Fund Launch Live Event: What's a Fund?

Hello, everyone! Today, I’m excited to share a snippet from my speech at Fund Launch Live last year, where I tackled a fundamental question: What’s a fund?

During my speech, I aimed to inspire at least one person in that crowd of hundreds to start and manage a $10M fund within the next 12 months. Let’s dive into the key takeaways.

What is a Fund?

A fund is essentially a pool of investors’ money. As a fund manager, you are responsible for drawing, allocating, and investing that pool of money. When the assets you’ve invested in generate returns, those profits flow back to the investors, with a portion left for you as the fund manager.

The Syndication Loop vs. Fund Structure

Many investors start by doing syndications. For instance, let’s say someone wants to flip houses:

1. Find a House: Identify a property to flip.
2. Secure Funding: Get hard money, investor money, or bank financing.
3. Create an LLC: Set up an LLC and draft an operating agreement.
4. Flip the House: Use the funds to renovate, sell the house, and generate profit.
5. Repeat: Move on to the next property and start the process over.

This process, which I call a syndication loop, is effective, and I have nothing against it. However, if you’re doing multiple deals, there’s a more efficient way: start a fund.

Why Start a Fund?

With a fund structure, you only need to raise capital and organize fund documents once. After that, you can do multiple deals without the repetitive busywork. This approach also simplifies things for investors, making more deals available to you.

This concept isn’t limited to house-flipping. It applies across various sectors, including private equity, venture capital, and even niche businesses like buying small gun shops. For example, a friend of mine raised capital, bought out his competition, and scaled his gun shops, resulting in a great ROI for his investors and business.

If you’ve struggled to scale your business or start your fund, the issue might be that you don’t have the right vehicle or you don’t know how to use it.

The Fund Launch Formula

Here’s the Fund Launch Formula I shared:

1. Find an Amazing Deal: Identify inefficiencies in the market that money and strategy can solve. Know your strategy and find that one-of-a-kind deal.
2. Frame the Deal: Gather all the details and make it presentable to investors.
3. Pitch Investors: If you receive negative feedback, go back to step 1 or 2.
4. Organize Legal Docs: Once you have serious commitments, get the paperwork done.

When people are young, they often have great ideas but lack capital. As they get older, they accumulate money and look to invest in younger people with innovative ideas. Your fund can fill that need, regardless of the niche.

Conclusion

So, according to my talk at Fund Launch Live, what’s a fund? It’s a pool of capital that’s allocated and invested by a manager. The returns from the project are then distributed to the investors and the fund manager.

That’s a brief recap of my speech at Fund Launch Live, but you can click here to watch the full video! If you need help starting or scaling your own investment fund, visit Fund Launch! And for more free content, check out the Fund Launch Blog.

Thanks for stopping by,‍

Bridger Pennington

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Want to get direct guidance for your fund? Schedule a time with my Fund Advisors!

_{DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.}