Raising capital is a cornerstone of real estate and alternative investment strategies, yet it demands a delicate balance between transparency, trust-building, and professionalism.
Success in this area depends on establishing a solid foundation of trust, maintaining transparency with investors, and managing risks effectively. For fund managers and capital raisers, balancing these elements can set the stage for long-term investor relationships and sustainable growth.
We spoke with Nishant Sondhi, an experienced capital allocator and Customizable Fund ™ manager of Sondhi Capital Group LLC at Avestor, to gain his insights on fostering investor trust, addressing risk perceptions, and maintaining strong post-investment relationships.
Here, we explore the key strategies behind Nishant’s success in raising capital and his advice for those looking to enhance their approach.
[Nishant started as a New York City real estate broker, before he transitioned to fund management in 2023, using a fund-of-funds model to secure favorable investment structures. Since joining Avestor, Nishant has leveraged their customizable fund platform to enhance flexibility and streamline investor options, with plans to expand into diverse asset classes.]
Building Trust Through Transparency and Authenticity
One of the foundational pillars of successful capital raising, according to Nishant, is transparency.
"If you don’t have a personal track record," he notes, "it’s essential to be open about your model—who you’re partnering with, how you accessed the deal, your level of compensation, what the investor is getting, and the associated expenses."
This honesty helps potential investors understand how the structure works, how it benefits them, and what efforts have been made to ensure the quality of the deal.
Nishant emphasizes that being genuine is just as critical.
"You and the investor are on the same team," he says. For a fund manager, that partnership mindset builds a stronger relationship than simply pitching a standalone deal. Nishant also advises against pretending to know everything, stating that it’s always better to admit uncertainty rather than risk eroding trust with a misleading answer.
Transparency, both in sharing the upsides and in openly addressing limitations, fosters trust and helps investors feel secure in their decisions.
Balancing Promotion with Honest Risk Disclosure
In the world of private equity and real estate investment, risks are unavoidable. Nishant stresses the importance of honest conversations about these risks.
"Investors need to know that these are private equity and private risk deals," he explains. The specifics of the deal, such as whether it's an existing asset with cash flow versus a new development, can influence risk perception. Properties that are already operational give investors a sense of security, as they indicate a tested fit within the market.
Explaining the capital stack is also essential, so investors understand where they stand in terms of payout priority.
For instance, Nishant shares that the banks are paid first, followed by limited partners, and then general partners. This clarity helps investors see the full financial picture. Nishant also discusses potential risk factors such as construction challenges, property management issues, and inflation. He advocates for using mitigation strategies, like working with vertically integrated partners or larger firms with economies of scale, to help offset these risks.
Furthermore, Nishant advises fund managers to encourage a long-term perspective.
"These investments generally hold for three to five years," he notes, requiring investor patience to yield meaningful returns. By setting expectations early and providing regular updates, capital raisers can help investors see the bigger picture and feel more comfortable with the inherent risks.
Maintaining Strong Relationships Through Consistent Communication
Once an investment is made, maintaining a strong investor relationship becomes crucial. Nishant firmly believes in the power of consistent and proactive communication.
"There’s no such thing as over-communication," he says, emphasizing that regular updates, even if brief, help investors feel informed and valued. "Many times, I send reports to investors, and they may not read them, but it’s about the consistency. It shows that the deal is progressing and that they haven’t been forgotten."
Delivering on promises—whether it’s monthly cash flow updates or quarterly reports—is essential to building trust. This consistency in delivering value reassures investors of the reliability of the fund manager and the stability of the investment.
Beyond formal updates, Nishant believes in the importance of adding a personal touch. He makes it a point to connect with investors at least twice a year during holidays or special occasions.
"It doesn’t need to be overdone," he says, "but a small personal gesture goes a long way." Tools like CRM systems can help automate reminders for birthdays or anniversaries, allowing fund managers to create a meaningful connection without overextending.
For fund managers and capital raisers, building investor trust is not merely about presenting a polished pitch. Nishant Sondhi’s insights illustrate that transparency, proactive risk disclosure, and consistent communication are the true cornerstones of successful investor relationships.
By focusing on these areas, capital raisers can foster long-term partnerships based on trust, security, and shared goals, ultimately creating a strong foundation for growth and success.
Want To Know How You Can Start?
Whether you’re new to capital raising or you’re an experienced capital allocator who wants to scale, we’re here to help you grow.
To know about how Avestor can help you, book a strategy call with us at: https://www.avestorinc.com/demo
