The QOF Blueprint: A Quarter By Quarter Strategy Guide For Raising Capital

Understanding the seasonality of qualified opportunity zone funds is integral to successfully creating a strategy and achieving your goals for raising capital. And while quarterly trends teach us that the second and fourth quarters of each year typically account for the majority of annual transaction activity, each quarter offers potential that you won’t want to leave behind.

FIRST QUARTER (Q1)

It’s important to keep in mind that Q1 is the slowest time of the year for raising capital, so don’t get disappointed or lose steam during the slow season. This is the ideal window to nail down your strategy and do the prep work to be successful. Not sure how to get started? Here’s a checklist of five necessary actions:

1. Look at the data. The first quarter is a great time to analyze the results of the previous Q4 and previous year as a whole. Most funds have two to three-year fund raises. If you haven’t just started fund raising, this is your chance to learn from previous quarters. The data is there, so why not use it to make positive changes that can affect your bottom line?
   
   
2. Budget for the year. Begin to budget out your marketing and advertising spends for the next 6 to 12 months. Map out a calendar and create a media plan that fits with your financial needs and goals. Advertising is a great way to tell a compelling story to educate your audience, increase trust, and build interest in your fund.
   
   
3. Partner with a CPA. Tax season is just around the corner, so partnering with a CPA firm can prove fruitful leading up to the April 15th deadline. Partnerships can build credibility, help deliver your messaging to high-net-worth clients, boost brand equity, and provide valuable information.
   
   
4. Enhance your website content and design. This is a great time to redesign or give your website a facelift. Take advantage of the slow season to make sure your website is current, aesthetically pleasing, easy to navigate, and provides the information visitors are looking for. This is the first thing that many investors will see, so make it can be key to making a good first impression.
   
   
5. Prep your marketing campaigns and your marketing infrastructure. You need to be prepared for the Q2 rush. All your campaigns should create a sense of urgency to get investors to invest in your fund during Q2. If you don’t have an in-house marketing team or need extra marketing muscle, using a marketing agency is a cost-effective solution to consider.

SECOND QUARTER (Q2)

The Big Push! The April 15th deadline has taxes on everyone's mind. But that’s not the only deadline coming up. June 28th is also coming up. If anyone received capital gains from the previous year from the sale of business or real estate, they have to be recognized on 12/31. With June 28th exactly 180 days away, in order to deploy the capital gain and be eligible for a QOF, they must make investment by that date. These tend to be larger gains as well, so this deadline is critical if you’re looking to acquire those larger investors. So, what are the top three things you need to be doing?

1. Implement a final marketing strategy. Make sure you capitalize on taxes being due by deploying marketing campaigns 45 days prior and leading up to the tax deadline. This is a short window that you don’t want to miss.
   
   
2. Stay on top of your deadlines. Q2 is the second busiest season of the year. While July is the slowest month of the year, those two deadlines will keep you plenty busy if you prepared properly in Q1. This isn’t the time to rest. This is the time to make things happen.
   
   
3. Ensure your marketing and investor relations teams align. Everything from infrastructure to messaging to culture need to be in sync at all times. Using an external agency is one way to check this off your list.Agencies are focused on results and can refine this area of your business while you focus on other aspects.
   
   

THIRD QUARTER (Q3)

The second slowest season of the year. Summer is in full swing, and investors are checked out. But now isn’t the time for you to rest. There is actually a lot to be done in Q3, especially with the Q4 MEGA rush looming on the horizon. Check out our top 5 recommendations for Q3:

1. Dig in on the numbers. Take a moment to catch your breath then focus on analyzing Q1 and Q2 performance and year-to-date numbers. What went right? What went wrong? What’s next? Use your findings for Q1 and Q2 to begin to strategize for Q4.
   
   
2. Continue to lock in your CPA partnership. Tax season is just around the corner for HNWs (High Net Worth) individuals, so partnering with a CPA firm can prove fruitful when the September 15th and the October 15 tax deadlines for business and personal extensions come up. It’s a relationship worth cultivating.
   
   
3. Tweak your marketing campaigns and your marketing infrastructure. Be prepared for the rush of Q4. Make sure everything is in place and moving smoothly. Make changes if needed. OZ Funds typically raise 60 to 70 percent of their capital in Q4 so make sure your campaigns create a sense of urgency. Motivate investors to invest in your fund before the year is over. 
   
   
4. Increase your head count. Make certain you have the right team in place to facilitate the Q4 rush. This could mean hiring full-time employees or choosing to be cost effective by hiring a marketing agency or contract workers. Working with a marketing agency gives you access to industry experts who can effectively manage your campaigns. Less stress for you and better results for your business.
   
   
5. Double check your marketing and investor relations teams align. Once again, it’s important to check back in on your marketing and investor relations teams’ alignment. With Q4 on its way, this is the time to make sure everyone is on the same page.
   
   

FOURTH QUARTER (Q4)

It’s the final grind! The clock starts ticking October 1st, which means now is the time to hit the ground running and execute on your plans. Use the closing window to your advantage. Investors tend to procrastinate with OZ Fund investing, but if they waited this long, they are now standing on a ledge and need to make a choice. You can use this ticking clock to your advantage and create a sense of urgency around it. How?

1. Send dedicated emails to investors. Remind investors that they only have 90 days remaining to invest, 60 days, 30 days, 10 days, etc. Ramp up the urgency with each email. Really hone in on the messaging that this is their last chance and the time to act is now. Inspire action.
2. Rekindle your database. You worked hard all year and generated a lot of leads. Some invested, but most of them did not. Take this opportunity to re-engage with investors you had conversations with earlier in the year. Make phone calls and send personalized emails giving them fund updates and reminding them about the end of the year deadline.
   
   
3. Work your current investor pool. Don’t forget the investors you already have. Your past investors are a huge asset to your fund, so it’s crucial to maintain a strong relationship with them. Anything you can do to put yourself top of mind is good. Send them holiday gifts. Call them and check in to see how the end of their year is going. Email to offer to answer any investing questions that come up naturally.
   
   
4. Prioritize your Google Search Ads spending. If you don’t already have a Google Search Ads campaign strategy, implement one immediately. If you do already have Google Search Ads campaigns, increase your spending. Opportunity Zone related search term queries increase by 120% during Q4, so make sure you capitalize on that traffic. You want your fund to pop up at the top of the Google Search results. Investors tend to do research themselves before they raise their hand to speak to investor relations, so capture this traffic and get them to a relevant landing page that showcases your fund and makes it easy for them to contact you. If you aren’t experienced in Google Adwords, reach out to an expert in Opportunity Zones related search terms. They can help you target your ads, control costs, measure success, and manage your campaigns.
   
   
5. Confirm you have an efficient process in place. It should be as easy as possible to complete your subscription agreement and receive investor funds. When an investor is ready to pull the trigger, don’t add additional friction to the signing process. Make sure you have e-signature software for your subscription agreement and clear documentation for the wiring instructions. It’s not impossible for deals to come in on December 29th, sign and close the same day, and the money show up in the bank account the next morning right before the end of year deadline. Don’t miss out on last minute investors.
   
   

By understanding the nature and seasonality of qualified opportunity zone funds, you can create and implement a successful strategy that will achieve your goals for raising capital.

Need help with your Qualified Opportunity Fund's marketing and and investor relations efforts? With over four years of experience helping QOFs raise capital, The Hubert Group is the premiere Qualified Opportunity Fund agency.

Contact us today for a free consultation.