The Guide to High-Net-Worth Capital - Chapter 1: Know Your Customer

Know Your Customer

Imagine trying to sell to a customer who doesn’t want to be found, doesn’t trust salespeople, and (let’s be honest) is already living a pretty good life without your product.

That’s the daily challenge in the world we’re about to explore.

“Know Your Customer” is a common term in private equity investing relating to anti-money laundering, identity verification, and essentially ensuring investors aren’t laundering capital for criminal enterprises. 

When talking about capital markets and soliciting investments from the top 1% to .01% of the U.S. population, a different kind of ‘Know Your Customer’ becomes essential to your success.

Specifically, how can you use customer data to efficiently  find, target, and message prospective investors online and offline?

High-net-worth (HNW) individuals are a  large and growing source of capital for private real estate investment offerings. 

High-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals are the ideal audience for CRE capital raises. While definitions of HNW/UHNW can be a bit amorphous, accredited investors are a close approximation to the lower limit of HNWs.

Accredited Investors are defined by the SEC as individuals with income of at least $200,000 per year ($300k for married households) or a minimum of $1MM in investable capital.*  Accredited investors form the lower bounds for U.S. firms soliciting individual investments exempted by Regulation D 506(c). 

Total Addressable Market of accredited investors and higher net worths, currently totals 22 million households in the U.S.

This is a challenging audience to engage. The individuals you want to talk with have years, in many cases decades, building walls between themselves and people like you; Salespeople, Wealth Advisors. Broker-Dealers, and Sponsors.

HNWs/UHNWs are sophisticated. They're not browsing Yahoo waiting for someone to pitch them value-add Multifamily. They’re busy. They’re wary. When they do see investment-related content in their inbox or feed, their default assumption is spam (at best). At worst - a potential scam.

Your task should you choose to accept it? 

Get your deal in front of HNWs and UHNWs - but do it in a way that doesn’t look like a sales pitch.

Mission Impossible? 

Not if you learn from other people’s (VC-funded) mistakes (aka: my mistakes). 

Read on to learn some of the tactics developed while helping raise over $5B in CRE capital from high-net-worth investors.*

Finding the Invisible

High-net-worth individuals don’t leave fingerprints - digitally speaking. 

HNW/UHNWs are ghosting the internet on purpose. They use data removal services to scrub personal data from public view. No mailing address, no phone number, no personally-identifiable information (PII) to scrape and target. 

Behavioral targeting? Demographic filtering? Neither works well when targeting HNWs.

Prior helping build the first investor platforms at Crowd Street and Cadre -   I spent 15 years in senior exec roles at Omnicom and Interpublic Group (IPG) agencies - and the most advanced real-time ad systems in the digital advertising world.

These were high-frequency, programmatic trading desks that bid on specific users’ ad impressions via 100-millisecond, software-managed ad placement auctions (fun stuff).  

When I joined Crowd Street in 2015 as their first VP of Marketing, I was excited to apply these programmatic advertising skills to recruiting HNW/UHNW investors.. 

I failed miserably.

I quickly learned that standard marketing tactics don’t work with high-net-worth individuals. Overt marketing messages are viewed as spam, off-the-shelf audience targeting options are largely ineffective, and the data needed to effectively engage with eligible investors is tightly guarded.

Many digital platforms claim to be able to target HNW/UHNW prospects (META, Google, LinkedIn, and countless digital agencies) however, when I looked deeper, all were built on flawed data and assumptions.

It came down to something called inferred data. 

Inferred data is data that is calculated rather than directly observed. An example is using a user’s behavioral data (pages visited, links clicked, topics followed, etc.) to assign them to an audience classification (eg: a high-net-worth individual).

Off-the-shelf ad tools can easily target people who visit the Bentley page on META - but chances are, these are more often fans than owners. Same with Gucci, Rolex, Patek Philippe, and Gulfstream. Aspirational behavior does not equate with actual high-net-worth.

The dirty little secret here is that wealthy individuals behave a lot like everyone else online. The few things they do differently - they actively hide.

LinkedIn Is Not the Answer

Ah, LinkedIn. The siren song of Investment teams everywhere.

“We’ll just find them on LinkedIn,” someone always says. “They’re all business people, right?”

Except -  they’re not. Not anymore. 

The HNW and UHNW crowd? Nearly all are retired. Or semi-retired. Most spend time online investing and sharing advice in private groups like 506 Group or Tiger 21. 

They don’t need a job. They need to network. And the last place you’ll find them is hanging out on LinkedIn.

In my early days at Crowd Street I did a customer survey with an older gentleman - early 70s, ultra-high-net-worth - he said something that stuck with me. 

I asked him if he was on LinkedIn.

He laughed. “Why would I be on LinkedIn? I don’t need to network. I’m on Facebook. That’s where the photos of my grandkids are.”

Ah ...(I’m an idiot).

Fishing Where the Fish Are

That conversation changed how I thought about digital strategy. Facebook (META) became an experimental channel. Not because it was a perfect targeting option, but because that’s where the audience was. Not networking. Not searching for investments. Just existing. Scrolling through photos, reading headlines, watching videos.

I stopped trying to find accredited investors through traditional online tools. 

Instead, I worked backwards. 

I started looking for high-net-worth individuals offline. 

I used public and private databases, events, and old-fashioned referrals. 

I matched this offline data to digital breadcrumbs. Email hashes, cookie IDs, and unique user identities (UUIDs).

When I found a match between online and offline HNW data - I could target high-net-worth investors online and start the marketing process.

And here's the secret to soliciting CRE investments from HNWs: It wasn’t about pitching deals. Not at first.

Never Be the Pitch Guy

The cardinal sin in Investing is acting like a salesperson. 

Send a cold email? You're spam. Projected IRRs before saying hello? You’re done. Do anything like the dozens of hustlers crowding the inbox of every HNW with a brokerage account? You’ve missed the point.

What you want, and need - is to be different. Better. Human. Relatable.

The most important impression you’ll ever make is that first one. If that impression is: “I’m like every other person trying to get your money” you’ve missed your best chance.

So don't be the pitch guy. Be someone they value.  Be an educator. The one who reveals insights about the economy, the asset class, deal terms, etc.- before ever hinting at a deal.

Find Their Trail, Then Offer Value

It’s ironic, but the less you “sell,” the more you win.

When I was helping build Crowd Street, what worked best wasn’t ads. It was content. 

Education. Knowledge. How commercial real estate works. How to calculate IRR (and how it can be gamed).

How to underwrite a multifamily deal like an institutional investor.

We served this content to people online who matched offline HNW data. People who actually were high-net-worth individuals.

They clicked. They read. They learned. And then, over time, they trusted.

This is the key behind my success with Crowd Street, Cadre, and every Capstacked client.

Use the right data. Find HNW/UHNW wherever they are online. Be useful. Prioritize educational content. Relationships over capital. Build for the long-term.

So that’s Chapter One. Not a sales manual. Not a blueprint. A mindset shift. A reorientation around who your customer is, and just as importantly, who they are not. They're not browsing LinkedIn looking for a CRE syndication. They’re not searching Google for “best real estate investment.”

They’re not looking. Which means if you want to succeed, you have to play differently. You have to see through the data noise. Be useful. Provide value. Don’t hard-sell.

They can become your investors, but only if you act like someone worth investing with.