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It is vastly easier to start your own shop as a developer.
Raising a fund is a nightmare, and there are aspects to it that are hard to quantify beforehand. Lets say you manage to raise $100mm (which almost no one will be able to do). You're still paying for compliance, for lots of staff to hunt down deals, for all this nonsense - and you have pressure to put out capital. And why is anyone coming to you as opposed to a bigger fund? For that matter, how do you compete with bigger players, who almost certainly have cheaper money? Maybe you do small deals... but again, at that point you may as well not have a fund and just do value-add acquisitions.
And for what it's worth, you do not need an expertise in all those fields to be a good developer. You need to be organized and have a working knowledge of what every party is supposed to be doing, but all that is required is to be silver at everything, gold at none.
Well written and accurate - 100% agreed.
Also I like the “silver in everything” description, good analogy for what it takes to be a successful developer.
Well put. There’s also more viable ways to get started in development than there is to raise a fund. Fund terms are competitive and don’t suit new entrants unless the principals have a demonstrable track record from prior funds, I.e. cash to cash investments. For development, there’s several ways of getting a site under control and derisking a project before you need to bring in a capital partner making the capital raising process a more straightforward.
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