Tips for starting a succcessful fund

The first half of your fundraising cycle is always education. Your first you know, we'll do it on percentage basis because it's relative. But the first 50% of your meetings are all about teaching people who you are, what you do, where you came from, what you're about, and what you hope to do against a market that either is or is not favorably disposed to help you, right.

And so, if you're raising a fund, and it ultimately takes you two years to do that. Most managers will tell you we didn't raise any money the first year. It was an entire negative outflow. Right? We spent money. We spent time, we spent effort. We spent intellectual capital, and we educated a lot of people.

You're asking people for a 10-year lockup on a blind pool basis, right? There is very little in the world that we ask you to trust more than 10-year blind pool. So who sent you is very important.

We need to be able to effectively utilize our networks in the way that other groups in America have utilized their networks. Right? Whether it's your service providers, whether it's your trade association, whether it's your elected officials. Whether it's your, you know, people that you've worked within your company there have got to be people of substance and credibility that introduce you so that you carry the level of importance and significance that allows me to get to what I told you. The standard was high conviction. You can't get to high conviction in a reasonable time period, if you're being introduced by your elementary school teacher, you know what I mean. No knock on a school teacher. They set us all up for success. But they can't give you a ticket to this game, right? It's got to be somebody connected to it that gets you there.

You've got to be able to demonstrate what your toolkit is. Remember, this is not passive investing right? You aren't simply investing money and letting it ride. People are increasingly investing in deep expertise, right? The generalist funds, the funds that will invest in anything as long as it's a good deal and meet certain underwriting standards. There are still funds that do that. But what most institutional investors are demanding for the high fees that alternatives come with. They're demanding specialization. They're demanding unique capabilities, differentiated capabilities.