Three Great Ways to Guarantee Failure in Capital Raising | Summary and Q&A

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September 1, 2016
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Private Investor Club - 4,000 Investors
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Three Great Ways to Guarantee Failure in Capital Raising

TL;DR

Richard Wilson discusses the importance of setting up an investment fund and capital raising process correctly to avoid failure.

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Key Insights

  • โ“ Starting with a proper foundation and realistic expectations is crucial for investment fund success.
  • ๐Ÿ›ฉ๏ธ A smaller fund size and over-subscription can enhance credibility and confidence.
  • ๐Ÿคฑ Transparency and investor-friendly fee structures are favored by investors.
  • ๐Ÿคจ Being unique and aligning with trends improves the chances of raising capital.
  • ๐Ÿ‰ Respecting long-term goals over short-term profits builds investor trust.
  • ๐Ÿคจ Avoiding friction in the sales process is essential for successfully raising capital.
  • ๐Ÿคจ Building a strong track record through consistent raises increases the chances of success.

Transcript

hello this is Richard Wilson CEO of the family office club and I just wanted to come to you today from uh Mumbai India here while I'm speaking at a couple family office conferences and talk to you about setting up your investment fund and capital raising process for Success we had a lot of people at our Capital con event just a few weeks ago in Tim... Read More

Questions & Answers

Q: Why do many investment fund managers fail in their capital raising efforts?

Many fund managers overlook the importance of properly setting up their fund and fail to consider factors such as minimum investment size and fees, which can deter potential investors.

Q: What is the significance of having a smaller fund size for first-time fund managers?

Starting with a smaller fund size allows managers to be over-subscribed, increasing their credibility and chances of success. It's better to exceed expectations than to fall short of a larger initial goal.

Q: What is the recommended fee structure for investment funds?

Transparency and investor-friendly fee structures are key. A zero management fee with a performance fee or a purely performance-based fee structure is often appreciated by investors.

Q: How can fund managers ensure a smooth capital raising process?

It is crucial to be different and stand out from the competition by aligning the investment with current trends and offering a frictionless sales process. Respecting investors and demonstrating a long-term mindset are also important.

Summary & Key Takeaways

  • Many investment fund managers set themselves up for failure by expecting immediate success without properly laying the groundwork.

  • Having a high minimum investment size and expensive fees can make it difficult to attract investors, especially without a strong track record.

  • It is better to start with a smaller fund size and be over-subscribed, as it increases credibility and ensures the fund gets off the ground successfully.

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