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Case Study:
Investment Memorandum
How we prepared a compelling investor pitch deck and helped Jay and Daniel charge $150,000 more in (well-deserved) fees
Disclaimer:
The details and assumptions in this case study have been modified to protect deal confidentiality and are presented for illustrative purposes only.
"While we were confident in our land development expertise, we needed guidance on structuring our deal and presenting it to investors... What makes Accentir special is their dedication to teaching along the way. ​They didn't just handle everything for us - they made sure we understood the whole process, from deal structuring to investor presentations. The value we received far exceeded our investment. It's clear they genuinely care about their clients' success, and we'd strongly recommend them to any real estate professionals looking to step up their capital raising game."
— Daniel Earhart, Royal Investment Properties
Overview
Daniel and Jay are experienced land developers with a strong track record in identifying and investing in underappreciated rural vacant land. Royal Investment Properties was founded in in 2015 as a side project, and has quickly grown into a thriving business with substantial potential.
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Recently, Daniel and Jay identified an exciting new opportunity to develop a flex storage facility—a hybrid of flex space and storage. For the first time, they are raising investor equity, having previously funded all their projects themselves. They approached us for help in preparing a professional investment memorandum and seeking guidance on pitching to investors effectively.
Challenges
Jay and Daniel came to us with a solid foundation—a strong track record in land development and a promising new project—but needed additional support to ensure their first syndication was successful.
1. Education on Syndication Fees and Incentive Structures
While Jay and Daniel had a basic financial model, it lacked the robustness required for presenting to investors. We identified that a more detailed and polished model was essential, as it would be a centerpiece of their investment memorandum and critical to gaining investor confidence.
2. Gaps in Syndication Knowledge
As this was their first time syndicating, they were unfamiliar with standard fees and incentive structures typically charged by developers. We stepped in to educate them on industry norms and helped them structure a compelling and fair syndication plan.
3. Need for Assembling Materials
Jay and Daniel provided a construction budget, a basic financial model, and a few project images, but they lacked a cohesive pitch deck. We took the lead in identifying the missing pieces, guiding them on what a professional investment memorandum should include, and worked collaboratively to gather all necessary information.
Conclusion
We needed to build a more robust financial model, educate Jay and Daniel on industry-standard syndication practices, and create a professional investment memorandum from the ground up, ensuring all essential elements were included to make their pitch compelling and investor-ready.
Our Solutions
1. Education on Syndication Fees and Incentive Structures
During our first call, we realized Jay and Daniel weren’t charging standard developer fees. We immediately showed them how they were leaving $150,000 in fees on the table, excluding incentive fees. We also explained how a promote waterfall structure works and coached them on how to present it confidently to potential investors.
2. Audited and Improved the Financial Model
We conducted a comprehensive review of their existing financial model and discovered a critical error—the exit price was being underestimated because it was based on today’s NOI rather than future value. After correcting this, their projected returns improved significantly, providing a stronger pitch to investors.
3. Sourced and Analyzed Market Data
To validate and refine their assumptions, we sourced market reports and discussed each assumption with them in detail. We showed them how we derived the comps, adjusted for market nuances, and arrived at accurate rental rates and valuations to ensure the financial projections were reliable.
4. Effective and Beautifully-Designed Investment Memorandum
We prepared a polished, investor-ready memorandum that adhered to standard formats. The document covered the project details, market analysis, and their team’s track record, presenting a compelling case for why investors should partner with them.
Outcome
Jay and Daniel walked away with a professional, investor-ready investment memorandum, a robust and accurate financial model, and a clear understanding of industry-standard syndication practices.
Beyond the deliverables, they gained valuable insights into the process, from structuring deals to validating assumptions with market data. Equipped with this knowledge and the confidence to explain their business plan, they felt prepared to pitch their project to investors, effectively communicate its value, and address potential questions with ease.
With their improved materials and newfound clarity, they were ready to secure the equity needed to bring their vision to life.