This is The Hardest Part of Starting a Fund…

What’s up, everyone? Today, I want to tell you the hardest part of starting a fund!

After starting 3 funds myself and helping people start funds every day through Fund Launch, I have noticed a reoccurring pattern in the process.

Is getting over the SEC, the investors, or the reporting the hardest part? None of the above!

I’ve been a part of 4 different funds that all flopped… and it was all because of this one thing!

Let me paint a picture for you real quick…

The Zoom Call

You and your buddies get on a zoom call because someone has this great idea. Everyone is hyped, assignments are made, and the next week you hop on the 2nd call to follow up.

No one has done anything!

No progress has been made since the last call!

Everyone makes excuses, recommits, but the same thing happens on the 3rd call.

Over the course of a month or year, everything has fallen through.

Now that we’ve got that covered, here’s the hardest part…

It is…

Determining who the partners are, how the split will work, and who will do what.

It sounds dumb, but it’s a real thing.

Too many businesses blow up because these things aren’t predetermined.

The partners get mad at each other and quit because duties aren’t outlined, and fantasized expectations aren’t met.

Like I said in my video

“If you can nail this right at the beginning, you have high chances of launching your fund.”

Everything else that you need help with to set up your fund – we can help with that. You need to get the first part right though.

3 Circles of a Fund

  • Expert Investor
  • Fund Manager
  • Money Raiser

Every fund, big or small, has these 3 people.

“But Bridger, what should the equity split look like?”

Short answer: It’s all negotiable.

Typically, however, a third of the equity goes to each “circle.”

If you stay with the same group and launch a 2nd fund, everyone will know who’s doing what type of work, so it’ll be easier to split the equity. But on your 1st small fund, just do an even split.


I also said in my video…

“Of all the companies I’ve started, the ones that have worked were built off of momentum.”

The sooner you and your team makes that first dollar, the more momentum you will have.

But how do I get momentum?

Running a fund presents its own challenges, but as far as starting a fund, the hardest part is to determine who the partners are, how the equity split works, and who will do what.

That’s it for today!


Bridger Pennington

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.

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