How to Raise Your First $50m
Has anyone here ever tried raising capital for one-off deals or a small fund? Would be interested in hearing anyone's experience in starting out as a GP and bringing deals to potential investors be it F&F or institutional LP's.
Would going to a debt/equity search shop like CBRE/JLL be a good first start if I have a good deal and know finance/pitching/real estate operations and have the impressive background to put any investor worries to bed?
Based on the highest ranked content on WSO, it seems that for most Hedge Fund (HF) managers, it's recommended to first gain experience at a well-known firm, build a solid track record, and secure a patron or two before venturing out on your own. Launching with less than $30-50 million is not advised because it's difficult to support a decent fund infrastructure with less than that. Without a solid infrastructure, few Limited Partners (LPs) will want to invest in your fund due to risk and compliance factors.
In terms of LP requirements, they typically look for consistent returns and a consistent team. They prefer a steady 20% return rather than experiencing volatility. The team must have worked together for a long time, doing the same thing.
Remember, starting your own company and running it well is another way to achieve financial independence. Grow it as much as possible, favor borrowing money versus giving up equity, and when you're ready to sell, you'll be financially independent.
However, these are just some general insights. The specifics may vary depending on your unique situation and the nature of the deals you're looking to fund.
Sources: Millionaire by 30, I've raised money for PE and HFs. Q&A, $1,000,000,000 Before 40
Toughest fund raising environment since 2008 so be prepared for a lot of rejection
A lot easier to raise on co-invest one off deals. Maybe look into emerging manager programs for a discretionary fund
I've bought a couple buildings with F&F money - I think it is a decision you have to think long and hard about, because no matter what you or your "investors" say, it is simply impossible to take personal feelings out of a business relationship if the genesis of the investment is "invest with me, you know me!".
If you have a good deal, a truly good deal and not one that depends on nine out of ten things going right to be a good deal, and you also have some background, then you should be able to find this money yourself.
Look, I don't know you or your deal. But a little common sense sprinkled in here is revealing. You are a tiny, tiny fish in a very large pond, presumably. You have a deal. Either that means it is small, or really fucking hairy, in which case you probably don't have a huge equity need, so you should reach out to the people you've met in your long and storied career for some investment, or it's big enough that it would truly justify reaching out to an equity broker. But in that case... why do you have site control? Contrary to the expectations of most people dreaming about making it big, brokers don't give sweetheart deals and anyone sitting on a project that might need $50mm of equity is going to be savvy enough not to sign a PSA with the first person who cold calls them. If this is a deal which requires an 8 figure equity commitment, it's a deal big enough that a LOT of other people have passed on it before it got to you... which means it probably isn't a very good deal at all.
TL;DR - no, don't hire a JLL/CBRE, you don't need them; either you don't need enough equity, or your deal is dogshit to begin with and you shouldn't waste your time
Thanks for the input.
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