Before You Launch a Fund in 2026, Watch This

If you're planning to launch a fund in 2026, I want you to think carefully about the order in which you're doing things. Because most first-time funds don't fail because they're unintelligent or unmotivated. They fail because they launch in the wrong sequence. They start with a raise, they focus on legal and the deck, and they talk to investors before they've built the foundation. And then they wonder why capital raising feels hard. At Fund Launch, we teach what we call the Fund Launch Formula. Formula. This is what we've used to help over 400 of our members launch their funds. This is what I've used to launch my 3 investment funds and 2 funds that I actively run right now that have raised over $50 million of equity and have over $300 million of aggregate portfolio AUM. And in this video, I'll be breaking this down into 3 key steps. And if you get this order wrong, the market will punish you for it, especially in 2026, where LPs are more disciplined, more skeptical, and more selective than they've ever been. So let's dive in. The first step is strategy, and this is where most people are far too loose. You need to ask yourself, why are you even launching a fund? What is your unique right to win in this space? When I'm down on the iPad here, this is deal and strategy. If the reason is because you have a great strategy and money is the only thing stopping you, that is the right answer. Any other answer in 2026 just won't cut it. You cannot afford to launch a vague fund. Saying, we're just another firm that invests in multifamily real estate or invests in X type of opportunities might have worked in easier capital environments, but today it comes across as a me-too product. Why would I invest with you instead of the other 50 operators in the same market? A real fund strategy should feel precise enough that when someone hears it, they immediately understand the box you operate inside. And then when you follow up with your team and experience, you show your unique right to win. So when I'm talking about deal and strategy, I'm asking the question, what exactly are we buying or investing into? At what size and what geography? What's the risk profile? How do we mitigate those risks and find asymmetrical risk, which is a fancy way of saying relatively low risk for high return? And then finally, why are we uniquely positioned to capitalize on this gap or opportunity in the market? If you can't articulate this clearly and confidently, then you probably don't have a strategy. You have a theme or an idea. And LPs allocate to defined strategies, not themes. Now, if I go back to the iPad here under deal and strategy, I'm gonna look at, like I said earlier, what's my risk control return profile? How am I finding asymmetrical risk? What is my unique edge? What gives me an edge in the marketplace versus other operators that already are doing, that have 20 years experience, they've done 3 funds prior and they charge similar fees to me? Why do I have a unique right to win? And then finally, Who is the team that I've assembled to do this? You can see the three categories of your team members here, and again, we have more videos that talk about these in general. But again, deal and strategy is crucial when building out your fund. Now, once your strategy is defined, the next step you move on to is frame and structure. Now, most people at this point want to jump to legal. They want to call a lawyer up and start doing docs. I'm going to tell you, don't do that yet. We need to go and frame out your entire fund. Structure is the operating system behind your fund. If you raise capital tomorrow, this would be the guts of your fund, how it's gonna be structured, how's the split between the fund managers and the investors. Inside of frame and structure, you're gonna need to decide if you're gonna have an LLC or a GPLP structure, if you're doing a syndication, a single asset fund, or a full blind pool fund. You need to show investors that you have a defined decision-making process, usually with an investment committee. And that you understand how capital calls will be modeled, how reserves will be managed, and how deployment pacing will be forecasted. You'll need to think through your reporting system that investors can rely on— quarterly updates, consistent financial reporting, transparent communication, and professional administration in your fund. Many first-time fund managers underestimate this step. Again, they jump to legal and formation, and what happens is the lawyers here ask them all these questions and they don't know the answers, and the lawyers bill them $800 an hour to train them on the differences of all the things we discussed earlier. This makes your legal costs increase drastically. And actually what causes many funds to fail. They've already spent $100,000 in legal costs. They haven't even talked to investors yet. They then go talk to investors. Investors want more changes. Those changes are going to take them to $200,000. And they say, well, this is just getting too expensive. We got to wrap this thing up. Funds fail for a lot of reasons, but don't let your fund's infrastructure be one of them. So if I'm going to go into a few more details on frame and structure, you can see here, are you going to run a closed-ended or open-ended model? A closed-ended model is usually a 7 to 10 year life with capital calls, deployment, and value-add growth periods with a fund 1, a fund 2, and a fund 3 stacked on top of each other. An open-ended fund is long-term with striking a NAV price and capital enters the fund and can leave the fund at different time periods. You'll also decide your waterfall structure. What are your management fees going to be? Your preferential rate of returns, your catch-up, Your carried interest on your fund. And again, we have other videos that go into great depth on all of these. You're gonna decide between the GP and LP structure or maybe doing a syndication or single asset fund. Again, how do you want this to work and the relationship to be between your limited partners, your investors, and you, the general partner? This is all decided in the frame and structure of your fund. If I can give you a note from someone who actively runs 2 funds right now, has helped hundreds of people launch their funds. In the frame and structure piece, do what is standard or do something that's better than standard. A lot of people in waterfall structures, even myself included, the standard is 2 and 20, 2% management fee, 80/20 split. Some people will say, well, I want to do a 3 and 30, or I want to change how this whole thing is. What I would tell you is do what's standard, what's best practice, or below. This is what's standard. So you can go below, which would be 1% management fees and maybe, you know, 90/10 splits. But again, I would just tell you, do what's standard in frame and structure. Keep it vanilla. You don't want investors not investing with you because you had a weird, wonky structure when you were doing your frame and structure. Now, in the spirit of doing things standard, a big question is going to be down here on your structure. Should you do a GPLP structure, which is standard for most funds? Or should you do like an LLC? A lot of people want to do an SPV, a special purpose vehicle, or a syndication. And to give you a little context how those work, generally speaking, you bring in people into an LLC here. They are business partners with you. You are raising money. Let's say you're raising $500,000. You reserve 20% equity for yourself in this LLC, and you bring in business partners who chop up the pie. Maybe this person has 30%, this person has 20%, this person has 10%, and you chop up the pie. For them. This operates under an operating agreement. Now briefly, we have other videos on this, but briefly, these can work okay if you're working with people who are close friends and maybe less than 5 people because they are business partners with you. They are not investors. They all have voting rights. You all have an LLC and you're voting on, we're going to go buy this real estate property together and we all help manage it. If you try to change the documents, well, Bridger manages it. I'm the managing partner. Me and you manage it here. That starts to look like a security or an investment. investment, and you need to register that with the SEC. I've seen a lot of SPVs go bad because of the structure. What I would tell most people to do is look at the GP-LP structure. What you have here, this is you and your partners. You are the fund managers. These are LLCs right here, and you are the general partner to a limited partnership, the fund. You bring in investors that are called limited partners, LPs. They come and invest in your limited partnership. And they are limited. They're limited in their decision-making. They're limited on their liability. You are the general partner. You have unlimited liability. You also have decision-making power for what happens in the limited partnership. The money comes into here, you go and make investments. When the investments make money, the money flows back to the limited partnership and gets split between the limited partners and the general partners, usually 80/20. Now again, we have other videos that go into more depth on this. But you'll hear this structure very commonly. You'll hear people talk about their LPs. Oh, I have my LPs in my fund, or I'm an LP in another fund. They mean a limited partner. Or you can say, oh, I'm on the GP side of things. That means you're on the management side, the general partner. Again, this is how the largest funds in the world run. This is all governed by an LPA and PPM. You can see right here, we lovingly call them the Bible. We call this the Bible because these are the governing documents of this entire structure. Now, a last thing I'll share. SPVs have historically been done by people because they're cost effective. You can set one of these up maybe for $5,000 or less, and funds, GPLPs, are usually like $30,000. As of recent though, many groups are using a new thing called single asset funds, which uses the GPLP structure but isn't as intense as a full blind pool fund. You could set up a single asset fund for Maybe $5,000 to $7,000. And it's much more legit than a thrown-together SPV, in my opinion. We actually help people do this at Funnel Launch as well. We help people do all 3 of these. But I've seen a lot of people do this structure, the GPLP structure, and have much more success because it's, again, much more legitimate. The reason it's more legitimate in my vernacular is because in an SPV, if someone gets mad and wants to sue the partners, they can because you're all business partners. You can put your elbows out. If someone forgot to pay their taxes last year, you can really make a mess. In a GP-LP structure, these are limited partners. If one of these LPs forgot to pay their taxes last year and they come to you and say, Bridger, hey, can you sell the real estate properties because I got to get some money out? I need to pay my taxes. You go, sorry, I, the general partner, am— I have to do what's best for the fund, the limited partnership. I'm a fiduciary to the limited partnership. I don't serve individual investors. I serve the partnership. And what's best for the partnership right now is to not sell these real estate properties. It's to keep them and season them because, you know, we're mid-construction right now. If we sold them right now, it'd be devastating to the portfolio. LPs like this structure because it protects them from other LPs. GPs like this because it gives them control over a portfolio versus, again, the SPV structure, which everyone's an owner and everyone can make decisions and put their elbows out. Sometimes lawsuits are more prevalent. Again, more videos on this, but I would tell you to look into this when setting this up. All right. Now this brings us to step number 3. If you've gone through and done the deal and strategy, you've also done frame and structure. Most people at this point go, Bridger, I would love to talk to a lawyer. Let's get this thing started. And I go, hold on, wait. One last thing for people launching funds in 2026. Before you go talk to a lawyer, go talk to real-world investors, mentors of yours, and See if you are barking up the right tree. The goal is that you get validation on your fund idea. So you've done deal and strategy. You've put together your frame and structure. You probably are going to put that together into a pitch deck or some kind of organization. You're going to call up people in your space that you look up to, maybe mentors, friends, people that invest into funds. And you're going to say, hey, I'm looking at putting together this offering. I haven't put it together yet. I want to get your advice. on what I am doing? Advice is the key word here. Do you have, you know, 14 minutes sometime next week that I can come and talk to you about my offering on Zoom or in person? I like precise numbers, by the way, because it just keeps it sharp. You go and meet with people that are actually allocators. You ask them their opinion on what you are doing. So one of two things will happen here. Number one, they'll say, this is phenomenal. I love what you're doing. I want to put in $250,000. Now, that's awesome. Usually this is less likely. More common is option number 2, where they say, yeah, this is great. I kind of like it. And you go, really? This is— Yeah, yeah, you're doing okay. And you go, well, do you want to put some money in? And they go, well, I'm a little tied up right now. I can't put money in. You go, well, give me the truth here. Really, what would hold you back from putting money in? I need the honest truth from you. And at that point, they will then tell you all of the things that are wrong with your offer. Which is gold. That's what you want. Both of these options are great. If you notice here on my iPad, this is a circle. It's a circle for a reason. You're going to talk to potential allocators. They're going to give you tips to change. You're going to go tweak your deal and strategy. You're going to go tweak your frame and structure, and then you're going to re-talk to more people and try to get more capital or verbal commitments on your fund. Again, the goal of doing this loop over and over again is to get validation on your fund. And the best validation is people actually telling you, I would like to pull out my checkbook and write you a check into your fund. Now, once you've achieved validation, you've got a significant group of people telling you, yes, I love what you're doing. I would like to be a part of this. I approve of your frame and structure and your deal and strategy. Great. Then and only then we graduate. We cross over validation To legal and formation. And this part for me is one of the easiest parts. You walk into a lawyer's office, you say, hey, I want X, Y, and Z with a drink and a side of fries. They build you your fund because you already know exactly what you want. You're not tweaking it in the future. Your fund is set up. You launch your fund. You then go back to the capital markets. You get signed commitments into your fund. You start buying assets and you start building out your firm. So if I zoom out, you can see the Fund Launch Formula here. This is what you are doing as a fund manager indefinitely. This is how you're going out and raising large amounts of money, building and structuring your huge, massive fund that you're going to build here in 2026. So if I zoom out a little bit, this is the entire Fund Launch Formula. On the left, you're doing the things we just mentioned. The middle, you're getting validation, you're setting up and launching your fund. You're then launched. And on the right side, you are closing capital, buying assets, and building out your firm. This is how amazing fund managers launch in 2026. This formula is how we have helped hundreds of people launch their funds in Fund Launch, how I've launched my 2 funds, how we're launching hopefully another fund this year. We are again over and over and over again following the Fund Launch formula. Now, if you like this video, please hit the like and subscribe button. This will push this out to more people and share this with a buddy of yours that you're looking to launch a fund with here in 2026. Also, comment down below other videos we should be looking at putting together that would help you on your journey of going and launching a fund. And if you need help implementing, come talk to us at fundlaunch.com.