Fund Launch Live 2023 - Bridger Pennington on How Funds WORK
Bridger Pennington breaks down how to launch and scale investment funds using a four-step formula: find a deal, set terms, pitch investors before spending on legal work, then finalize documents. Baby boomers hold $84 trillion in wealth. Successful funds need three roles: expert investor, fund manager, and money raiser.
Chapters
Fun Launch Live! Get on your feet, put your hands together, and help me welcome to the stage Bridger Pennington! Woo! How we doing, everybody? Come on, come on.
Wow, how we doing?
How's everybody doing today?
Woo!
All right. Good to see all y'all. Good to see you guys. Ah, welcome in, welcome in. Take your seats. Wow, we made it, huh?
Woo!
Woo!
We are here. Everybody throw—
anybody's ever thrown like a party at your house before or something and you worry if people are gonna show up?
You guys came.
So anyways, we're here. It's awesome. Welcome to Fun Launch Live. Ah, it's amazing. I just sorry I last backstage. I was tearing up watching that video. It's just amazing. And that video and all the accomplishments this group and it's a reflection on us as a group and what we can do and what we can go after and what you guys can do. And, um, I was just blown— I'm blown away. I'm blown away by this, but what we together have built. And I feel like this event feels a little bit like a family reunion sometimes. There's people on Zoom I talk to, a lot of you guys I talk to on Zoom, we meet up, whatever. But it's fun to come back in person from last year to this year and see, oh, what's the update? What are you doing? Oh, we raised money. We're doing this fun. It's pretty awesome. It's just remarkable to see what this group has done. So, and we're just getting started, hey? We're only just getting started on this. So give a huge round of applause, you guys, for all the stuff this group has done. This is amazing. Ah, this is phenomenal. Now, yes, I have a beard. I saw a quote from Alex Hormozi online. I thought it was pretty good for me.
It was this quote right here.
It says, if you're an ugly dude, consider a beard. Leaves half your face to their imagination.
That's good.
So here we are with half my face to your imagination. Um, which is pretty fun. So we're gonna have a great time, uh, the next 3 days. I promise to go all out. I promise to— I'm gonna give you our full everything we've got.
Does that sound good?
Yeah. We're gonna play all out. Um, now Devon talked about this a little bit. I'm gonna do the same with Devon. We're gonna try to keep the energy high in this room. I'm gonna do callbacks. I'm gonna be asking if you're there, etc. And I'm not doing it for me, just so everyone's aware. So I'll be like, if you're with me, say yes.
Yes!
Okay, that was awesome, that was really good. The reason I do that, just so you're aware, there's some people in this room like, ah, I'll never do that. Psychologists tell us if we show up to an event like this and we just sit there and listen, you remember long-term about 0% of what you listen. If you actually take notes, we actually, when you checked in, we gave you notebooks, all that kind of stuff, you take notes, that jumps from 0 to about 3 to 5%. So, 3 to 5%, that's pretty good of long-term memory, what you retain. If you use your body and voice and energy, that number jumps to about 15 to 20%, what you retain long-term. Who's down to get to 15 to 20%?
Yeah?
Okay, if you're with me, say yes!
Yes!
Okay, so I'm gonna do callbacks like that, we're gonna do stuff, and it's not just, I mean, it is fun to do, but it's more to help you be engaged. I want, your time is very valuable, it's the most valuable asset we have is time. So, I want you to be here present and using the best of your ability for all this. Sound good? Yeah.
Okay.
It's going to be a fun 3 days. So, I want to talk about a few things. We're going to dive right in. Is that okay? We're just going to dive right in. We got a bunch of fun stuff planned. I've got a fun session here. I want to go deep on funds. I want to share a set of good groundwork. A lot of you guys maybe have heard some of this stuff, but I'm adding a ton of new examples and new things in here to help go from there. Sound good? Now, I think I love this. I think we romanticize the small business owner a little too much. Who owns a small business?
Yeah? Yeah.
A lot of people in this room. Now, I'm all for small business. You hear about in the politics news, we're trying to protect small business owners, etc. I think we romanticize it a little too much. Meaning, like, being a small business owner in itself is awesome, but it's a step to another further thing, if that makes sense. Stephen Schwarzman, co-founder of Blackstone, said this. So, $400 billion. Anybody know Blackstone in here? I mean, huge group, right? We're going to talk about a few examples from Blackstone. In his book, he talks about this. He goes, "It's hard to run. It's just as hard to run a small business as it is to run a big business. It takes about the same amount of work. Takes everything you got." Can I get an amen on that for my small business owners? Right? Amen. It takes everything you got. So he goes, "If you're gonna be into business, it's gonna take everything you got. You might as well go after a business that can be big and make a lot of money and has lots of margin." There's a fantastic book called E Myth that talks about this. A lot of us small business owners. You know, we wake up, we're in a bakery, we're making the bread. We have to wake up, we do the accounting, we do the marketing at late night. We stay up, we make sure the numbers, the QuickBooks is done. We do everything, right? And we become slaves to our business. So again, I think we romanticize the small business owner too much. Is that kind of making sense? The idea is not to be a small business owner anymore. It's to be a big business owner, right? And have huge margins, a lot bigger things. So, um, really interesting book. Anybody heard of this book?
No.
10x is easier than 2x. So I saw this book and I thought, that's kind of a cheesy title, the 10x, you know, thing. Like, oh, you're 10x, just set your goal 10x. And it's like, okay. But I loved his concept in here. So Dan Sullivan goes through, he goes, 10x is easier than 2x, was his whole concept. Now in this room, if I asked you, show me some, write down ways that you could 2x your business over the next 5 years. Think through, actually, literally think right now. Think of some ways you could 2x your business over the next 5 years. Probably a lot of ways. You could run ads, you could do marketing, you could do an affiliate program, you could do all this cool stuff. There probably is about 100 things you could come up with, right, to 2x or incrementally increase your business. But he goes, if I told you what are ways that you could literally 10x your business in the next, let's call it 3 years, how many ideas could you come up with? And most people go from 100 ideas Down to two or three. Does that kind of make sense? And actually, I read this and I I was like, huh. And it stuck with me late night. I was thinking about it. We had in our bar. I was like, guys, we got to stop thinking of there's it's it's great. Don't put it away. But these are all incremental gains. We could add an employee here, do this little thing. It's going to incrementally grow our business. But what are the one or two things that will ten ten x our literally go from ten million a year to a hundred million a year? That's a big jump. $100 million a year to $1 billion a year. That's a big jump. There's probably only 2 or 3 ways that we could get there. And instead of trying to chase 100 rabbits and catch 100 rabbits at once, you catch 1 or 2 rabbits. Does that kind of make sense? Agree with me, say yes. OK, so, and he has this quote in here, he goes, achieving 10x growth is actually exponentially easier than striving, keep striving for 2x growth. This is a reason a lot of the small business owners stay so small. Small business owners because they don't set the plans and processes to hit that 10x. Is that kind of making sense? That was a pretty interesting concept I've stayed with. Now, most businesses today needed significant capital to grow. All these logos on the screen, you go watch their story. The way to get that 10x growth was they needed a lot of capital to grow franchises, to new products, new development, etc. Does that kind of make sense? Capital is a huge piece of leverage. Robert Kiyosaki coined this very well, but. This has been taught for centuries in business. Here's 4 different types of leverage in business. Different ways that you can use, think about a lever, right? You can leverage your business in different ways. Number 1, so this is in Rich Dad Poor Dad, but it's across the universe of business. Number 1 is capital. Capital is a huge leverage point of business. Number 2 is people, so human capital. Major, major lever point. Number 3 is technology, and number 4 is media. So again, think about leverage. Those are the four main leverage points of any of us can use in business. Is that kind of making sense? So you can leverage the media. Think about like Ryan Reynolds with have you seen all these these actors that are using alcohol? Just drastically, they're like all of them now have an alcohol or a brand that they're taking and then they exit for a billion dollars. You guys seen this? The reason the alcohol company does that is they go find an actor. Let's use media as a leverage point. We'll make this a billion-dollar brand. We'll give that person 20% equity. They take $200 million. We take $800 million. That's— they use leverage. They leverage media, technology, people, capital, etc. Does that kind of make sense? If you're with me, say yes.
Yes.
So, now— oh, let me go back a little bit. The top one here, capital, I would argue is the most important for the rest of the 3. If you have capital, you can leverage all the other 3. If you don't have capital, you can still leverage them. It just is a lot harder. Does that make sense? If you have like a fund with tons of capital, ta-da! You can leverage media a lot easier. You can go pay Ryan Reynolds a huge check, right? You can leverage technology. You can buy big tech stack, whatever you're going to use in your company. You can go hire a whole army of people to— if you think back to these companies before, that's what they did. They leverage capital, right? Let's see here, let me go back. To a huge extent to scale their companies. Does that kind of make sense? So, the next 3 days, we're going to talk about leveraging this piece the most of capital. So, welcome to Funnel Launch Live. This may be the most important conference you ever attend for all your business, etc., in the future. Sound good? So, give you guys a huge round of applause. Welcome to Funnel Launch Live. Now, I hope this event is what we like to call an event horizon. An event horizon, in my terminology, is a moment in time, think about like a peak, you remember everything before that moment and everything after that moment. I'm guessing, think in your life, there's probably a few things in your life that are event horizons. Maybe you met a person and you remember everything before you met that person and everything after you met that person, but you were a changed person after you met that person. Does that kind of make sense? Or there was a moment or a thing that just changed who you are. I actually wanna share one that happened with me and Mason a few years ago. This, we actually attended an event similar to this one. It was an online marketing one. And here's a picture we got in 2019 with Russell Brunson. Anybody know Russell Brunson?
Go Russell!
Go Russell, we love Russell, he's awesome. We'll talk about him later today actually, but this is an event in 2019. We framed out everything at the event. So we attended just like you. We sat down, I was taking notes all day. At night, we go to our hotel room and we were mapping it out. We were going like, everything we have today at Funnel Launch, we mapped out in one way, shape, or form at that 2019 event. It was an event horizon for us. I mean, it changed. I literally was a— I came to that event and I was a changed person after. I knew after I left those 3 days I was there, I said, I am going to do business differently. I'm going to think differently. I'm going to play bigger. I'm going to have a full different mindset. And I'm hoping something like that can happen here. Last, uh, backstage, me and Mason were talking about this and this whole story, and I was thinking about this group that was coming today, and we had a sold-out crowd, and, and we— it was just amazing. And I thought, I'm basing— I was kind of asking the question, like, who should I base my talk to? Who should I speak to? Should I speak to people that already run existing funds, people that don't run funds yet, people that don't even know what funds are, people the first time here, people that were here last year? Like, who's my direct person I talked to, and we finally came to, I said, I'm going to talk to my 2019 self. I'm going to talk to my younger self. And I'm hoping there's one or two people in this crowd that's like a younger me, whether that's actually by age or by in business or this category or whatever, but can come and say, I'm going to have an event horizon. Everything's going to be different after this event. Does that kind of make sense?
Yeah?
If you're with me, give me an oorah!
Oorah!
Alright, so actually following that up, We actually joined Russell's group. It's $150,000 we paid him just because we felt so indebted to him. I was like, Russell, we just thank you so much for this and what you did. We paid $150 grand to join his group. And by the way, I know there's some people in this group like, I would never pay $150 grand for something, right? The way I think about it, it's like, well, if I pay $150 grand and I get back $300,000 or $400,000 or $500,000, I'll pay $150 grand every day of the week. Yeah? Raise your hands. Who else would do that? I would. If I said pay a million, but you'll get back three million, who's going to take that deal? I'll take it. So the price is obsolete, right? It's more about what am I going to get back, and we want to take Fun Launch to a billion-dollar company, and he's already done that. So we said, hey, why don't we join here, and he can help us do that, right? Follow. I'm just going to copy what people do. I'm not a guy that likes. I like to just copy what works. I'll just keep doing it. So Fun Launch Live is going to be a fun three days. We're having awesome time with you guys. We've got amazing speakers. We have actually hand-selected every single speaker coming to speak for different people that actually— so we have a— in Black Card, we're gonna talk about Black Card, but I meet people all the time that have problems in their business. I have a problem like raising money or this thing with a business partner or something. I don't understand this. We've actually hand-selected all of our speakers to answer different topics, different categories, essentially different concerns that we've heard from this community for the last year. So these aren't just random speakers, just so you know. I personally hand-selected, called them beforehand, walked them through We had a very in-depth process. And so I'm so excited for you guys to hear from him today. Sound good?
Yeah.
Yeah? Okay, now the next segment here, speaking of Mason I got on the screen, I actually wanna bring Mason to the stage in just a second, okay? So I'm not as good as Devon, but I wanna bring him to the stage and have a cool entrance. We're gonna do what we call the State of Fund Launch. So we did this last year, I thought it was kinda cool. You know, they do the State of the Union Address and it's whatever, a bunch of politics and stuff. We wanna do kinda the State of Fund Launch. So where we're at, what's the new products we're doing, what's kinda coming out, et cetera. So in just a second, I'm gonna bring Mason to the stage. We're gonna do kind of this state of fun launch. Sound good? So, is you guys ready? AV team, Mason, you ready? Okay, if you guys can help me. Ready? Get on your feet and welcome to the stage, Mr. Mason Frame! Step up in this step up like I'm the one you like. Yeah, I'm the one you like. Get it up for Mason, everybody! Alright, alright. We're here. Now, just so you guys are aware, me and Mason are 50/50 partners on Funnel Launch. I know I'm the face. I'm like on stage and stuff, but Mason has this incredible online market. The reason you guys are all in your seats, the reason you read emails, everything is all from Mason. All the funnels, everything is built by this guy. So again, huge round of applause for Mason. Unreal. So let's do the state of Funnel Launch. Yeah, we've done a lot in the last 12 months. We actually were totaling it up and it was, it's a lot of stuff. We actually took out slides, right? That's too much. We just can't go into everything. So first things up, do you wanna go through the first one?
Yeah. First order of business. Last year at this event, we were known as Invest in Fun Secrets. Really long name, kind of hard to spell, kind of hard to say. So we decided to simplify and make the brand a lot better. So now we are known as Funnel Launch.
Yeah. Catch you.
Ow.
Okay. Pretty cool. There we go. You guys like Fund Launch better?
Yeah. Us too.
Yeah, Investment Fund Secrets was just a little too much. The email, like bridger@investmentfundsecrets.com, it was just—
It's just a doozy.
It was a little much. So we are officially Fund Launch here. Over the last year, our student growth has blown up. I think last year on stage, we were about 16,000 members total. We got the number here. I know the video's a little outdated. 59,792 members of the Funnel Hacks community. Give that a huge round of applause for all of you. I mean, that is crazy. I mean, just on this, I don't know if anybody's ever created like, let's just call it a video or a course before. Like we started this whole camp— we'll tell the story in a minute. We started a course on funds and you kind of hope like maybe 50 people will take it or 100, maybe 200 would be really cool. And then it's like, wow, 1,000. and then 10,000 people, and then 50,000 people like, wow, I want to learn this. It's really cool to see what's been done. So anyways, huge kudos to that student growth. It's been amazing. Additionally, Black—
oh, sorry. Yeah, go ahead. Black Card has grown a ton. We poured a lot into this this year. Since last time we met, we did our Black Card event.
Excellent.
Yep. And we did the race cars at Vegas. It was a really good time. And we added 2 new events since that last time we met. And so since then we did our Salt Lake City event. Who was at that Salt Lake City event? We were there. Cool. In February.
Yeah, all Black Card members.
So everyone flew out to Salt Lake City. It was great. We did a workshop for 2 days and just dove into everyone's funds, super nitty-gritty, a great time. And then last year at Funnel Launch Live, we announced our first exotic event. And so in October, everyone came out to Cancun, Mexico, and we had this really nice all-inclusive resort. It was a great time. And how that worked kind of is all day everyone would come and have fun, go to the beach, eat, drink, zip lines, like you name it. It was a great time. And then at nighttime, We would dive into the sessions, have speakers, do workshops and all that stuff. So it was a really fun time and we're excited to keep adding to Black Card. And actually we have a video for this Cancun event that we can start playing too.
So here's the video. If you get that volume up, that'd be great. Pretty cool. You give a round of applause for that event. It was pretty fun. So we've got 3 events total now for Black Card. We added 2 last year, so we have an exotic event. We're actually announcing the details of the next one tomorrow, so no sleep. Yeah, it's like Christmas morning tomorrow, I can't sleep. Anyways, we'll announce that tomorrow. We have the workshop we do. Again, it's more of a, we go very in-depth in your funds, et cetera, and then we have Funnel Launch Live. We have kind of a bonus event we're doing actually Friday. We haven't announced the details yet. We'll announce that tomorrow. We have a fun one in just a couple days. That's the additions to Black Card. Sound good? Pretty good.
Clap it up for that.
Pretty awesome. Additionally, Black Card members, when you checked in, you got this cool piece of merch, which is kind of fun. Now, something— Mason, do a little spin for us. Wow, pretty good, hey?
Come on.
Custom made. Now, what's cool about this, and maybe we— anyways, we didn't know how to tell you on whatever, but there's a QR code on the tag. For everyone that got a Black Card shirt, there's a QR on the tag, and what you do You scan that QR code, you opt in, and it's for— we're doing a giveaway. We're gonna give away at the last day. We get invited to a bunch of events. They're usually small, like the Greenwich Economic Forum, World Economic Forum types. They're usually $5,000 to $10,000 a ticket, and it's usually about 100 people are invited. We have 3 tickets to one of these events, about $5,000. So me, I'm going. Lincoln, who you're gonna hear from a little bit, is gonna go. And then also one of you guys. So we're gonna have one of our Blackcombers, we're gonna pick you the last day to come with us.
Oh, that's So awesome. make sure you guys scan that, make sure you guys opt in, 'cause it's gonna be a fun time, might as well.
And if you're not a Black Card member, no stealing the shirts and trying to get the QR code, okay? We'll check the emails.
But it should be pretty fun, we'll give that away as well. Additionally, we added 3 new office hours since last year. We have a compliance hour, we have a Series 65 training, and we added office hours every single day of the week. And so if you guys need help ever, like, we're there to answer and help you guys and to answer all your questions, so kind of fun. Yep.
Additionally, last year we had, so in Black Card, a lot of you get access to legal work and stuff, and we had, I think, 1 or 2 legal partners, We've added an additional 4 new legal partners this year. So for people that have international funds, people that are doing feeder funds, people that are doing European funds, et cetera, Canadian funds, we have legal teams now that can do all those types of funds for everybody in this audience. Last year we were pretty much just like domestic funds. Now we can do them all around the world. And we actually, I think, are adding another 2. We don't have 'em yet, but 2 pending right now as well to have a bunch of different law firms that you guys can use and access inside of Black Card. Sound cool? Clap it up for that. Pretty good. Pretty awesome.
Additionally, just to list off a ton of stuff, we had a ton of things.
We have 5 new coaches to Black Card, it's pretty cool. I don't know, are coaches in here? Raise your hands, where are they at? They might be, I think we have them doing something else. Okay, in the back, okay. Coach, we have 5 new coaches. We've revamped our whole course in phases. We have a full in-house pitch deck designer. We also have new banking partners, since all of them collapsed the last couple months. We had to find some new ones. So, we have new marketing partners, and that's kind of the new additions So clap it up for Black Card. Pretty cool. We've been working like crazy on all the new stuff, uh, to have for you guys.
Additionally, a lot of people have asked us to partner with them on their fund, and for the longest time we kind of said no, like we're not interested. But we finally kind of looked at it and we realized it could be something pretty cool. And so last year we launched Black Card Capital Partners, BCCP. Essentially, uh, what we'll do is we'll partner with you on your fund, and any need you guys have, anything you need help with, like we're there to serve and to make this fund to work. And so currently we have 8 people we partner with on those funds, which is pretty awesome. Um, yeah, there—
Yeah, we, uh, the idea is just we'll, we'll come help them with whatever. So we're very selective with who we partner with. We'll sit on their board, investment committee, we'll do it. It depends on each deal is a little bit different, but we actually come in, we select who we want to work with. So we have 8 so far that we've worked with. Lincoln is the one that's really headed that up, done an incredible job. It's been amazing. Primarily our Black Card members, the people that we're partnering with, which is pretty cool because those are amazing funds. We can, we kind of can help each other, we can help them a ton. They have a really cool idea and really Cool fund, we can go from there. So clap it up for Black Card Capital Partners. Pretty fun. Um, so we actually want to take you back a little bit. When we first started Fund Launch, um, we had no idea if anybody would even want to learn about funds. I remember talking to my dad and my brother, they're sitting right here, and we were like, man, I don't know if— do you think people want to learn about funds or not? Like, does anybody even care about this industry? And evidently they do. Okay, so people love to learn about funds. But it's funny, so I'll take you back a little bit. This is actually a picture of me and Mason. I don't know what year this was.
2018, 2019.
Maybe 2018, 2019. We were starting to map out what this would look like on a whiteboard. It's after that event horizon I talked about. And we were here and we decided we wanted to put together kind of a mini couple videos, a mini course for fun.
Keep in mind, like, there was no audience, no community out. Like, it just didn't exist. And so we were kind of taking a shot in the dark. Like, hopefully somebody will maybe watch this for $47 or whatever. So we put together this course, Bridger spent all weekend filming it. We had about $500 we were willing to invest into it. We put the $500 into ads and just, we're gonna see what happens. And over the weekend, that $500 turned into about $950 or so, which is, if you guys ever done like a startup business type, like that's pretty awesome. You have at least some customers. And that was the first step. And so we kinda saw that, we're great. So over the next 4 months, we just kept dumping the, you know, the profits into ads and kept doing that over and over again. And I think over 4 months, there's Like $55,000 revenue. It's really small, but we had about 1,000, 1,100 clients, which is great. And eventually everyone's like, what's the next thing?
Like, did any of you guys join that original? It was $47. It was called the Mini Vault. Anybody in here that bought that?
Since retired.
Yeah. Oh, a couple of people.
Okay.
This is awesome. You guys are like the OGs. That was the first thing we ever launched. We were like, well, people maybe like this thing. And we had 1,000 people buy and join the first about 3, 4 months. And so they were like, people were asking us, wait, what's the next thing? And this is, this is us on the whiteboard again, after many hours.
So for like 2 months, Bridger went out there and he was interviewing all the top fund managers in the United States. And we're kind of starting to build this really comprehensive course out because that mini vault was really menial. It was like 10 videos in it. So it was really small. And so everyone wanted the next big thing. He filmed and grinded on that. I was in the back trying to just promote this webinar and just kind of build up this hype for it. And because to this point too, like no one's ever really shown their face to us. Like there's a few buyers on the internet, but you don't really have that communication with them, you know? So we promoted this big webinar and On webinar day, to our surprise, there was like 370 crazy people that decided to show up and attend this webinar, which is pretty exciting.
This is a picture, so we brought my dad on, he's gonna speak later today, which is pretty cool. Who was here last year and heard my dad speak? Pretty fun, my dad was actually voted best speaker of last year, so he'll be speaking later this afternoon, which is pretty cool. We'll see if I can beat him this year, I'm gonna try to beat you this year, okay? But you remember when I was, it was pretty fun, we had a whole vote after, but this is my dad on the original webinar. So we had about, if anybody has thrown a webinar, any type of class, I mean, to get 300 people to show up was a big deal. I mean, we were, at least for us, we were like, this is so cool. Like we have people on, we get on live and the webinar software keeps breaking. So we're on, I think it was WebinarJam or one of those webinar softwares and it's glitching out.
The chat, they're so engaged. Like people are spamming every 2 seconds. There's like 100 chats coming in.
We're having people like type yes in the chat. And then it was like, everything would just break. It was like, and we were like, oh no. And so we're stressing out. I'm like, and I'm behind the camera. we do? What do we do? And he's like, I don't know what we do. And then, so Mason, who's a genius, he's like, he pulls out his credit card, spends, I don't know how much money, like $1,200.
It's like all the money I had at the time.
Yeah. Throws it on a credit card, bought the best Zoom account you can buy. So on Zoom, this is like pre-COVID too, this is pre— before Zoom, but he bought the best Zoom account possible. Thankfully there was a redirect, like, link. We put it in there, we booted everyone from WebinarJam to Zoom, and Zoom worked phenomenal. And it worked, and everyone, I think we only lost like 20 people maybe.
That's great, yeah.
Which was awesome, it was amazing that people stayed. We did this whole webinar, we launched this little teeny, it was called the Mastermind at the time, today it's called the Academy. We launched this little course, and it was amazing, I think 76 people joined on that initial launch, which was amazing. Anybody in the group that joined on the initial one? Curious if anybody's here, we usually have a couple here. There's a couple hands, I see a few over there, yeah.
Wow.
Pretty cool, well, thanks you guys for joining that original one, it was amazing. And actually, we're gonna talk about awards in a minute, a bunch of our award winners, the people that have won 10, or $100 million funds actually were on that original call and joined, which is amazing. They launched successful funds. It was really cool. But we launched it anyways. We do this whole webinar. It's awesome. It's going good. And I look behind the camera because it was just a stressful— well, it was like 2 hours. I look and this is in my house and Mason is behind the camera face down on the ground with his hands like this over his head on the floor, like just breathing. And I was like, Mason, we did it. And he's like, I know we did it. It was just so stressful. So It launched, it was amazing. So kudos to Mason for doing this. This is us, a picture. You can see the stress kind of draining from our face. This is literally right after.
Um, it was at this moment too that we kind of started to realize like, okay, this is something special and this can actually build something crazy. Yeah. Um, and that was kind of the breakthrough moment for us, which is pretty awesome.
So, so thank you guys for joining that original one. And that's— we really put everything on the line for that. If that wouldn't have worked, we probably wouldn't be here today, um, which is pretty cool. So after that, we got shoes to celebrate. As you guys may have known if you follow our Instagrams, me and Mason love sneakers. We love shoes, we love getting special shoes, et cetera. And so we got shoes to celebrate. And so we got these original shoes and we actually wrote, we like signed the bottom of 'em. If you see like NBA players will do that, like they'll write special stuff about their shoes on there. So we wrote like the launch date, the day we did the webinar, how, like we kinda wrote the little story. Just as like a memorabilia item on our shelf. And then since then, pretty much every major milestone in our career, business, whatever, we've bought shoes. So I think those ones, which ones are those ones, Mason?
These are the million-dollar shoes.
So when we hit $1 million of Funnel Launch, Mason bought these shoes like custom and stuff on the side. I actually just got these shoes for today, which is pretty cool. I was expecting this to go really well, so I bought— I pre-bought my shoes this year. But these are like custom. They've got anyways our logo and stuff on them. I have a shoe designer that makes these shoes. It's pretty cool. So it's kind of fun. So we love getting shoes. It was a cool way to like have a moment, like something you celebrate, because in business it's typically pretty boring. You like make some money and what do you do?
Go to dinner?
Like, like, what do you do? Like, you like, okay, we'll go party tonight. Like, what do you do? Like, there's not like this award or trophy or something to— like, we love playing sports growing up, and it was just cool to like have your hand raised, like get a championship or something. So we decided to make something for this group in the fund space. Some of you guys may have seen this before. So we launched last year. This is called the Wall Street Rebel Award for any fund over $10 million.
Woo!
And actually, last year we had a bunch of award winners come on stage, and you saw on the screen we have a bunch of new awards. So actually, Mason, yeah, do you want to— let's grab these real quick. So any fund over $10 million AUM, these are a custom pair of sneakers, custom to you. So right here, yeah, here they are. They're all one-of-ones. They're unique.
Carbon fiber. They're custom painted. Your logo and stuff goes on them. It's pretty cool.
So they have your name right here. You can't probably see it from the camera, but your name's right here. Yeah, we can— we can add different stuff for your sneakers. What you can do is go put it on the shelf, etc. You want to grab the box too. It comes in a custom box with like engraving your name. It comes with a nameplate, like it's an actual like trophy thing. Actually, over the last year we've made it even better and better. Um, we'll let Mason, uh, bring this over. It's got QVC right now. It doesn't feel like QVC doing us a little online shopping. Here we go, our next item. Uh, so this is the box. It's got engraving. You can put your name on everything right here. So it's kind of an award, something you put on your shelf like, dude, we did this, which is awesome. Does that sound kind of cool? Who would love to Get something like that on your shelf. Yeah, wouldn't that be kind of cool? So this year we have a bunch of award winners. Now we also, we have different people at different stages. So we actually launched a new award this year. I don't think anybody's seen this. So this is, we have a lot of funds over $1 million. So this is the Million Dollar Wall Street Rebel Award. So tomorrow on stage we're having an award ceremony. You guys can get one of these if you have over $1 million in your fund to kind of celebrate the milestone. So you'll come up on stage, you'll be right here with Mason and me. get a picture and be on stage, etc., is kind of the winner.
It's kind of the teaser for the, uh, the big dogs too.
Yeah, so which is pretty fun. And then we also have the $100 million award. So this is, uh, I think Mason's got over here too.
24-karat gold on the paint. That's pretty nice.
Yeah, the paint actually is 24-karat gold paint, um, which is awesome. They're custom made to you, got your name on the back.
Jordan 1s, which is like the most legendary shoe ever. So yeah, kind of fun.
Kind of fun. And we can customize them to you. So I think this year we have 51 $1 million award winners in the audience right now with us. Clap it up for that, which is pretty cool. We have 39 $10 million award winners. You can keep clapping for that as well. I guess we can do it at the end. And we also have 12 $100 million award winners sitting in this room right now, which is pretty cool. Okay?
That we know of.
Yeah, that we know of. So, actually, we kind of— this is a new award. We launched stuff on emails and stuff. If you're in the audience right now, we weren't gonna do this, we decided to do it. We had a couple people say they were winners. If you're in the audience, we're doing the award show tomorrow. At the end of this session or whatever, during breaks, go to the back of the room and fill out the little thing. You have to, now you have to prove that you have this. Like, think about we're in the court of law and you needed to prove that you had $1 million AUM in your fund. But we would love to have you on stage, and what we'll do is probably 2 weeks or 3 weeks from now, we'll make you a custom pair of shoes and we'll send it to you. Does that sound good?
Good.
So end of the session, back of the room is where our team is at, all in the back right there, that's where you go. Does that sound good? Okay, pretty cool. Additionally, that's our awards. We— this is kind of cool. I don't think we've showed this to anybody, which is kind of fun. You guys ready? We've had a lot of our members struggling with investor backend portal, listing their fund on the website or portal. So like doing like a website building, KYC, AML checks, uploading and sending docs efficiently. So we thought it'd be cool if we fixed all of that? Ooh, drum roll please, everybody. Okay, this is the Fund Launch Marketplace. Okay, we've just been— we've been in beta test with our Black Card members last few months. We've had a few members on there. So what the Fund Launch Marketplace is, is this right here. So you can see some screenshots. These are actually live right now, marketplace.fundlaunch.com. You can come list your fund, investors can come see it. They can see the full offering docs, they can see a video on your fund, they can see the pitch deck, uh, PPM, LPA. They can actually invest Through the portal, it does capital calls. It does KYC, AML, all the stuff, all in one kind of hub. Now these are funds. The funds listed right here are 506C, so they can publicly advertise. We also have 506Bs. They're just hidden. We have I don't know how many. We have a dozen or so hidden ones that you can just send directly to your investors, essentially as your website or landing page. You can collect emails, build a list, etc. Does that kind of make sense? For with me, say yes. Okay, you guys are there. This is actually example. I put my fund on there, so I run a crypto fund, Ugly Unicorn. Crypto fund, which actually we've been killing it. It's been so awesome. We've done really well. So you can come on here, you can kind of see down, we have a full video of us presenting the fund. So an investor can come and just watch and see what we're doing. Um, here's our pitch deck all down here. We have our team slide, etc. We have all of our documents. They can download our pitch deck, they can look through our, our documents, and you can make them if you want. You can add verifications. They have to verify their net worth before they get your stuff. They can— you can add whatever blockers you want so people don't steal your, your docs. All right, there. Here you can come and you can actually type in, hey, I want to invest $100,000. You can type in— it actually does the KYC and AML on the platform. You can integrate with DocuSign to send the documents directly to your investor. They sign the docs, fill them out, and they are subscribed in your funds.
Pretty cool.
Yeah? Isn't that kind of awesome? Okay, there's the FundLaunch marketplace. So, again, full website, opt-in page, KYC/AML, DocuSign integration, investor backend portal, And links also to your third-party admin. So if you have a third-party administrator, you can actually link and upload documents here back and forth. So even if you have an existing fund, you could use this to just do, I mean, marketing or advertising, whatever you want to do on there. Kind of cool, okay?
Yeah.
So when is this available? The big question, right? When does this come out, etc.? So this is available today for all of our Black Card members, which is kind of cool. So go Black Card, it's pretty awesome. We're going to continue to beta test this with our Black Card members. And then the plan is it's available to everyone over the next 6 to 8 months. We're gonna start rolling this out. What we're gonna do is selectively pull funds and put them on the platform and go from there. Pretty cool. So clap it up for the Fund Launch Marketplace. Pretty awesome. All right, I know we had a lot of stuff. You guys, you guys still with us? Still like this? Okay. Additionally—
Kind of show— yeah, additionally have our whole value ladder here up on the screen and A few of those products are pretty new. You probably see up there the Whale Group and the Black Card Capital Partners. And so let's talk about Whale Group for a second. Last year we had a lot of members who started to get really successful and they got the thing. The point of Black Card is to get your fund launched and you did $10 million. And so once they did that, they're like, what's the next step? And we're kind of sitting there thinking, and the next step is probably to join a higher level group that is more about just leverage, a few tricks here and there, and things that just make the needle move a lot faster. You don't really need Legal Startup and all those things anymore. So we decided to launch Whale Group, which is what this event is. And we had our first one back in February. We had everyone helicopter into this private cabin in Utah. We had a private chef. And for 3 days, we kind of just had a blast. So that was the first event in Salt Lake City. And we actually have a video for it too, if you wanna show it. Yeah.
And last night we did dinner with our Whale Group members as well. So it's a small group, tight-knit. You have to have a $10 million fund to even apply to join. So it's all active fund managers, which is kind of cool. So yeah, here's a— we'll cue a video if you guys wanna dim the lights and get the volume up. There's Whale Group, everybody. Pretty fun. So just everyone's aware, Whale Group, it's $75,000 a year to Join 20 members. We have about 14 that have joined, so I think we have 6 spots open. So during this event, if you want to come talk to us in the back of the room about Whale Group, etc., our next event is gonna be an Alaska fishing trip. We're going in July, we're gonna go river fishing Alaska, which is pretty fun.
It's pretty cool.
Those helicopters, by the way, one of them— anyways, we're not doing helicopters again, I don't think. It was really cool to have helicopters.
One of the doors flew off.
And literally on the way home, the windstorm picked up and like the door ripped open and like, they had to do an emergency landing on the highway. It was—
It's part of the experience.
That's— it was all planned. We're not doing helicopters again. But it was cool to have helicopters. We had 2 helicopters anyways. Yeah, we're not doing that. Okay, last thing, and then we'll keep moving here. There is, we believe, a massive move towards tokenization of assets and funds, we believe, happening right Right now. Wayne Gretzky talks about, don't skate where the puck is, skate where the puck is going. So, we believe where the puck is moving right now, and again, we don't know when or how or how quickly regulatory bodies, but we believe tokenization of assets and funds will be the next thing. And so, we're actually working very hard on kind of getting ahead of that. So, just so you guys are aware what that means even. Last year, you guys know the Denver Broncos sold to the Walmart family, the Waldens. There was another bid. It came from a DAO, a decentralized autonomous organization. So, similar to this, what happened was, just for an example, let's say 10,000 people put money in together. I don't know if they raised, let's just call it like $3 billion. They went and actually bid on the Denver Broncos, had a competing bid. Now, they didn't go with them, but imagine if they did choose that. You'd have a fractionalized NFL team. And if you were one of those 10,000 holders— Vote for trading players. You can— Yeah, we want to trade the quarterback. We all just do a vote, and 50% say yes. Yeah, that guy's traded. That'd be kind of cool as a fan. Isn't that a cool idea? And, uh, I mean—
I want a part of that.
Mr. Unlimited, right? Get him out of there. Um, so that's the idea of tokenization of assets. Additionally, you could sell your position. So if you had one of those 10,000 spots, you can sell it on the secondary market. You can bid it up or down. So they've been— some of these have been happening with like real estate, for example. They fractionalize, let's say this building, you fractionalize ownership into 100,000 pieces, and any of us can come just buy a piece of it. You also have smart contracts that allow you to do distributions effectively. So, if this building produced rent, you could just have a rental distribution. It goes to anyone that holds that contract.
Instant.
Gets an instant distribution. That's the idea. And we've kind of coined this phrase called smart funds. So, something that we call smart funds that we are going after heavily right now. We were— we wanted to actually do a full demo for you guys on stage. We are— our dev team is so close to get us all ready for you guys to launch. With SVBs, with funds, etc., which is pretty cool. So Smart Funds is coming out very soon. What it'll allow you to do is have fractionalized ownership, secondary markets to sell positions. The whole fund is ran through smart contracts, and then distributions payouts are all run through what we call Smart Funds. That kind of cool. Now we're still waiting for SEC updates and IRS. They're continually updating this industry, so we'll continue to work with them. That's why, again, we're skating to where the puck is going. they've been a little anyways wishy-washy or blind— not blind, but slow to get to this asset class. But we'll see where we're going to be at.
And the fund world's pretty traditional, pretty old-fashioned. So we hope to be the ones on the forefront of the next era of that. And so that's kind of the vision. And we have the whole community to do it with. So pretty fun.
Yeah, we got this whole group, which is kind of fun. Okay, so give it up for Smart Funds. Pretty cool. Okay, that'll be coming out in the near future. We're working on like crazy right now. Hey, kind of fun. That's the State of Fun launch.
Yeah.
We're doing okay. Yeah, and then we're just getting bigger and better every single year, which is pretty cool to see everybody. So with that, thank you guys. You guys can give a huge round of applause to Mason Brains, everybody. Awesome, thank you, Mason. All right, now let's talk about funds, yeah? Ready to get into it? I'm gonna talk fast, I'm gonna go quick, so take some notes, we're gonna fly through this, sound good? You guys with me? Say yes. Actually, if you can stand up for me, just stretch out for a second. I know we're gonna be here for a sec. Stretch it out. If you can high five the person next to them, say what's up. Say you're awesome. I love it. All right, all right. Thank you very much. Take your seats. Take your seats. Let's dive in. Here we go. Again, family reunion. I love it. I see people like hugging, saying what's up. Okay, so real quick, just background on me. I know some of you guys don't even know who I am. My name is Bridger Pennington. This is actually a picture of my dad and my brother right here. They're sitting both front row, which is amazing. We'll tell their whole story in a little bit. My brother is an investment funds attorney, just so everyone's aware. So worked at the largest law firm in the world, has done multiple huge deals on funds, multi-billion-dollar funds. My dad co-founded a deca-billion-dollar family of funds. You guys will hear from him tonight. We've got a pretty interesting family dynamic. None of us went to Ivy League schools, none of us went to Harvard, et cetera. None of us worked on Wall Street. And really how this whole group came about was, you know, we kept talking like, I think more people would want to learn about this. We had people coming and asking my dad or my brother, like, how'd you guys do funds? How'd you launch them? And I'll tell the story in just a minute, but it's pretty cool. And we have some fun family dinner conversations. And, you know, every time we get together, we're talking funds and finance and all this kind of stuff that you guys are gonna hear. So we wanted, essentially this event is built around, a lot of people said, well, Bridger, you're so lucky you had an amazing dad and brother and et cetera. You know, I wish I had that. And guess what? Now you do because we have this event. You're here. Like, this is what we're doing is giving you an extension of that. Does that kind of make sense?
Okay.
So, which is pretty fun. Now, we're going to dive into this. My goal for the next 3 days is to convince you of this. A fund is the best way for you to scale your business or investments. All right? The goal for the next 3 days is I'm going to show you how to build an investment fund without number 1, a track record, 2, working on Wall Street, 3, a fancy degree, and why you should launch a fund or syndication to scale. scale your business or investments. Talk about that first piece of leverage, right? Capital, how to do that. If you're with me, say yes.
Yes.
Does that sound good for the next couple of days? Also, I want you to feel totally confident in the next 12 months that you can come up here and win on stage a pair of shoes running a $10 million fund. I want you to feel confident that you can do that and be up here next year and set that goal in your brain like, I'm going to be there. And it's cool for people, a bunch of people from last year like, dude, I did it. The last 12 months, we're here. And they're going to be up on stage tomorrow. Getting their awards. Okay, I want you to be there. Now, a fund is the best way for you to scale your business investment. So dive into funds. We're gonna start very basic, and we're gonna go advanced pretty quickly. Does that sound good? Okay, I know a lot of you guys have probably heard this, but we're gonna go. I promise we got some some new stuff for y'all. Sound good? So what is a fund for people brand new? Actually, first off, who's this is your first time to Fun Launch Live? I know Devon did. I want to see it just for me. Oh, awesome, man! A lot of people. Okay, this is great. So we're gonna you guys yeah welcome in. It's gonna be awesome. So, what is a fund? We're going to talk way basic. Fund Launch Live, Fund Launch. Like, what even is a fund? What are we even talking about? All a fund is, is a pool of money. Investors put money into that pool. People like me and you can draw from that pool. We can go make investments. We go buy assets. We'll share a few examples in a minute. Whenever those assets make money, they flow back to the pool and get split between ourselves and the investors. That's it. Okay, it's not that crazy. Think about like back in the day, like a blacksmith shop, like in the Middle Ages. Hey, we're gonna open up a blacksmith shop. I want to get some money, put some money in. Whenever the blacksmith shop makes money, we'll just split the returns. That's all really a fund is, the most basic sense. That kind of makes sense. It's not that crazy. So if you've ever heard of private equity, hedge funds, real estate funds, debt funds, credit funds, they're all funds. We actually helped a lot of people launch these types of funds in our community. So, what's the difference then between all of these? So, I'll start with the middle one, real estate funds. It's in the name. A real estate fund is a pool of money and they go and buy real estate. When the real estate makes money, it flows back to the pool and then we split that with ourselves and our investors. It's not that crazy, right?
Right.
Private equity fund. A private equity fund is a pool of money. Instead of buying real estate, they buy privately held businesses. So, they buy a bunch of coffee shops in a region. They go buy a bunch of— I'll actually share a few examples, a bunch of retailers in a certain region. They group them together, group businesses together, and then they, whenever those businesses make money, they split the returns. That's privately held businesses. Hedge funds, those ones are doing public businesses typically, public security, stocks, bonds, options, forex. Those are publicly held securities, okay? That's all a fund is. It's not that crazy. Whenever you hear on the news like this hedge fund manager, private equity, And a lot of us finance, I hate the world of finance because they make these terms so confusing for people to understand. It's really not that complex. They're all structured almost exactly the same. We launched 130 funds last year in all these different categories. Is that making sense? If you're with me, say yes. So, a few examples. So, The Big Short. Anybody seen this movie? Awesome movie. Really fun. All these fund managers, the reason they could short the housing market in 2006, 2007 is because they had a fund behind them. You ever wonder like, man, I wish if I could go back in time, I would have shorted the housing market. Well, the reason they were able to do that is because they had a massive fund behind them. Does that kind of make sense? The reason people can take advantage of— we're going to talk about economic right now. We're in economic, interesting economic times. We have a bunch of speakers talking about that. The reason they can take advantage of those things is because they have a fund.
Okay?
A great example of this, a private equity firm. Anybody know Sycamore Partners? Okay, Sycamore Partners. Well, I've, you know, I usually ask this, like nobody raises their hand. I'm like, have you heard of any of these brands? Did you know they're all owned by the same private equity fund? Kind of crazy.
Crazy.
All those brands are owned by the same group, Sycamore Partners on Wall Street, manage about $11, I think $11, $12 billion. That's the world of private equity. Blackstone Private Equity, $131 billion. They own all of these brands. Kind of crazy. Like a lot of people don't know these these companies they're owned by the same individuals. Actually, I was looking at Blackstone as well. I went on their website. So they manage right here five hundred seventy-seven billion total AUM, which is just phenomenal amount of AUM. I just can't even. I was just trying to put into perspective of how much they control and own. And I was looking on their website and they had this picture there. And I was like, huh? Like do they own? Like what do they own? Like what do they like? They own one of those buildings or the one on the corner? Like, what do they own? No, they own the whole thing. That in downtown Manhattan, they own 11,000 units, 56 buildings in Manhattan. And I was like, oh, they own that. They had to rent a helicopter to just get a picture of their asset. This is the world of funds. You need to understand this game. I mean, it's the biggest game on earth right here. Blackstone as well. Did you know they own MGM Grand? Now, I know they just exited this, but as of a few months ago, they owned MGM Grand. You guys know that? Oh, and they also owned Mandalay Bay. Oh, and did you know they also own the Cosmopolitan? So, you're thinking you're, hey, I'm going to, I'll never gamble at the MGM. I'm going to the Cosmo. You're going to the same people. It's the same people that own all of them, okay? They're like, okay, go to the Cosmo. We'd love for you to go to the Cosmo, okay? They own all of them. This is the world of funds. Okay? These are a list right here. I've done this before for groups, but these are all hedge fund managers right here. And there's some huge numbers next to their name. You have $4.1 billion, $3.2 billion. Now, let's talk about net worths for a second. A net worth like Elon Musk's net worth, I think this year has dropped like crazy. It goes up, it goes down because his net worth is based on how many shares of Tesla he owns. For example, if Tesla If their stock price goes up, his net worth goes up. It goes down, etc. Does that make sense? That's how a net worth works typically in the report. These are not net worths on the screen. Okay? This is their 2022 earnings alone, just from one income source. This is not personal investments. This is not their other portfolio. This is their hedge fund produced Ken Griffin $4.1 billion last year. Pretty wild. To put it in perspective, here's a question. Actually, I'm curious if anybody has the answer. You might. If I gave out, or you gave out, $76,000 a day, every day, wouldn't that be kind of fun? $76,000 a day, every day to somebody. You find someone new on the street, you give them $76,000. How many days, or months, or years would it take you to hit a billion, $1 billion? Anybody know? Shout it out.
1,000 years. A year.
A year? Okay, shout it out again. Who else?
4 years.
4 years? $76,000 a day, how long till you hit a billion? 31 years! 31 years. It's about 31 and a half, you'd hit a billion dollars. People, when people talk about a billion, my dad did this last year, if you talk about a billion, a billion's a lot of money. Imagine If you're a— anybody 31 years old in here? Right here, couple people, 31 years old. You gave away $76,000 every day your entire life till this point, that would only be $1 billion. Ken Griffin made $4.1 billion last year from one income source. Talk about another world of wealth, right? When I talk about a fund, you need to launch a fund. You need to understand this game of funds. It's the biggest, baddest game in the world. That's why we're here. Yeah? Isn't that kind of cool?
Who's with me?
Say yes.
Yes.
Alright. I'm sick of Wall Street elites controlling everything. We need more of us. That's why we do this. We need more of us cracking into this industry. I'm sick of this only being reserved for the Ken Griffins. And by the way, Ken Griffin's awesome. Nothing wrong about Ken Griffin. But the Ken Griffins of the world just controlling everything. People like us need to understand this game. There's a reason we call ourselves the Wall Street Rebels. Wall Street Rebels, people!
Ow!
There's a reason we call ourselves the Wall Street Rebels because we need to understand this game. And guess what the game they play? It's just the game of funds. Those people that own those other businesses, all they did, guess what? 20 years ago, 30 years ago, they— and we're going to share all actually all their stories. I've studied all their stories, etc. They just started a fund. And they got it bigger, and they got a little bit bigger, and just got bigger. And they they used this vehicle of funds to do incredible things. Is that kind of making sense? That's why I believe everyone in this room should be considering launching a fund, if not syndication, like right now. Especially we're talking about 2023 and timing, etc. Especially right now. Last year, the message was I want to start a fund. This year, it's like I need to start a fund. We'll talk about more tomorrow, but. It's an incredible time to be in this game. Yeah? If you're with me, say yes.
Okay?
We're the Wall Street Rebels. That's what we put on our shirts, our brand, etc. We need more of us to take over and decentralize this industry essentially is what I believe. Okay? Now, who this works for? This works for people trading. It's for people in crypto, forex, futures. Actually, where are you at? Where's my traders? Who's a trader in here? Raise of hands. Let me come out. Actually, I want to see my— I want to see some people. Keep your hands raised. Traders, where are you guys at? Make some noise, traders. Hey, there they are. Good to see all my traders. We got Jay the trader right here. Okay, I love it. Where's my real estate people? Make some noise. Hey, lot of real estate people. There you go. A little bit happier than the hedge fund people. It's been a tough. It's been a tough year in the public markets. Buying and selling small businesses. Any my private equity business? Make some noise. Okay, awesome. I love it. I love it. What's our next one here? Investing in startup VC, startup seed capital. Make some noise. Okay, there you guys are as well. Sorry, I gotta keep looking. Okay, who's a like kind of a late stage private equity? You scale existing businesses. Raise a hand. Anybody? Make some noise. Okay, there they are. And then finally issuing loans. Where's my debt people? Who's doing debt? Make some noise, debt people. There they are. I love it. And then just undecided. Who's here to just learn? Raise a hand. Yeah, make some noise for you just coming. Hey, that's awesome. I'm all about that. I love people that if you have no clue about this industry, this is the perfect spot to be. Come here. We're and that's why we're starting simple basic. We'll go advanced. We'll go the whole time. Sound good? Yeah, I love it. Now a lot of us make excuses not to start a fund. I know in your brain, my brain. Oh, it's I'm too busy. I don't have the right financials. I don't have the right pedigree. I don't have the right. A lot of us have this kind of stuff, yeah? Now, last year I mentioned there is one person that has shattered all glass ceilings for me. Do you guys remember who it was from last year? Anybody remember? Shout it out. Do you remember? They shattered all— this one is a guy. He shattered all expectations for me in the world. It's a glass ceiling that if he could do it, I could do it.
Pete Davidson. Pete Davidson.
This guy is amazing. The fact that he can date Kim Kardashian means we can do anything. Okay? All right? Say, I can do anything. I can do anything. If this— and I found a topless picture of Pete Davidson just so you could just see how sexy he is of a dude. If he can date Kim Gay, we can do anything. Now, this year though, I found someone new. I found someone new that's really broken through glass things for me. You guys want to know who it is? There's someone new in my— I'm like, if he can do it, I can do it. I love doing that. He can do it, I can do it. The fact that Joe Biden is president right now. Wow. The fact that he's— I mean, nothing— I mean, he has dementia. I don't know, right? Now there's about 30% of this room that's like, that's a terrible— that was bad. So to help the other 30%, the fact that this guy was president means we can do anything in this world, okay? Clap it up for that. You can do anything, okay? The fact that these 2 gentlemen are our last 2 presidents means me and you can— the The sky is the limit, okay? And the crazier fact is they are both the front runners for the next election, which I can't even— if anybody's a political person here, please, I just— let's shake it up.
Just shake it up.
That's all I can ask for. Let's shake it up. I'll vote for both parties. I don't care. I'm not either way. Just let's just shake it up. Sound good?
Okay.
So, but if they can do it, we can do this. All right. Now again, a fund is the best way for you to scale your business or investments. All right. Now, I want to go deep. I'm going to— if you guys want to get your pens out, I'm going to go fast through some examples. I want to share a bunch of examples to give you ideas of different types of funds people are doing. So, where's my real estate people again?
Woo!
There they are. I love it. I'm going to share an example of how one of our— actually, people in our group went from flipping. Any house flippers in here? I'm sure a lot of you guys have flipped a house or changed houses. He flipped 3 to 4 houses a year. Next year, flipped 70 houses. I want to share exactly his example. Sound good? So, this is what he did. I'm going to summarize— you house flippers, I'm going to summarize your entire job in about 30 seconds.
Okay.
Here we go. You guys find a house. Looks awesome. Let's fix it up. We then go and we got to get money for it. So, we go, we get hard money, investor money, bank money, or your own money. We get that money together. We put it into an LLC. We have a little operating agreement. Throw the money in. We then go flip the house. We renovate it, do all the stuff. We then make a little bit of money. Yeah, we're making some money. Okay. Feeling good on the way to the bank. And then we start over. We find a new house. How'd I do houseovers? Is that pretty good?
Yeah.
It's your whole job in 30 seconds. That's a good job. You make actually good money. There's good money in house flipping. So this is what I like to call the syndication loop. And by the way, syndications are awesome.
I've—
some people keep asking me like, Bridger, are you like anti-syndication? No, syndications are amazing. They're great to build your track record. It's a great way to get some deals under your belt, get going. But this guy, this gentleman we talked to, Brent, he was like, hey, I want to do the next thing. I want to do more. It's hard to get economies of scale. So we said, Hey, what if we set up a fund? So instead of every single deal, you're raising money, trying to go to the courthouse, calling people Friday afternoon, wire your money in, et cetera. You set up a fund. You raise the money once, you set up the legal documents once, and you can go flip as many houses as you want over and over and over again. That's what he did. So he set up the fund once, money once, and then ta-da, he went and flipped 70 plus houses in one year. And also he had economies of scale. So think about this. Do you think you'd win more deals or less deals if you had a fund ready to go versus like syndicating, trying to get money in the fund? More deals or less deals? More, right? Do you think you'd get better financing or worse financing from banks with a fund? Better or worse? Probably better, right? Because you have a relationship, you're doing more deals, you have more capital, you probably get better interest rates. So all of a sudden, ta-da, he now can do more deals cheaper and he has economies of scale. He can hire hire multiple crews that go from house to house and he has economies of scale, which makes all costs go down. Pretty cool, right? House cleaners, is that kind of making sense, that example? Love it. If you're with me, say yes.
Yes.
Okay, how this works with businesses. It's actually a true example. This guy calls me. He has a gun store that does $10 million a year, roughly, okay? Selling guns. He's trying, he's like, Bridger, I want to scale. So, what's my options? And typically us, We think the options to scale a business are, we call it like Kevin O'Leary types. Hey, I'll give up 20% of my business, put money in, and then we'll go scale. And/or I'll get some debt. So I'm gonna go to the bank, I'll get like an SBA loan or a debt loan, et cetera. And that's how we're gonna do it. We have a bunch of debt on the business. It's typically what people think of. And I said, hey, there might be a third option. You wanna hear what it is? It's called a fund. So this is what we're setting up for him actually right now. So he has a gun store. You set up an outside fund. See how I separated those? So outside fund, you raise outside capital for this fund. That fund comes in and buys the competitor stores because he wants to go and buy up all of his competitors in a certain region. So you use that fund, you go buy your competitors' stores, and then, hey, guess what? You're pretty good at running gun stores, right? Let's contract you out. Let's pay you a 5% corporate fee to come run the gun stores for us. And you can put your branding, your logos, et cetera. That's what the fund will pay. To have you do all this. So, ta-da! The fund goes and buys, let's call it, 6 or 7 competitor stores. They contract his existing store. They pay maybe a 5% corporate fee to do that. He now can put his branding and logos on all the competitor stores and essentially controls them. And now he has a monopoly in a whole region of stores. Kind of interesting, right? Now, when those stores make money, the money he pays a 5% corporate fee back to His existing business, it goes back to the fund and they split. Let's just call it 80/20 on the returns. And he actually, he's also an owner on the fund. So he makes a 20% split there. He also gets the 5% fee there. Is that kind of making sense? You guys following along? Pretty interesting, right? This, you can do this with businesses, which is kind of funny. If you're with me, say yes. Okay, chiropractor shops. We have a couple people that we've actually met that are doing this. They found they can group chiropractor shops together. and sell them for a multiple. It's called a roll-up. If you've heard of dental roll-ups where they're buying dental practices together, this is kind of a similar thing. So, for example, this person has a fund. They go buy, let's call it, 8 chiropractic stores. They put them together. They then package them. They get all their overhead down. They get their marketing expense down because they have, again, economies of scale. We'll talk about that in a minute. Ta-da! They can, let's say they buy them for $8 million, $1 million for a piece. They can turn around and sell them. It takes about 12 to 18 months. They sell them for $12 million. Pretty good. $4 million gain. They split it. Let's just say 80/20. $3.2 million to investors. $80,000 net take-home to him. Not bad. Who would like to make $800,000 doing that? Am I the only one? Yeah. Okay. That sounds pretty— I'm like, yeah, that doesn't sound that crazy. Buy 8 stores, group them together, sell them in a year to, you know, make that much money. It's pretty cool. Another example. I'm gonna go quick through these. This is like, imagine a small diner. In the list, this is actually Arshel's in Beaver. I love Beaver. Anybody been to Beaver, Utah? Make some noise for Beaver, Utah. Woo! It is like the pit stop between— I live in Salt Lake City— between Salt Lake City and Vegas. You always stop in Beaver because it's just located perfectly for your gas tank. So everyone— it's only— it's like made for just gas stations, the whole town. But there's this little spot called Arshel's. It's got amazing stuff. I actually have a friend that comes in and buys these. So what you would do is you find a That, you know, that local town, they've got the best pies and there's only one location, right? So you come in, you say, hey, why don't we scale you? So you come in with a fund, come buy up Archuleta's and then say, hey, we're not, we're not going to be one location. We're going to turn you into 10, 20, 30, 50 locations, et cetera. Again, we'll just split the returns with you as the owners and we'll go from there. Does that kind of make sense? There's actually a group in Utah called Mercado Partners. Andrew Smith, he's been on some of our, you guys seen us, we did a whole episode together. They do this. Anybody heard of Mobetta's? Anybody eaten Mobetta's before? Awesome restaurant in the western United States. They found Mobetta's when it was like 2 locations. And now I think, I don't know, let's just call them 100+ locations. They found Swig when they were a small location. They have a bunch of brands. They essentially go to small towns, find the best food in that little small town or that location. They take them and they blow them up like crazy. They're about a $400 million fund right now that does this private equity. Kind of cool. Pretty interesting model, right? Now, Bridger, how else does this work? How does this work in e-commerce? Is this okay, by the way? You guys like these examples?
Yeah.
That's okay? Keep going? I think it's cool to just share different examples of how this works in real life, and I hope you guys can take notes and like think through like this could work for me. How this works in e-commerce, this is actually a group in our, in Black Card. $200,000, they raised $250,000. They went out, and I'm gonna use rough numbers here, but let's just say roughly $250,000. They go and buy 5 Amazon stores for $50,000 apiece. OK? $50,000, $50,000, $50,000 all the way across the board. They group them together. They are good at scaling Amazon businesses. So, they group them together, etc. In a year, those 5 stores and net free cash flow. Let's see my clicker here. $350,000 net free cash flow. So, what they do is they actually take the money and return it all back to their investors. plus a 40% return in one year. So, investors love it, but they don't sell the assets. They still own all 5 of those stores, which is about a $3.5 million enterprise value that they now free and clear own because they purchased them. A lot of us think we got to like, I got to be the next Mark Zuckerberg. I got to think of this business. I got to start it. I got to scale it. When in reality, a lot of us can go buy existing businesses and even boring businesses, vending machines, laundromats, Amazon stores, and make a really good amount of money doing that. Does that kind of make sense? If you're with me, say yes. Okay? Now, you might be asking like, how are they getting those stores so cheap? Typically, these people that run Amazon stores, they find someone who's 23 years old and just starting out and, hey, you want $50,000 for your store? Dude, $50,000 is— yeah, I want $50,000. That sounds amazing. I'll take the store. And they, you know, Oh yeah, I exited my business for $50 grand. They can scoop up some really cheap e-commerce assets because that market's not very efficient. There's not a ton of big players there. So, they found that they can come in and find these really good deals. That kind of makes sense? Pretty cool, okay?
Yes.
Now, how this works in stocks, my hedge fund people, how does this work in your space? Typically, we can talk about hedge fund incubators. You guys can start a small fund, but typically, you know, you're trading your own money, let's call it, or maybe friends and family that are sending like Venmos or wires. All it allows you to do, a fund allows you just do more money. Yeah? So, if you're trading $1 million, you can now trade $10 million or $20 million. You can do bigger contracts, etc. Get better deals. Yeah? Sound good? Alright. Make a little noise for that. Pretty cool. Kind of awesome, right? Make a little noise. Alright. Let's go a little bit deeper onto fund structure. Hopefully, this is okay. I just want to set a bunch of groundwork, a bunch of frameworks, etc. So, let's talk about funds. The next structure I'm going to show you is how 99% of the world's private money is raised. Okay? I want to show you the actual structure of how these funds are built. So, we talked about what is a fund. We have ourselves, our investors, our assets. They just have different names in the fund world.
Okay?
So, these names are, instead of a pool of money, it's called a limited partnership. So, a limited partnership, this is again 99%. I know there's different nuances, but this is how 99% of all funds in the world are structured. So, limited partnership, which is your pool of money. You have a general partner, just like me and you. That's the fund managers. And we also sometimes have a management company. So, this is us on the left here is us. We manage the limited partnership just here that goes and makes investments. All right? And we have investors that put money into the limited partnership. They're not called investors though. They're called limited partners. Okay? So, limited partners put money or capital into a limited partnership, which is managed by a general partner and a management company. Does that sound good? Yeah. That make sense so far? Now, this is all governed by what we call the Bible. This is your— this is called an LPA and PPM agreement. They are thick. John writes these, my brother. They are massive. They're like 100 pages each. They're huge. We call them the Bible. The reason they're called the Bible is they control all the laws, covenants, bylaws of your fund.
Okay?
So if— now, the cool thing about funds is you get to write the Bible. One of the biggest questions I get Is Bridger? Can my fund do this or can my fund do that? Well, typically the answer is yes. It just needs to be written in your Bible. Okay, so if it's in your Bible, then you can go and do it. If that kind of makes sense. Okay, if you're with me, say yes. So if you you'll hear like people talk about oh my LPs are putting money in they what they mean is your limited partners. My LPs that's their investors. My LPs are throwing money into my GP and my LP. My LPs are throwing money and that's what they mean. They're talking about this general. Partner limited partnership structure. Once you learn this, you'll start hearing on the news, you hear on podcasts, etc. You start hearing this around the space.
That sounds—
does that sound good? Now, Bridger, how did you learn all this? Yes, cool if I tell a little story here real quick. So this is actually— my dad's gonna speak later today, but I actually grew up in this house right here. This is a picture of the house I grew up in. We moved like a mile away. My dad drove this car, is a 1999 Ford Expedition, and my dad was just an entrepreneur, really. Started a bunch of it. He'll tell you later today, so I don't want to ruin his thunder, but started a bunch of cool businesses and stuff, but it was up and down, etc. And I was very ambitious. I got into college and I was like, I want to be an entrepreneur. I want to like do business because that's where people make money. So I was super ambitious. I got into college. I started 6 different businesses. I'm gonna come down here, look at you guys for a sec. 6 different businesses my first years of college. So I started a landscaping company, a Chinese tutoring company. I started a real estate— I might rent real estate, but I wholesaled actually 2 houses. in college. I made $5,000 apiece. It was pretty cool. Assignment fees, etc., the whole thing. We did a forex trading business. I did online marketing with Mason, and we did essential oils. Any essential oil people in here? We were selling them online.
DoTERRA.
DoTERRA. Did all, I mean, any business on YouTube. What's up? Any business on YouTube, we tried it. Okay? And finally, my dad looks at me like this. He's like, Bridger, I love your effort. I love your drive, but you're kind of like a chicken with your head cut off a little bit. And he goes, I think we can help you out a little bit. He goes, I want you to go meet with one of my business partners. This guy can really help you out. I said, okay, I'll go meet with whoever, right? Like, cool, I'm just a young hustling entrepreneur. I'll go meet with whoever is out there. So we set up this meeting and we go out and, oh, let me go back one. I meet with this guy. So I go up, it's my dad's business partner. I drive to his house and I pull up to this gorgeous, beautiful mansion. I'm like, man, who's my dad's business partner? This guy's pretty intense. And I walk and I go knock on this big door and he comes to the door and he— sorry, the camera guys are all freaking out at me because I'm walking through here. They're all getting mad at me. There you go. I go knock on this big door and he comes to the door and thankfully, I was worried like a butler was going to come and like, begone peasant, get out of here. This massive house. And he comes and he goes, Bridger, come in. And I walk in this gorgeous mansion. It's got white couches in the ceiling and the wine cellar and the basketball court in the basement and pool and just everything, cars in the garage. And I was super— I was like, wow, this guy's pretty legit. And so we sit down, we start to chat, and finally I ask him, how did you get all of this? How'd you do this? And he goes, Bridger, what's funny enough, a lot of people don't ask me that question. And I was like, oh shoot, that's the only question I had. Sorry, I don't have any other questions. I had one question, it was how do you do this? And he said, no, Bridger, you're fine. But he goes, it's funny, not a lot of people ask me that question because I'll tell you, he goes, when I was in my 20s, I was a lot like you. I started a bunch of business. I had kind of some success. But then he goes, then I figured out the secrets of the wealthy. He goes, the wealthy families of the world, they get their kids into college. Sometimes they cheat. We've seen that, right? They cheat to get their kids into college, but they go get into college. They want their kids to work in Wall Street and either way up and they want them to work in the fund space, private equity, hedge funds, venture capital, real estate funds, or come back home and run the family office. And I was like, wow. And he goes, that's— so he goes, I met the guy that ran a private equity fund. He's one of the wealthiest people I'd ever met. And he goes, I decided I was going to be that. I was going to start a fund. And so he goes, that's what we did. We started a real estate fund. And at the time, he goes, we're managing— I'll come back here to the stage so you guys can see me. He goes, we're managing $8 billion of real estate at the time. Just, I was like, wow, that's a lot. To put that in perspective, you guys know Grant Cardone? Anybody know Grant Cardone? Cardone Capital, actually Ryan Secco is going to be speaking in just a little bit, which is pretty cool. He's coming from Cardone Capital. It's awesome. Um, Cardone Capital today, I think is about $4 billion. So at the time they were 2 times bigger than Cardone Capital, which is pretty impressive. That was years ago. I think today they're over 10 times bigger than Cardone Capital, over $40 billion. So 10x Uncle G. What's up, Uncle G? This is pretty crazy, okay? And I love Grant and all this stuff, but it's just wild how big they're doing real estate funds. I was just totally enthralled. And I said, hey, can you be my mentor? I want you to coach me. Can you mentor me, etc.? And he goes, Bridger, go talk to your dad. Your dad knows way more about this than I do. I said, no, no, my dad's— he drives a crappy car. We live in a small house. I want to learn from you. Like, you know, and he goes, Bridger, sorry to break it to you, but me and your dad make about the same amount of money. And my chin dropped to the floor. I was like, huh? Come again? And I left the dude's house. I went straight to my dad's. My dad's right here. I was like, Dad, what the heck? Like, why haven't I been able to order a soda at Chipotle for the past 10 years? Because it's too expensive. Like, what is this? What's going on? And it wasn't that dramatic, but I like to make it dramatic.
dramatic.
He goes, Bridger, no. Yeah, he goes, we're doing pretty well. He goes, I like to save and invest my money. My partner kind of likes to spend his money, but yeah, we run these big funds. And long story short, every Sunday night I'd go to my dad's house and we'd sit down and we'd go on the whiteboard. He'd teach me about funds. We taught me about limited partnerships, general partners, how to launch a fund, et cetera. And I finally got to the point where I wanted to launch a fund. And so I was like, I'm going to do this. And it's funny, a funny thing in life, when you start to learn about something, you start to recognize that thing In your life, you know what I mean? You ever done that? You ever bought a new car before? All of a sudden you start seeing that car driving around everywhere, right? So I thought, man, I'm gonna do a fund and I want to do this. So I was in college. I was working an internship at the time and a job and in college, and I was at the job I was working at. I saw an opportunity where we could start a fund for that company. They actually needed financing for some of their clients. It's a debt fund. I'm like, hey, we could finance them. We could do a little debt, like a little loan program, etc., for them. Would that work? And the owners of the business loved it. I went to my dad. We sat down. We mapped the whole thing out. I was like, could this work? You know, and so we put us all together. We're so excited. We got our little fund framed out. Here's Michael Scott. We were really excited. It's me and my dad framing everything out. This is going to work. You know, and I hit this wall. It's like crap. Now I got to raise money. Like shoot. But then I thought, aha. My dad, super rich apparently. I'll just go pitch my dad. It'd be awesome, right? And so I was like, easy, easy money. Let's go. So I went and talked to my dad and sat down with him. I went to his little— he went to his office. I remember Sunday night and I said, Dad, how would you like to be our first investor into our fund? Had my little pitch and everything. He actually helped me a ton. He'd helped me a lot of my fund. It was awesome. He was a great mentor, great coach. And I said, Dad, how do you want to— you want to be our first investor in this fund? And my dad said, your first investor is your hardest investor to find. If I invest in your fund, it would ruin the experience of you raising money on your own. This would be a crutch that you'll never be able to recover from. He said, no, I'm not going to put money in. And it was a big tough love moment for me. I was like, okay. He said, you got to go learn how to raise money on your own and do this on your own. So I left his little home office with my tail between my legs a little bit and walked out. And I said, you know, I'm going to do this. And we went out, I hit the streets, I talked to everybody I knew, former bosses, college professors, friends from high school. I mean, like everybody. And after weeks of pitching, we raised a whopping $49,700 from like 6 different investors, which by the way was a lot for me. I know it's not a lot for you guys, but it was a lot for me at the time. You can clap that up. That was pretty good. We thought it was pretty good. And good enough, it was actually enough to get started. That was like enough we needed. We were doing these small microloans. They were like $2,000 to $3,000 a loan, short-term. They were like a month. Our first group of investors, we got them a 64% return on their money. Okay, so good return, small amount of money though, but good return percentage, right? And they were super happy. We then launched our second fund. We raised and deployed millions of dollars in that second fund. We ran that for, I think, 3 and a half years. And then a year and a half ago, I actually had a competitor come in and buy our whole fund. We exited our entire fund, which is awesome. And by the way, in just a minute, we have Eddie Wilson coming out. He's going to talk about buying and selling funds. He's bought and sold hundreds of millions of dollars in funds, which can be— I'm just so excited to hear him speak. We did that, which is pretty cool. Then since then, we launched our third fund, which is Ugly Unicorn. Which we've done very well. And then that second fund, we did 200+ deals in there, deployed millions of dollars, pretty awesome. And today, actually, this is our performance from Ugly Unicorn as of our last reporting date, which is pretty cool. Net rate of return of 14.71%, and then year-to-date, 39.61% on our Ugly Unicorn fund. Keep clapping for that. It's been pretty cool. We managed about $13 million in that fund. We just started it. We're growing like crazy. It's really fun. So it's been a blast to be in this space. And we'll talk about that in just a few minutes. But I've been able to spend amazing time with my family. I've loved this game and being in business. And by the way, update on me, a few things. I actually went, I don't know if you guys saw a post, I actually went and rang the NASDAQ bell a few weeks ago, which was pretty cool. So I got invited out. It wasn't my company, just disclaimer. It was another group. They just invited me out to be a guest there, but it was pretty cool. So this is us at the NASDAQ in New York Stock Exchange, which is kind of cool. This is the only picture that I got back from the ringing of the bell. And if you zoom in, that's me. My mouth is open. Why do you— I get if you blink, I understand that. But who, when you're taking a picture, goes like this? But that's the picture I have. So there you go. That's my picture at the NASDAQ, which is pretty cool in New York, et cetera. This is my beautiful wife and son. Jonah's now 18 months old. We might have him come out tomorrow and so you guys can say hi to Jonah. He's amazing. This is our beautiful family, etc. And then we've been able to donate to charities we love. We have this amazing life. We've been able to travel and have this all sorts of stuff because I learned this game of funds, because I learned what we're talking about here. And we're still on this journey. I'm playing the long-term game. I'm going to play the 30, 40-year game. I don't want to get rich quick. I want to get rich in the long term and get really rich in the long term. If you're with me, give me an amen to that. Okay. So, this next segment I want to dive into. You guys still with me? Is everyone okay? You got energy good? Okay. I want to go quick through here, but I want to talk about launching a fund and actually the process of doing it. And again, you guys came to Fund Launch Live. Just so you're aware, I go to a lot of conferences and events and they pump you up and they— which is cool, but like, give me some juice. Give me some meat. You know what I mean? Give me something I can use. So, all the speakers actually, I've asked them to give you golden nuggets, etc. I want to dive into that. Does that sound good? There's gonna be some pumping up and stuff like that, but we'll we'll dive in. Okay, so we're gonna dive in. So if you've been struggling on this game and this process, this is probably why. A lot of us are are well right here. It's not. I just want to let you know it's not your fault. You haven't had the right vehicle, or maybe you have the right vehicle, but fund you don't have the right training to operate that vehicle. Okay, so I'm gonna walk through the training of how to launch this. So I want to talk about a new way, a better way to launch funds. We call this the Fund Launch Formula. It's a framework we've built out to launching funds. We've helped— I've had an incredible amount of amazing people sit down across me and I've been able to interview them on my show, $100 million, billion-dollar fund managers. And what's interesting, I started to interview them on how they launched their fund and all of them had a very similar story. They used the same process. And I was like, huh, this is interesting. I interviewed another guy, kind of asked him questions on this process and it was the same process. I was like, this is interesting. So we finally coined the phrase. Let's just call it the fund launch formula. If you go Google how to launch a fund, it's terrible advice. It's terrible advice. And it's from some blog writer that had to write a blog that for their quota on funds, and they went and Googled some stuff and it's completely terrible information. So finally said, we got to rewrite how to launch funds, how entrepreneurs, how Wall Street rebels launch funds. Okay. So this is a 4-step process to launch a fund. We're going to dive in. Yeah. Sound good? If you're with me, say yes.
Yes.
Okay. Let's dive in. So, what we used to have to do, what a blog writer will tell you, is go hire a lawyer. If you want to launch your fund, go hire a lawyer, pay $30,000 to $50,000 for a lawyer, then go pitch investors, then hopefully raise money. And if no one likes it, go back to the drawing board and start over. And you're out $50,000 and good luck. A lot of funds, most funds never launch, by the way. Most funds never launch. Because they do this. They spend $50,000 and then you're already out $50,000 on docs and you got to re-spend another $50,000 and you're like, I don't want to do this anymore. And most funds never actually launch because they go this old, dumb, stupid way that blog writers put on Instagram or whatever. Okay? So, this is the way we beat out the Harvard grads, people on Wall Street, etc. Now, myself, back to my dad, I was like, well, Dad, no one's going to invest in me. No one. I'm too— I don't have a track record. No one's going to believe me. I'm too young. I'm inexperienced, etc. Like, who's going to invest in me? And my dad gave me this great example. He said, Bridger, I want you to imagine right now we found this Lamborghini Aventador in Billings, Montana. Okay. This car is about a $300,000 car. All right. I think I put on here. We'll put a little bit lower. Yeah. $300,000 car. And this person selling this is going in, they're, they're going into bankruptcy, et cetera. They just need money like this. They need money by Saturday and they're willing to sell the car for $50,000. Now just go with me as an example.
Okay.
Okay? They're willing to sell the car for $50,000 cash Saturday morning, and you could turn around on Monday and sell it for $300,000. Okay? Sound good?
Yeah.
You guys getting the scenario? He goes, Bridger, imagine we have this deal. You got a phone call right now and it's verified. We've had people look at it. It's all checked out. All you need to do is come up with $50 grand by Saturday. Could you do it? You can't use any of your own money. Could you find $50,000 by Saturday morning. In this room, who feels like they could find $50,000 by Saturday morning? It's all checked out. It's a deal.
Okay.
And I was sitting there. I was like, you know what? I don't have any experience, but I have a pretty good deal. I would stay up late. I'd call whoever. I would knock on doors. I'm going to make $250,000 this weekend in college? Dang straight, I'm finding $50 grand. Like, I'll run through a brick wall for a quarter million dollars. And maybe we'll split it 50/50. Maybe I'll make $100 grand. Cool. $100 grand in a weekend? Like, I'm in. I'll call. I'll knock doors. I'll go find— I'm going to grandma's house. I'm going to your— my neighbor's grandma's house. I don't care who it is. I'm going to talk to them.
Yeah?
You're with me. Say yes. Okay? And I was like, you know what? I bet I could find it. He goes, Bridger, what about $100 grand? Could you find $100,000? I was like, yeah, I think I can do it. And he goes, huh, that's interesting. 3 minutes ago, you were telling me you're too young. You're inexperienced. You don't have the track record. And all of a sudden you're telling me you could find $50,000 by Saturday. Huh? And I was like, huh, it's interesting. And he goes, because when you have a deal that's so good, people look past. Now it's still good to have credibility and track record. It's still good to have all that. But when you have a really good deal like this and you just say, hey, look at the deal, even cut me out. Just look at the deal. You find the hole in deal. It's a pretty good deal. You can find a lot of capital. This is how my dad's like, this is how we raised our first fund. We led with deals. So, for example, here's a real estate property, pre-foreclosure. Okay? So, I want to put a different example, not Lamborghinis, but a property. Pre-foreclosure, mortgage is $1,250 a month. This guy is behind on his mortgage. Doesn't want to move out. Doesn't want to go bankrupt. Really doesn't want to go bankrupt just for pride's sake. Okay? So, there's $300,000 of debt on the house. If you rehabbed it, $100,000. ARV, let's just call it $600,000. So, after rehab value, you could sell this property for $600,000 if you put $100,000 into it rehab. Pre-foreclosure offer, let's say we give this guy an offer at $350,000, okay? So, hey, we'll give you— I know you got more equity than that. You could probably— maybe he's got $200,000 equity. Hey, you're not going to go bankrupt. We'll still give you $50,000 of equity after we pay out debt. You want to take this offer? Now, some may say no, but let's just say this guy says yes. There's actually a whole study about 20% of pre-foreclosure people will take a deal like this. 80% won't, but 20% will because they do not want to be foreclosed on. And they actually can even rent the house back from you even once you're done. So, if we did $350,000 plus $100K of rehab minus $600,000, you net $150,000. My real estate people, you guys know deals like this all— you see deals like this all the time. And what do you do when you pitch investors? Hey, I may not have the greatest track. I'm not some Wall Street sharp whatever, but just look at the deal. How do we lose money? If we buy this property for 350, how do we lose money?
Right?
All of a sudden, if you're if you're in this room like I don't have a tracker and I don't have the I don't have the XYZ thing I need. Lead with the deal, and that's my dad taught me. So step one of the Fun Launch Formula is find an amazing deal. If you're with me, say find amazing deal. Okay, that's step number one of the Fun Launch Formula. So lead with a great deal. Now. A lot of people, okay, I'm like, and I'm walking through the 4 steps to launch a fund. Okay, Bridger, I found a great deal. Okay, I want to go there. They always think, okay, I'm going to go to— now I need to do legal. And it's like, hold on, before you do legal, we got a few other steps and processes. Now, a few other examples of great deals. I want to just give you guys more examples, okay? There are many inefficiencies across markets that money and strategy can solve. Okay, I'll say it one more time. There's many inefficiencies in markets that money and strategy can can solve. So, for example, venture capital. What's a market inefficiency that you're solving with venture capital? There are startup founders that have a great idea, a minimal viable product, and they need capital to hire and grow and get that product to market. Ta-da! A venture capital fund can come in and fill that market inefficiency, and you have a great deal. Does that kind of make sense?
Yeah.
Another example, private money lending. Anybody do private money lending, hard money lending, etc.? My dad's actually first fund was private money. I think he'll probably talk about it tonight a little bit. Overleveraged, someone typically, and right now in today's market, we're seeing this more and more. You need money to float for the next, let's call it 6 months. Okay? You take collateral, real estate on the loan, so you collateralize the loan. Let's say you have a house, it's $1 million. Hey, I'll give you a loan of $500,000. If you don't pay back, I'll take the house. It's $1 million. So, it's a win-win. Either they pay me back $500,000 plus my interest payment, Or they don't pay me back and I get the million-dollar house. Right? Win-win. Does that kind of make sense? If you're with me, say yes. Okay. Real estate construction. Again, inefficiencies in market. What they're essentially solving is there's a housing shortage. Certain people in the area want a lot of jobs and you build more units in that area to fill a market inefficiency that capital can solve. Does that kind of make sense? Clothing brands. Anybody run a clothing brand in here? I have a bunch of friends that run major clothing brands. They keep having this chicken and the egg problem. Problem. They need sales to buy inventory and they need inventory to buy sales. There's inefficiency there and they try to get bigger. And I have a friend who runs, I think it's $15 million a year. And he's like, we're still having this problem. We need more money to buy inventory, to get more sales, to get more inventory, to get more sales. And there's just this circle. So what you can do is come do inventory financing. It fills a gap in that market. Does that kind of make sense? You fill these inventory. We have people on Black Card buying shipping containers, moving them around the world. It's pretty cool. Okay. This is the concept of arbitrage. Okay. So the definition of, if you've heard of arbitrage, the definition of arbitrage is buying one thing in one market and selling it for a different price in a different market. It's the only definition of arbitrage. Most of us make a lot of money off of arbitrage in a lot of ways. So for instance, water in the middle of the desert. How much would you pay for water in the middle of the desert? $10, $20, $50?
$10.
How much is water worth in Costco? Maybe $1, $2. So, if you can take water from one market, Costco, it's $1, and take it to a different market, like the middle of the desert or an airplane, you can sell it for a different price and you have an arbitrage between those 2 prices. Does that make sense? Definition of arbitrage. So, a great example, my traders in the group, Long-Term Capital Management. It's a big fund on Wall Street in the '90s. They did this. Their whole strategy was around They found an arbitrage play between the 29.75-year Treasury and the 30-year Treasury. They found that the 30-year Treasury was overbought because it was, everyone knows the 30-year. Very few people know the 29.75-year. Who's heard of that? Right? So what they did, this is before, kind of pre all the new systems and stuff. They found that the 30-year Treasury was overbought and the 29.75-year was underbought. And all they did was just play that little arbitrage. There's other groups that have done this with Bitcoin. They sell it in some countries versus other countries. There are different prices between exchanges. One exchange says the price of Bitcoin is this. Other exchanges say the price of Bitcoin is this. What they do is just buy it on one exchange and sell it on another exchange. Does that kind of make sense? Arbitrage play. This actually happens in funds today is arbitrage play. Is that kind of making sense? If you're with me, say yes.
Yes.
All right. Another one is economies of scale. We talked about this earlier. Economies of scale are Many products right here, many companies would be successful at economy scale, but don't have capital to hit that point. To produce one iPhone costs, let's just call it $400 million to produce one iPhone, to get the tech and the engineers and everything. How much does it cost to produce the second iPhone on average? Maybe $200 million. And the third iPhone, it's like $100 million apiece. And the fifth iPhone, it's like $30 million apiece. And then it gets all, once you produce a million iPhones, the average cost to produce each iPhone is maybe $500. It's called economies of scale, right? To produce the first one's very expensive, but as you copy and paste that model, you can have what they call economies of scale. There are many companies out there waiting and hoping for someone in this room to start a fund to help get them to economies of scale. Does that kind of make sense? They need that capital injection to get there. This is what we call asymmetrical risk for your fund. So you're trying to find asymmetrical risk. Asymmetrical risk means, we've all heard high risk, high reward, right? Asymmetrical risk or low risk, low reward. Asymmetrical risk means low risk with relatively high reward. That's that gap is called asymmetrical risk. That's what we thrive on. Sound good? So that's number 1, find amazing deal. Okay, is that kind of making sense? You guys with me so far? So Bridger, okay, I'm ready for legal. Okay, I want to do legal docs. Hold on, that's number 4. Once you have this great idea for your fund, again, 4-step formula for fund launch, go out and frame the deal. We'll talk about this more tonight, but you go frame the deal, the pref, the catch-up carry, just how the whole deal is put together, how you investors get paid back, structure offering deal, etc. Then before you go do all this other stuff, go and raise capital. So number 3, go actually and pitch investors. Go actually start floating this around investors. See if they're interested in this potential deal. Again, before you spend all the money. So now, how am I going to raise money without legal docs? Bridger, go and soft float this to investors. Go find mentors, people in your life. Hey, would you invest in this deal? If we actually paid for legal docs, did everything, would you actually invest in this? What you do is you build what I call soft commitments or verbal commitments into a deal before you go build it.
Okay.
With the legal docs now, but Bridger, who's going to give me the money? I love this quote from Warren Buffett. He says, when I was young, I had a lot of ideas and not a lot of money. And now that I'm old, the roles have reversed and I like investing in people with great ideas, but not, but just need money. Uh, take a wild guess. What's the average net worth of a baby boomer right now? Anybody? Shout it out. 2 million. What'd you say?
1.5, etc.
I was actually spot on. The average net worth is 1.175. Isn't that kind of crazy? I did not expect that when I looked this up. The average baby, the average, not like the high end, whatever, the average, the middle is 1.175. There are a lot of baby boomers or people that are older generation right here. $84 trillion they control, and a lot of them are just like Warren Buffett. I want to invest into people and younger people that have ideas, funds, etc. They can just put my capital to work. Okay, so next time you see a boomer, be nice. Okay. All right. Be nice to them because they've got a lot of money they're going to send your way. All right. So again, get soft commitments from investors and then and only then go and finish your legal docs. Help you hire my brother, come out and he can do all the legal docs or firms like his to come and do our docs. Huge 100-page documents. Typically, just so you're aware, they're about— anyways, this is just from websites— $50,000 to maybe even $300,000 per doc. Now you can reimburse those though back from your fund. Okay, um, so that is— that was a pretty quick version, but the best way to launch a fund is through the Fund Launch Formula. Does that kind of make sense? 4 steps. Is that pretty good? You clap it up for the Fund Launch Formula. Not bad. Now Bridger, I'm just gonna say this. I'm not supposed enough to do this. We're not, you know, might be feeling, I'm not smart enough. I can't do this. This is too complex. Again, if these 3 individuals can do what they do, we can do everything. Yeah. Can I get an amen?
Amen.
All right. So, I want to emphasize this and then we'll wrap up. We got our next speaker coming on. It's not the how, it's the who. So, I know there's a lot of people in here, man, I don't know how to flip a house. I don't know how to trade. I don't know how to do a fund, etc. That's okay. Very few funds, almost zero funds are run by one person. There's actually 3 distinct categories of people in a fund. You have your expert investor, your fund manager, and your money raiser. Expert investor is the person that's maybe really good at, like in my fund, for example, I'm not good at crypto. I don't know anything about crypto. My business partner though is a geek on crypto. He's amazing at crypto. I'm very good at fund management, running a fund, how to build an SEC structure, et cetera. And both of us help raise money together. Does that kind of make sense? So, that's kind of how they mix together. So, at this conference, look around for people that can fit one of these categories. You don't need to be the expert on all of them. Just be really good at one of them. Hey, maybe I'm really good at raising capital. I'm really good at networking, meeting people. I'm really good at maybe trading options. Maybe I'm really good at fund management, etc. And find people you can connect with and partner with. Does that sound good? If you're with me, say yes.
Yes.
Okay. Build those amazing teams. So again, the best way to launch a fund is through the Fund Launch Formula. Now, when I first started going to events, I was skeptical. I'd go to events and I was like, I don't know about the speaker, the stuff on stage, et cetera. And I would always sit in the back and kind of like, you know, whatever, push it away. And I want to invite you for these next 3 days to put your ego aside and go all in and have in the back of your brain, maybe there's a chance That what that person's saying on stage has something to it. Maybe there's a chance someone that someone's saying on stage, maybe they've been through something before that I haven't been through and I can learn from them. So I'm going to ask this group, especially in the finance community, et cetera, we love to be like the skeptic and like, I know better, et cetera. I'm going to ask you to put your egos aside a little bit and buy in and just go with, go with the speaker, whoever's up here. Just like, you know, I'll just go with you. I'm going to take my, I'm going to take notes. I'm just going to go with you for a little bit. Does that sound fair? I love this book. I've read this book. It's called The Go Giver. Short little book. Oh, a bunch of people.
Okay.
This book talks about the concept of being a go giver. Meaning, you know, some people, which is great, they give money at the end of the year. They have a big check. They write like a huge check out to a charity, et cetera. This book talks about the concept of having little, little giveaways your whole life. Being a go, be always ready to give money or share something to other people. Actually, me and my wife started doing this. Really, it was the funnest thing we ever spent our money on. We'd put $50 or $100 bills in our pocket and just always have them on us. So if we were at the grocery store or wherever, and we saw someone that needed their groceries paid for, you just bam, hey, here you go. I got your groceries. No worries. That's a really fun way to spend money. And, uh, it's all from this book. It talks about the concept of go-giving and being always ready to give. And I personally, I, I don't love to give to people that are begging. I mean, I kind of do, but I really love to give to people that are working. Like the cashier working at Smith's. That's my favorite part. Like, you know, people that are like, have kids at home, they're trying to work, like doing all this kind of stuff. Additionally, you don't have to just give money. I'm going to invite you at this conference to give, be a go-giver to the people around you. Give them contacts, your network, your smile, your engagement. Be a go-giver. Be someone that goes out and actively is thinking about how to serve the people around you. What will happen is you're going to find they're going to serve you back 10 times more, and you'll get way more than you ever put in. Get in the habit of— I love this quote— get in the habit of go-giving.
Yeah?
Yeah. I'm going to invite you to get in the habit of go-giving. The reason I love this is because it's by me. It's my quote.
Okay?
Just kidding, but get in the habit of go-giving. All right? So during this conference, during this day, give to the people around you, talk to 'em, meet 'em. Don't go to lunch alone, don't go to dinner alone. Grab someone new, hey, let's go to dinner together, let's go to lunch together. We're gonna give you guys breaks and times to go network. You have plenty of time to network, don't be stressed out about it. We have plenty of stuff planned for you to network and meet people. Be a go-giver. Y'all are amazing, my name's Bridger Pennington. Thank you guys so much. Y'all are amazing, thank you.
More from Bridger
The AI stack is trying to consolidate to a winner take all, do you think it'll stay fractionalized
Before you launch a fund, triple check your fund attorney actually filed everything.
Different view on housing affordability and the fed raising rates not lowering rates