Venture capital and private equity firms failing on communication front

A lack of communication from private equity and venture capital firms is having a detrimental impact on reputation, a new survey suggests.

Investment firms are committing ‘school boy errors’ by not disclosing relevant information across online and social media platforms.

According to The GP Stakeholder Communications Survey, venture capital and private equity firms are harming the perception held by limited partners (LPs), business owners, corporate financiers and journalists.

The piece of research canvassed 500 general partners (GPs) and those firms’ associated stakeholders to find out what viewpoints are held.

Amongst the findings were the revelations that 54 per cent of firms do not provide contact details for investment staff, 30 per cent don’t disclose which deals are desirable and 95 per cent of business owners believe that firms need to improve communications.

Emma Payne, director at Pivot Partners, comments, ‘Smart firms can avoid the school boy errors of their peers by clearly explaining their investment criteria and making sure that names and contact details for key staff are easy to find online.

‘LPs, management teams and the media wish that GPs would communicate with them better – those that do will see the benefits.’

More on private equity and venture capital:

The GP Stakeholder Communications Survey has also addressed how investment firms use social media to communicate with stakeholders. With research showing that 82 per cent of business owners aiming to raise finance use LinkedIn to research firms, 72 per cent of LPs investigating GPs and team members on the same platform, the study finds that 50 per cent of GPs do not understand the value of social media.

Of the 300 firms interviewed, 181 owned a LinkedIn account – and only 25 per cent linked to it from the firm’s website.

The top three LinkedIn firms by followers are Blackstone, Sequoia and Bain Capital, while the top three Twitter accounts are held by Sequoia, First Round and Greylock. Of the 96 corporate Twitter accounts that were found to be held by the 300 firms questioned, those that provided a link to the account from the website had an average of 6,670 followers – rather than the 869 which didn’t.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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Private Equity