a couple of other things.

Gabe Galvez (00:32:55):

The first one on the slide here says, have a conversion oriented modern website, and I'll even add a little asterisk to that and say, if it's not conversion oriented, that's not the end of the world, but let's make sure it is at least contemporary, functional, and consistent with what your firm is doing today. I've heard so many calls, through CAPTARGET actually, where folks will sniff around to acquire us and you'll reference their website, particularly if it's a family office and you'll hear, " Don't worry about what it says there. We do something different now." Or, "Well, I'm not on the site, but I'm new, but this is my responsibility. So you can deal with me." All of that may be true, but it creates distrust. So let's make sure that website is consistent with the marketing effort, the origination effort, and let's also make sure it's consistent with what's truly going on at your firm. Secondly, let's make sure it's conversion oriented. What does that mean? Well, it doesn't need to be super spammy, it doesn't need to be super salesy, but if somebody...

Gabe Galvez (00:34:03):

.... it doesn't need to be super salesy. But if somebody reads your whole charter or your whole bio or the history of the family or digs into the portfolio, they're spending time on your site. Maybe they've even scrolled through a page or two. So when they get to the bottom of that page, or when they get to the middle of that page, let's ask them for something. Let's try to convert them. And we're in this great industry that luckily is not super salesy. So we don't have to say, "Click here to buy," or, "Click here to sell your company," because that's not how this works, of course, but we might want to say, "Have questions. We'd love to chat about this stuff. Thinking about selling, I can give you an opinion off it if it make senses for us to chat in detail. Wondering what we're up to? Sign up for our newsletter."

Gabe Galvez (00:34:48):

It doesn't have to be a lot, but we always want to balance the give and take. If we're giving them minutes of reading material on the site and they've engaged with that, we've given them something so it's appropriate for us to ask them for something. And again, it doesn't need to be a big ask, but don't be afraid to ask. That ask can be as simple as having contact forms that exists other than your contact page. Let's make it easy for [inaudible 00:35:17] to give us something after we give them something. Secondly, let's make sure that you at least show up in Google. You don't have to have a crazy SEO strategy. You don't have to spend a lot of money on this at all. But if somebody Googles your name, as a principal, or as a professional in a firm, or your firm's name, and you do have a website and you don't show up, it just looks bad. Again, it creates distrust.

Gabe Galvez (00:35:44):

There are marketing strategies, we employ them at CAPTARGET, in fact, that allow you to bid on or to target your competitor's search results, for example. So if you have a weak presence, I can probably buy my way into stealing your entire audience. So if everybody wants to search for, whoever, Arthur's firm, and he's lagging and I'm spending a little bit of money, I own Arthur's real estate on the internet, in effect, because the traffic will see my name every time they ask the internet about Arthur's name. So really, really mission critical before you start doing scaled outreach, via email or any other method.

Gabe Galvez (00:36:28):

And then lastly, have a personal presence online as the individual, as the professional. That could be a LinkedIn page. We all have them here, of course. I'm not super involved with LinkedIn, but I still have a presence. Maybe you have a home for some of your professional authorship. Maybe that's your firm's blog. Maybe that's press releases. Maybe you participate in the local business journal, whatever. Let's just make sure that if I search for you, the person, the guy or the gal, that I at least get validating that you're real and that this is not a stamp or whatever the lowest common assumption is. We need to help diffuse some of that skepticism as early on as possible, and these are the three easiest ways to do that. And family office, to a lesser extent, private equity firms, are notorious for getting pitched crazy expensive websites because they think you have crazy big budgets.

Gabe Galvez (00:37:27):

My firm doesn't spend a lot of money on that, so I can speak to the fact that you don't need to spend a lot of money doing this. You just need to make sure it gets done. You can build a great website for, whatever, $5,000. Certainly you can build one for 50 as well, but if you don't have something, get something and make sure it's at least consistent with the story that's being told out there through your other marketing channels.

Gabe Galvez (00:37:53):

So let's consider this idea of supercharging our sourcing efforts by running retargeting campaigns on LinkedIn, on Google, that are specific to your targets or readers. I don't know how familiar this audience is with the idea of retargeting and we don't need to nerd out on it too much, but retargeting, in its basic form, is placing ads in front of an audience that has already taken some kind of action that you've measured. So that could be, I want to show a display ad to every person that read this email more than five times. I want to show a note in LinkedIn to anybody who visited my website last week.

Gabe Galvez (00:38:43):

There are a number of these conditions that exist, and digital marketing firms do this. This isn't something CAPTARGET does, although I have a little bit of a digital marketing background myself so I have some level of familiarity. This is just an example. But LinkedIn has a whole paid retargeting platform where you can say, "Hey, if they visited my website and didn't fill out a contact form, let's make sure, see at least my brand name a number of times, or at least a note from somebody in their in-mail." Again, just one example. You can re-target on Google, on Facebook, on e-comm platforms, in professional publications. There's plenty of places that use the similar structure to monetize their traffic.

Gabe Galvez (00:39:29):

So let's take a step back. We touched on this briefly, but content line or subject line content strategies. Our whole strategy doesn't matter if somebody doesn't read the email. That's the whole name of this game? How do we get them to open an email? And secondarily, how do we get them to open an email without diluting our professionalism, our value proposition, whatever? We don't want to say scary spammy stuff. But here's a great example from me to somebody, and it's personalized. Hey Mike. Mike, what do you think? There's a higher chance Mike clicks on this to say, "What the heck is this guy talking about? I think he sent me an email before," than a more verbose, longer, less personal approach. So as it says on the slides, to increase open rates, let's make sure they're personalized. Putting a company name and a subject line, a target company name in the subject line, super, super productive.

Gabe Galvez (00:40:38):

Use plain language. Don't use jargon. We don't want to confuse people. Let's keep the subject lines very, very short. We're in an industry where a lot of us are notorious for these crazy long subject lines that say some big technical thing that nobody really cares about. And format like a human being. That means maybe your punctuation isn't perfect. Maybe there's no punctuation at all. It's a subject line. Maybe your capitalization is a little informal. I'm not saying write wacky emails, but in this case, maybe I don't need the comma. Maybe I don't need the question mark, whatever. Make it look like a human being wrote it and not a copy editor or a piece of technology that's being used to optimize subject lines. Just be real with it.

Gabe Galvez (00:41:33):

So, a couple examples. The before. Seeking to make investments in DSOs over $2 million in EBITDA. Too long, it's got industry jargon, it's got abbreviations. This makes all the mistakes. And we've all probably sent this email at some point. So after suggestions, maybe it's simply ABC Co/XYZ buyer. Looking to connect. Can we have a conversation? It's okay to ask a question in a subject line as long as it is authentic. If your email subject lines are good, somebody's going to read the body of your email content, so now we need to talk a little bit about those best practices, then we'll talk about what systems to use and then we will wrap up. So regardless of what your email says, there are some standard operating procedures that we need to not deviate from. Shorter is better. Write in first person, as a person, to another person. So company to company, no good. Person to company, no good. Company to person, no good. All those combinations, the only one that really works is person to person.

Gabe Galvez (00:42:50):

And the little technical note, keep hyperlink inclusions two or less. I would really encourage you to keep hyperlink inclusions to one or zero. For those of you who aren't familiar with the term, I'm pretty sure everybody is at this point, but some of you all, on our clients and everybody in the space, really like to link out in their email. They link to their LinkedIn, their website, their most recent deal announcement, a criteria sheet. And you end up with 5, 6, 7 hyperlinks in your email. And what that does is it gives fodder to Google and to other email hosting platforms and content management systems and all the technology that these things flow through to view your messaging as spam at a higher rate, because spam, by definition, wants you to go from email to a web destination. A real person isn't as concerned about that. They want to have a conversation.

Gabe Galvez (00:43:55):

So if you're writing an email that has your whole bio and your whole thesis and all these links out, there's a high, high chance it's not even getting to the reader. So nothing else matters because Google or whoever, Microsoft most commonly and Google, have sandboxed your email and said, "This is likely spam," and nobody ever gets to see it. So three really simple takeaways here when you're writing emails. If I could see six sentence emails as a max, and we don't hardcore enforce this, but that's where I would be. If this is more than two paragraphs or more than a single page height, you've already gone off the rails.

Gabe Galvez (00:44:38):

Couple other notes. Don't send branded emails, HTML rich emails, if at all possible. So emails that have borders, that have logos, that have... HTML code needs to be rendered to go from code to an image, from code to a color, from something other than plain text is going to be increasing your probability of spam flagging and also creating many more possible rendering issues across platform. So we want to make sure this works for everybody at the lowest common denominator. Again, use clear calls to action. Don't be afraid to ask for something. Instead of saying, "I'll follow up with you in a couple of weeks if I don't hear from you," which is fine, consider saying, " If you'd like to set up a call or whatever, if you'd like to chat, call me at this number." Tell them what the next step is, make sure it's consistent with the rest of your message, and just put it out there. We're not in an industry, again, that gets really, by now, salesy. So don't be afraid to say, "Click here to learn more. Call me here. Write me back, I want to talk to you."

Gabe Galvez (00:45:57):

And lastly, and this is a big one, don't attach anything to your email ever. I don't want to see a deal sheet. I don't want to see a bio. I don't want to see an academic article you just wrote. It just tells the internet it's spam because we have an unknown user, maybe if you've made some of these other mistakes, we have a lot of hyperlinks, we have a long email, and then we have an attachment. So whether or not the end-user finds value in the attachment or not is a moot point, because if you do this, the chances of them ever seeing the email, and thus the attachment, are measurably, measurably reduced.

Art Bavelas (00:46:35):

So Gabe, that's super interesting, because the platforms, Mailchimp, HubSpot, you just go down the list, they're all forcing you into creating this, what is arguably a professional image with the borders and the so forth. But I happen to know what you're saying to be true. It just gets caught. It never gets there.

Gabe Galvez (00:47:03):

Yeah. I think a lot of those companies, let's use Mailchimp as an example, which is a great platform, you shouldn't use it for this. And if anybody wants to know, I can get into those details later, but use them as an example. So why do they have this whole push for HTML rich emails? Because it's their value proposition. They want to do something for you you can't do for yourself. Maybe Arthur can't go in there and write all this HTML code. So they give you something you can't do, and hopefully you think that's fun and it engages you in the platform and you think there's value there. And there are instances where there are value there, but not in this industry. You've got a flower shop and you're having a sale, great. Let's put flowers to an opt-in audience that has signed up for your mailing list, great. Coupon, print it, click to view, whatever. All that is awesome. We're not in that space. And it only negatively impacts campaigns. So what does a good campaign look like? Well, here's some industry averages. And we're well over 1,000 customers at this point that we've touched and done work similar or exactly like what I'm describing. You should be able to get an open rate in 20% rate. You should be able to get a click through rate of about 18%. And by touch three, you should have about 60% of your overall activity. So if you're running campaigns and you've got single digit open rates, or your click through rates are really modest, or you're not even getting to a touch three, there's probably an opportunity for you or for groups like us or some other solutions to really augment and improve the overall productivity of these campaigns.

Gabe Galvez (00:48:49):

So lastly, let's talk about systems consideration. This is just piggybacking on what Art had just chimed in about. So first, let's just own this idea that not all email systems are the same. Big difference in architecture, in compliance between HubSpot, let's say, as Art mentioned, to MailChimp, to using AWS on a wholesale basis and sending emails from [inaudible 00:49:14]. Extreme other version. So firms that use any of these following have a big opportunity to improve deliverability. If you're manually sending on a one-off basis, there's just better ways to do it. If you're using MailChimp or an opt-in based system, a system that requires you to validate that the recipient has agreed to receive an email, you're likely going to have issues, particularly if they haven't actually agreed, if they're not opt in.

Gabe Galvez (00:49:46):

And if anybody ever wants to get into, not our companies, but my perspective on canned spam compliance here, to a lesser extent, Canadian compliance, which has some of its own elements, I'd be happy to chat about that offline or we can go that way, because we are in the business of cold soliciting folks, but we're not in the business of cold soliciting folks and selling stuff. We're in the business of cold soliciting folks and giving them millions of dollars. And that gives us a certain level of flexibility and has certain implications on the compliance verbiage as a trip.

Gabe Galvez (00:50:23):

Lastly, if you're using fragmented systems, where somebody is using an old act system, you're [inaudible 00:50:31] manually, the followups are coming from a automated system but the original source email is coming from a personal center, we've seen all of this. If you're doing any version of any of this stuff, there's way easy, simple ways to improve the efficacy of the campaigns. So let's talk now specifically about what you should look for in an email campaign. And again, we've solved this problem internally, so if you want to go down this road, you can pay us-

Gabe Galvez (00:51:03):

...This problem internally. So if you don't even want to go down this road, you can pay us like a couple thousand dollars a month. We'll run all your campaigns. We'll never take a deal fee, and you can stop listening right now, but I think it's still good to have an understanding of what systems make campaigns really pop.

Gabe Galvez (00:51:16):

You need one-to-one sending. That means that the email is actually sent on a one at a time basis. The challenges with one-to-one sending, one of the challenges, become you can't exactly schedule when an email goes out, because if I have a list of 50,000 and I'm sending on a one-to-one basis and I want it to look real and organic, sending that 50,000 emails, it might take whatever, insert timeframe. It might take an hour. It might take a couple hours. So it doesn't work for eCommerce companies that are having a fire sale tonight at midnight, but it does work for family offices who just need to communicate fairly regularly with their audience.

Gabe Galvez (00:51:58):

You need a system with no opt-in requirement. Most systems that don't have an opt-in requirement, and they are fairly rare, will ask you to certify that what you're doing is in compliance. And again, if anybody wants to hear just my personal perspective on that at some other time, we can go into that. But generally speaking, we're not doing spammy stuff. You're not doing spammy stuff. We're deploying capital. We're creating jobs. It's not the same thing.

Gabe Galvez (00:52:25):

You need to have the ability to truly send plain text. So Arthur mentioned MailChimp, as we've discussed briefly. MailChimp is one of these systems, and this may have changed recently, but when you click the plain text template, it's actually an HTML template that's rendering to look like plain text. It's not actually plain text. It's a white background that renders on a screen with black text. It's not just text on a little simple stripped down text. So make sure you're sending plain text.

Gabe Galvez (00:52:59):

Make sure you have analytics. Again, we want those analytics to drive your behavior. CAPTARGET clients get reports at the end of every other week that says, call these people. These people are exhibiting behavior that is indicative of a party that's interested. So you need to have the ability to pinpoint folks in that 50,000 person list, as an example, so you're not spending the time and the money cold calling 50,000 people when there are likely only 100 that are true prospects for whatever your ask is. And then lastly, let's make sure your system talks to your CRM, whether it's just a CSV, mail-merge, whether it's something more robust like HubSpot offers, for example, or Salesforce. We have some other systems that work very well. Make sure you're leveraging the technology in a way that makes this easier for you.

Gabe Galvez (00:53:58):

So this number is actually modest, but let's use it because it's on the deck and I didn't update it this morning, but choosing the right system can, will impact your delivery rates by a minimum of 20%. At scale, think about 20% variance on people getting a message from you. If you're in the business of talking to every MSP in America, whatever, there's tens of thousands of them. If 20% more of them know your brand's name and know that you're a real person on the other end, who has real interest in their business, and know that they're following or being followed up with in an organic, appropriate way, and we know that the data's there to track who these people are and how to deploy our resources following these campaigns into converting them, it's huge. 20% gains in this space is incredible. And it's probably right at the fingertips of at least some margin of folks listening to me talk right now.

Gabe Galvez (00:55:03):

So that was kind of a bit of a wrap-up already. This is a holistic thing, right? If your subject line sucks, your body doesn't matter. If your body copy is not compliant, nobody's even going to get the email. If the systems don't exist there, you're not going to have the visibility to take secondary actions. If you choose the wrong platform, you could be banned before you ever get a lead. If you're not thinking about this through the lens of marketing, you're likely missing all these other steps. So just that full circle moment.

Gabe Galvez (00:55:36):

And then we can Q&A, if there's anything that you have, Arthur, but the one takeaway here beyond the technical elements is good origination is [inaudible 00:55:46], if not mirrors, good marketing. And if we're not thinking about this through the lens of a marketeer, we're leaving a tremendous amount of opportunity on the table.

Art Bavelas (00:55:56):

Totally makes sense. That was super helpful. And I'm not just saying that. I learned a bunch through that, and I hope everybody else did. There's a couple questions that we sort of can meld together, maybe, if that's okay, Gabe.

Gabe Galvez (00:56:13):

Sure.

Art Bavelas (00:56:15):

So one of the questions was what's your favorite engagement? What's your ideal engagement? Maybe you could answer that by using an example of how you helped an engagement that not only worked out well, but you can truly help.

Gabe Galvez (00:56:34):

Sure. And there's a few iterations, I think, of what that could look like. We love working with groups that either have a really modestly sized, dare I say under-resourced origination, corporate development, business development team. You know, it's one guy, it's one gal in a room, and they're trying to boil the ocean. They're trying to deploy a billion dollars somehow, and they need to generate that lead flow. We can make that one guy or gal feel like a team of five or six, of having the technology, of having that marketing focus, of having somebody doing the research, finding the targets, writing the emails, doing the follow-up, tracking the data.

Gabe Galvez (00:57:19):

So I love really empowering really small teams. As an aside, I also like creating really small teams when you have a big bloated team, and you realize that it can be done using smarter resources like us. I remember walking into a firm, who I won't name, it's unimportant, but Chicago group, in the loop there, classic group. And the first day we met with them, they had I want to say like 15 interns calling in a bullpen. Can't speak to their level of quality or qualification, but it is what it was. I mean, we've all been in that office.

Gabe Galvez (00:58:02):

And they started working with us. And then I think maybe six months later, I was back for a trade show and just went to say hi and talk to the MDs, whatever. And that bullpen became file storage. There was nobody there. God bless them, those 15 interns had to find something else to do. But I think there are two real examples of how do we either take it [inaudible 00:58:23] maybe a little under-resourced or maybe a little under-sophisticated in this context of best practices, and elevate them, or how do we take a team that's maybe not as productive, maybe a little more expensive, and thin that out to where there's real ROI on the money being spent.

Gabe Galvez (00:58:40):

There is a third answer. It's probably less applicable here, but I will mention it. Really big groups that have a lot of arrows in the quiver love working with us, because it's a nominal cost and it's just a hedge against the bed of what else they're doing. So we have worked with some mega, mega funds, mega offices, in that five B, nine, 10 B range.

Art Bavelas (00:59:09):

Yeah, why not do it?

Gabe Galvez (00:59:10):

Exactly. I mean, they're looking at our costs and saying, oh, it's three grand a month, it's four grand a month, and we can close one or two extra deals that we wouldn't find. Normally we'd be paying a buy-side firm. Maybe they're getting a Lehman, a double Lehman. Some buy-side firms are getting five points right now because of some market dynamics. So if you buy a $30 million company and pay somebody five points, I'm not going to try to do the math because I haven't had to do math in a year, but sure as hell that the 20 grand or 30 grand you paid us over the course of the year, hopefully to source much more than that one closed deal, has created some really attractive economics.

Gabe Galvez (00:59:48):

So if you care about your cost to close, if you need help scaling up your effort, or if there's an opportunity to maybe take a smarter approach at what you're doing, those are great, great fits. If you need a band-aid, you just need to close a deal next month, if you don't have even a modest budget, or if you don't have the desire or capacity to handle scaled lead flow, we're probably not the best solution.

Art Bavelas (01:00:17):

Perfect. That was really quite good. I really appreciate it. Alex, I'm so glad we got to meet and do this. We fortunately had a bunch of people hang in there way beyond the planned time, which is totally cool, and appreciate that. So why don't you say hi, Alex, and then maybe wrap it up, Gabe, and then we'll make sure you get in touch with everybody that registered.

Alex (01:00:44):

Yeah. I just [crosstalk 01:00:45], comment, too, great job, Gabe, is one of the things ... I've been at CAPTARGET for four years running business development, and early on, I was listening on a call with a family office, and you had mentioned family offices kind of moving off the we have a billion dollars, don't call us, we'll call you kind of thing. And I was curious to see both of your comments coming from that space. If you see, especially during COVID, more folks going direct, sort of coming out of that untransparent opaqueness and having a brand and going directly, maybe even off the kind of LP model and doing some more direct, inquisitive investing.

Gabe Galvez (01:01:27):

I mean, I think it's the, not even wave of the future, I think it's the requirement of the present, really. I mean, I worked for a firm like that. We didn't even have a website. I mean, this was 20 years ago or whatever, but we said, we got all this money, you don't need to know how to get ahold of me. If I want to talk to you, I'll talk to you. I'm the guy. But look, I mean, there were 5,000 committed funds then, and a modest amount of family offices. Now there's 12, 15,000 committed funds and three times more family offices. So I can't just wait around for somebody to call me because they've got some money.

Gabe Galvez (01:02:03):

And the audience has gotten more sophisticated, where money is not, the capital component is important, but it's not the end all be all. Folks are looking for fit. They're looking for leadership. They're looking for vision. They're looking for strategic value that comes from really smart partnerships now. So we can't just rely on, "Hey, I'll call you if I want to buy you." And Alex, maybe Arthur, who knows, it reminds me of old South Park, where they had the Bill Gates character who would just say, "Buy them out." And he would come out of his room and just, they would buy them out. And that was all that needed to be said. We're beyond buy them out at this point and really need to engage with our market.

Art Bavelas (01:02:46):

Yeah. Alex, maybe the two questions that I hear most often is what family offices want. Let me posit it that way. I want to know what my peers are doing. And I want to look at deal flow that hasn't been picked over by everybody else. Those are the two most prevalent things that I hear. And it's been, even though one would think, as you've suggested, that COVID has changed things, it was pre-COVID, as well. And being that it's somewhat counterintuitive that you would think that there's more deal flow coming to their door than they could otherwise look at. That's true, but it's not the deal flow that they want to see.

Art Bavelas (01:03:37):

So having, and by the way, this plays right into what you do. But if I can narrow the fire hose for stuff that hasn't been looked at and rejected by everybody else and fits into my box, whatever that is, even if my box changes, which often happens with family offices, that's worth a lot of money.

Gabe Galvez (01:04:02):

Well, I think it's a great example of the age old adage that I'm sure we're all too familiar with, but this idea that more is not better, right? And a lot of platforms focus on more. See every deal, every listing. And first of all, everybody sees all those deals. Everybody sees every listing. And we're really in this better is better bucket. And if you have a really restrictive mandate or a really niche mandate, that's fine. You might only see two leads a month from us. Hopefully the value of those leads is commensurate to the cost and whatever, but we're not in the drown you with deal flow game. We're in the how do we properly, again, through this best practices lens, assess what the market opportunity is.

Gabe Galvez (01:04:48):

And if that's only two companies, we better be the ones to find those two companies. If it's hundreds of companies, fine, but it's not about volume. And we often get asked, kind of like you just mentioned, well, how many leads am I going to see? What am I going to get here? I need to see stuff that nobody's seeing. And we are very quick to say, I don't know, nobody knows.

Art Bavelas (01:05:11):

We've got to try. Yeah, we've got to try.

Gabe Galvez (01:05:13):

We need to apply what we know works best in the space in conjunction with your mandate, and the output is going to be the output. And if it's not any greater than what we do, within some margin of error, that's it. You don't have a big market. And that's okay. But we want to be the ones to be able to say that definitively, rather than have a group maybe not utilize these tools and these processes and sit around and scratch their heads and say, I wonder if there's more deals out there. We want to get you to the place where you say, look, there's only two deals that fit the part here. Let's go get them.

Art Bavelas (01:05:47):

Yep. I love the people ... I get criticized all the time because people ask me about an outcome and I say, we'll see. We will see. This has been super helpful.

Gabe Galvez (01:06:00):

It's all we've got.

Art Bavelas (01:06:01):

Thank you guys for doing this. And Alex, thank you again for having our first chat, and Gabe, and doing this. And thank you everybody for being here. We'll make sure everybody gets in touch. And as I always say, thank you for sharing with us the only thing you can't make more of, and that's your time. Until next time.

Gabe Galvez (01:06:21):

Absolutely.

Alex (01:06:22):

Thanks, Art.

Gabe Galvez (01:06:23):

We appreciate it. Thank you guys so much. Take care.

Alex (01:06:25):

Bye.

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