Regtech start-up Gecko Governance has bootstrapped its way from Dundalk to the Big Apple. In the first in a new series of articles, Andris Macs tells us what he has learned about effectively targeting, and building a reputation in, the New York market.
Fresh from our win at the recent InterTradeIreland Seedcorn investor readiness competition, we initially hoped to open an office in London. The Brexit vote made us revisit our strategy and we decided to fast-track our US expansion and open an office in NYC.
In the US, there are over 2,000 fund managers (mainly in New York and Connecticut), managing more than 80,000 mutual and hedge funds. US asset managers held more than $51.1trn of long-term conventional assets under management in 2016, or 47.2pc of the global total for these funds. Most of these fund managers and hedge fund managers are based on the east coast.
Our aim is to target as many of these as we possibly can, with more than 800 fund managers within a five-minute walk from our office on Park Avenue.
What we learned
From our most recent visits to New York, we have gained much insight as to how to target these fund managers.
The sales process of any enterprise technology in the US can vary, but thought leadership articles, sponsoring events and building a network over time to establish credibility is the only way to do business in NYC.
A well-designed, visually appealing website with well-constructed digital content should include regular blog posts, white papers, videos etc. When reaching out to potential clients, your website becomes their first port of call. Your website establishes your brand and credibility.
When targeting the New York market, you are expected to treat meeting cancellations and rescheduled appointments as normal business practice. On our last visit, we reached out to 40 companies and scheduled 25 meetings, which were arranged for the first week, and only a few meetings the second week to allow time for the rescheduling and follow-ons. New York City is a busy town; people will meet you, even if it’s rearranged.
NYC is a fast ‘no means no’ culture. You will be told there and then that your solution won’t be required. This is in comparison to the Irish culture of a ‘slow no’, where it could take several meetings or emails to be told, ‘No’. That said, in NYC, if they won’t work with you, they will try and give you leads and introductions.
In New York, everyone knows someone.
Be expected to revisit your strategy whilst on the ground, as we found we were too big for some fund managers. In our experience of the Irish fund market size and their compliance needs, you need to target the US differently, therefore, the keywords are scalability and focus.
Your strategic decisions for New York should be:
- You need to research fund sizes, new verticals, pricing model etc whilst gaining traction
- Be prepared to have several strategies to suit each potential client
What may be considered huge in Europe may be considered small in the American Alternative Investment market. Gecko Governance has targeted hedge fund managers with anything between $5-15bn assets under management and we soon discovered that this may be quite small.
New York has a fast-paced start-up fund manager environment. Most of these start-ups have spun from ex-employees of other fund management companies and are looking to network with the right people. The opportunities to engage with this market provides great potential for Irish start-ups.
In the case of Gecko Governance, the pre-launch and the smaller- to medium-sized funds are continuously seeking a compliance foundation, and require the right tools to manage their governance needs as they grow and expand. Compliance requirements must be managed and executed effectively from conception to completion.
By Andris Macs
Andris Macs is a senior business development analyst at Gecko Governance, a new multi-award-winning regtech blockchain solution to easily allow fund managers to monitor and manage their regulation and compliance requirements.
Over the next series of articles, Gecko Governance will share their war stories on the practical side of opening an office in New York. Next up, they will be navigating the employment infrastructure when hiring and expanding in the US.