Funds That Won: Big Money in Crypto l Bridger Pennington and Ugly Unicorn

There's blood all over the streets right now. And it's actually, we, that makes us so excited though. Like we are grabbing positions at such discounts.

Welcome to Funds That Won, where we dive into some of the world's most renowned investment funds. We'll interview investment managers across the alternative landscape and learn how they built their million and even billion-dollar asset management empires. We'll explore teams, structures, strategies, and best practices in launching and running alternative investment funds. All right, Bridger, tell us 30 seconds, 1 minute, why people want to listen to you today.

So I am the founder of Fund Launch, co-founder of Fund Launch. We've— we, us together have helped over 55,000 students around the world. We throw big events. It's just fun to be on the show, by the way, with you.

It's so fun.

I actually am the founder of 3 investment funds. I currently have 2 funds previously exited and cycled, which has been awesome. We can talk about those as well. And currently I run a hedge fund that's in the cryptocurrency space. 8-figure fund. We've done pretty well. We've run that for just over a year right now. And so some pretty funds. We have those funds we now—

and then we're—

me and you actually are partners on, I think, 8 funds, looking to be 10 funds here soon. We have multiple student— I think 12 student funds over $100 million, 54 student funds with over $10 million out of our group. So we've helped a ton of fund managers. I'm kind of saying this as we because we love it. Yeah, Lincoln's done a lot of this too. So which is cool. It's fun to be on.

Well, today I want to talk specifically about your current fund. Your crypto fund, right? Like, I'd love to just jump in there and talk about some of these other things. But I mean, why crypto, man? Like, what led you to a crypto fund?

Yeah, it's funny. So, my first 2 funds were debt funds. We were doing lending, which is, by the way, I think is an awesome way to start for anybody that's like getting in. I don't— there's a lot of different funds you can do, like venture capital, you can do a private equity fund, a hedge fund. A debt fund where you're doing maybe hard money loans or short-term loans, in my opinion, is a really good way to start and just get return. It's just easy. It's a lot easier. It's a lot— makes just sense. Like, hey, we're going to give you a loan. If you don't pay us back, we're going to take an asset from you that's worth more than the loan. It's just, it's very collateralized loans. Not that hard to understand. As long as you can ensure that that collateral is actually coming to you, it's pretty much a win-win. Additionally, these are typically short-term. So, a lot of our loans we were doing were 2 months, 3 months. And so, we could get returns very quickly and I could pay back my investors. So, what happened the first 2 or 3 years, these investors that kind of just gave me, giving me a chance, like, Bridger, I'm going to just give you some money. Good luck. I was paying them $2,000, $5,000, $8,000 a month, every month.

Yeah.

And they were like, whoa, this is working. Okay. I'll give you some more. I'll tell my friends. And it built my, this little name for myself as a, at the beginning, syndicate, and then a fund manager that was managing, you know, doing millions of dollars of deals a year and built me this track record over 4 and a half years. And then we had a competitor come and actually buy out our entire fund, which was pretty cool.

Yeah.

So, I did—

Well, let me ask you about that because I love that you brought it up because it really wasn't a lot of money when you were first starting. And a lot of people think that, you know, you have to have hundreds of millions or billions of dollars, which is just utterly false. I mean, how much did you start with?

First fund was $49,700.

Yeah. Like, I mean—

Like nothing. Yeah.

Like literally anyone can put together $50 grand, right? And get started. And I think it It teaches people about, you know, how to be a CIO. So, let me ask you this. Did you ever lose money on that one? Did you ever lose anyone's money?

No. As a conglomerate, we had a couple of loans go bad.

Yeah.

But we were doing lots of loans. Our average loan size was like $3,000. They were short-term, small loans. I think our default rate was about 2%. So, in over 3 to 4 years, we did over 200 to 300 deals.

Yeah.

I think total maybe 5 went bad. But overall, our first fund, we had a 64% return, cash-on-cash return to investors. Next year we got a 62%. We then got a 49% and then a 37%, I believe, cash-on-cash return to investors.

And then you sold it.

And then we had a competitor come and buy us and we sold it. We exited that fund.

Why did you sell it?

A couple of reasons. It was hard to scale. We were managing just about— well, it fluctuated. It was up and down because it was open-ended fund, but it wasn't that big. Like we couldn't— I just knew this would never be a $50 million fund. under a $100 million fund because we were so constrained by deal flow. Now, it made good returns, but it was pretty small. Additionally, I wanted to— I started my first fund at 22. By the time I sold, I was 26, and I wanted to actually cycle a fund. I wanted to have someone come in, buy us out. Actually, I wanted to learn the process of what it's like to sell a fund. And I also wanted to pay back all my investors, all their principal as well. I was paying distributions, but I hadn't paid back their principal because it was an open-end fund. So, to actually fully cycle, hey, I paid you back your principal plus a 62%, 49%, and 37% over 3 years or 3.5 years. This was an awesome full circle. I wanted to have the full life cycle of this fund, if that makes sense.

Yeah.

And because at the same time, we had started this group where we were actually coaching people to launch funds. And I wanted to— personally, I want to go through the learning process of doing And cycling through a full fund.

Do you have a big team on that one or is it pretty small?

About 5 people.

Yeah. And they all stayed and then you left?

I think 2 or 3 stayed. The buying company was a competitor, so they had a team as well.

Oh, okay.

So they didn't need everybody. And then I was fully exited out within, I think, a month or 2.

Yeah. A lot of people don't realize that you can actually sell your fund, right? Your general part— so your general partnership is a business that has revenues, right? And it has this associated enterprise value. So, I mean, was that, was that the plan from the beginning? Or did it just kind of fall upon you? For those that are thinking about selling funds, like, how did that—

For me, it wasn't the plan from the beginning. My plan from the beginning, just so everyone's aware, was— and you're not going to be a billionaire running a $50,000 fund, or at our time we were running, we're doing multiple. I think we did $2 to $4 million of loans over every year. I think it was our turn, something like that. So, I was making a couple hundred thousand dollars a year in college, which was cool. That's sweet. 6-figure income myself. But the biggest reason I did it was for the track record.

Yeah.

For the process, for the systems, for getting investors to trust me with money. And yeah, cool. I made a couple hundred thousand dollars a year in college, which is— that's like— you're like a billionaire in college if you're making a— you know, it's all relative. But anyways, I wanted to have the process and structure because I knew long-term I wanted to do funds and I needed to start somewhere. So that's where I wanted to start.

I love that. Well, and what I know about you is you then you basically tried several different, you know, strategies, investment strategies after that, and then ultimately landed on your now crypto fund.

Yes.

So I mean, talk us through that kind of phase in between where you were exploring different, you know, investment strategies until you found one you liked.

Yeah, this is, um, I actually gave a speech on this at Fund Launch Live in front of 2,000 people to show them Hey, I had already done 2 funds. I then, we actually had an idea where we're going to do a secondary fund. So this great awesome, and I followed what we teach is the Fund Launch Formula. So I found this great deal. It was a secondary fund, we could buy a position, it was in a bigger, huge real estate fund. It was about a $40 million position. This investor needed liquidity, they wanted out in the next 60 days, they were willing to sell their position for $34 million. So it was about a $6 million spread, just face value. And then this fund was already 3.5 years into the fund. So which typically in a closed-end real estate fund, year 6, 7, and 8 are the most fruitful of those years. So we would— we were posting maybe this position would be worth, you know, a $48 to $50 million position. But at the time it was marked at the $40 million position. So anyways, we were trying to put money together. We tried to put all this together right during COVID So they needed liquidity bad. Anyways, during that, there was 60 days. We had this tight window. We were getting money together and we didn't get the money in time. Someone else had already gotten money and beat us to that deal. And then we thought maybe we could do this in a bigger sense. We could go find— be a secondary fund and go take out secondary positions. We actually interviewed a bunch of fund managers, by the way, really cool model.

Oh yeah.

Oh, secondary is awesome. Secondary is— I talked to a fund manager just here locally. They managed about $30 to $40 million on their second fund. Their average IRR was over 100%.

Well, you're buying things at such discount, right? And like just right off the bat, plus appreciation. So it's a really Yeah.

And their model, they would go to venture-backed companies. So, they'd go to a company that just raised their Series A. There's a marketing manager that's got $1 million of stock options and maybe doesn't want to exercise them or just wants liquidity. And they'd come in and say, hey, you got $1 million of stock here. We'll offer you $700,000 today cash if you just give us your position. And often, more often than not, they'd find people in companies that want some liquidity in their positions. So, they would buy these into these companies at a discount, not into a fund but into a venture-backed company. That was their plan and they were already well over 100% IRRs in their fund, which is pretty cool. So, that was our first idea, ended up not panning out. We didn't have the right team for it. So, I think about funds. I'm pretty good at like managing a fund as a fund manager, compliance, the extra structure, working with the SEC, all the operations. I'm pretty good at that. I would call myself a pretty average investor. I don't, I don't claim to be an above average, crazy smart investor in any category. What I like to do is partner with people who are very good at experts in their field. That's what I like to call them.

So you like to partner with the CIO? Yes.

I love to partner with a CIO that's, that sits in their basement and trades options 12 hours a day or understands crypto or real estate, whatever. And I just do that because I understand my age and experience. And I just, I thought, hey, if I can get really good at being a fund manager and understanding mechanics of funds, I can do very well. And also I'm a pretty good capital raiser as well. So If I can bring capital and fund management to the table, I'd love to partner with operators. So, we then explored an idea with a different—

When you say we, is it just, it's really just you and prospective partners?

Exactly. Yeah. More like me. I explored, I was exploring this with different prospective partners. So, then we had another person that came to us that was like, hey, we're going to buy up, this is during COVID big box stores. Retail's dying. We got these big box stores. Let's go buy them up. Let's turn them into a couple of different things. It could be office space. It could be self-storage. They could be a bunch of different things that you could do with these big box, just empty boxes that are gonna sell for cheap.

Yeah.

So, we thought, hey, it's a cool idea. We then started to explore this management team. So, and then this is me testing out and kind of dating these managers over about 4 to 5 months. We went and tried to, I was like, hey, I need a process. Let's underwrite a deal right now. Let's go through the process. And I made them build me a pro forma. How would you approach this deal? And after 4 to 5 months, it was, Apparently, at least the people I was working with, they had some ideas, but they weren't as competent as I would like to see for— if we're going to build a $100 million fund, we needed someone or other people that were more competent around that sector of the business.

So, you killed it.

So, I kind of just said, hey, I don't— if I'm going to raise money and I'm going to put all my horses behind the thing, it's got to be— it's got to be lights out amazing.

Yeah.

I don't want to just kind of, oh yeah, we hope it works out. We got to be lights out as a team. And it just The guys I talked to, they just wasn't the right team. So, then I, then back to, I went back like, okay, what are other things and what are businesses that I want to get into? So, I was, again, I was shopping all these kind of together and there's other deals. But then I found a partner, Dan Young, who I ended up partnering with, who is incredible in crypto. So, he has been doing, he had the largest mining facility in Utah in 2014, had a full warehouse. So, think about 2014.

Mining.

Mining Bitcoins, Dogecoins. Actually, Dogecoins was his biggest thing he bought.

Wow.

Now, at the time, he didn't know the value. He actually would just transfer them straight to Bitcoins or whatever. If he would've kept Dogecoins, he'd probably be a, you know, deca-billionaire at this point. But so, he's been doing crypto for a long period of time independently himself with his other companies. Inc. 500 winner, has done over $600 million in sales, has sat on the board of Intel for 15 years, very qualified individual, and loves crypto and trades and does very well in crypto. And he's got a ton of billionaire friends and clients that actually are trying to give him money in crypto. Please just manage it for us. And he always just told them, no, I don't want to do it. I don't want to manage. I'll just do it myself. Or I'll just, I'll hop on a Zoom call, teach you how to do it, but I'm just gonna do it myself. And then finally, we came together and he said, you know, could we do a fund around this? And I personally said, I really believe in blockchain. I think it's inevitable. I think it's the future. I think, and if you look at the stats, we can dive more into it. I believe 18 countries have announced a central bank digital currency.

Yeah.

They are moving there. China already has a central bank digital currency. 36 countries are in development of a central bank digital currency, including the United States, by the way. We can talk all about that and what they're doing. They just— the New York Fed just did a 12-week test with a digital dollar. They're launching the FedNow protocol right now. There's a bunch of stuff going on in crypto. And so, I thought, man, this is an emerging space I want to be in. Dan, he was like, dude, I'd love to do a fund. I just don't know how a fund works. I don't even know the first thing about it. I said, Hey, I gotcha. I'll figure out the fund. So, we ended up— it ended up being a great partnership. So, I built out all the fund mechanics, all the legal, all the structure, all the audits, the third-party administrators, the compliance. I worked with Dan to raise money together. We had both raised money together and we launched that fund just over a year ago. We raised $10 million in our initial launch. It's an open-ended fund. So, we're still raising money. We're a 506, by the way. So, we can actually— I can publicly talk about this on a podcast just for people who are wondering. Oh, wow.

Yeah.

And it's been phenomenal. So, sorry, I'll stop there if you had other questions. That's kind of how we started.

Well, that's great. Let me ask a little bit about this actual partnership intricacy. So, did you actually pitch Dan on the fund or did he come to you and say, hey, we should do this? And, you know, how did you guys actually determine that? Because you both have other businesses and you have other, you know, commitments. Like, I think that's a piece of the equation that a lot of people have a hard time with. when they're first getting their fund off the ground. So like, how did that come together?

Yeah, that's a good point. Yeah, me and Dan are both, he's a high-powered entrepreneur. He's doing lots of revenue and we have FundLaunch, we're growing like crazy and other stuff. And so, I don't remember how exactly the conversation, but we both mutually came together and just, we were like, dude, a fund on this would be amazing. And I was like, Dan, we, I think, no, I don't know anybody else in the space that's as qualified as you that's running a crypto fund. Yeah, there's some scammer people out there like, yeah, we're gonna fund, but no one's like done this for a decade. And also Dan's, you know, got some gray hairs. He's ran a business and I've I bring a lot of experience from the fund space. I don't know anybody that does this.

Yeah.

I was like, Dan, I think we could, I think we could run a billion-dollar fund here in the next 5 years doing this. So, we mutually came together. I said, Dan, if we're going to do this, we got to run a test portfolio. So, we went out and we actually set aside money. He ran a test portfolio for about 4 to 6 months. And we, he had a few analysts and other people he was working with that he's like, I want to test them out too on trades and how they're going to do things. And we both mutually said, we don't want to day trade crypto. People, we, I don't personally, I don't know a single day trader that has lasted more than 5 or 6 years.

Yeah.

Most people that literally truly day trade, they almost always blow out their account at one point. And so, we said, we don't want to day trade. We want to get into good positions that potentially yield and have yield farming strategy or a liquidity pool strategy where you're producing yield, you're in good positions that we do a lot of research around. So, we went out and we did a test portfolio for about 4 to 6 months while running these other businesses. And I said, Dan, after that test period, if it goes well, let's go gangbusters and do this. And this is at the, kind of at the, during the last bull run with crypto. So, this is 2021. Is that right?

Mm-hmm.

People are excited about crypto too. So people are begging us. We have potential investors like, we wanna put money in, please. Like, and we're like, hold on, we gotta run our test, but we gotta make sure this works. We gotta make sure it's a really good portfolio.

Getting that track record.

Yep. So we ran that test portfolio, it went well. We actually ended up, you know, a couple of those analysts we didn't end up working out with. We don't, they just weren't as qualified as we thought. We brought in a couple other different people to be a part of the team. We then went through, we built the whole docs. We then started soft raising money and pulling money together. This is into, let's see, 20, Early Q1, Q2 of 2022. Now, if you remember that time period, that is when the market turned.

Yeah.

Crypto fell. I think we had about $36 to $38 million verbally committed to us in about a month, month and a half, just from people we talked to, pitch calls, all that kind of stuff. So, we had a decent amount of capital ready to come in. That month, the S&P fell, well, over the— it was about 3 months. S&P fell about 20%. 15% to 20%. Dow fell a similar amount. NASDAQ fell even more. Crypto fell about 40% in that period. And so, people got beat up.

Wow.

Same time interest rates start rising and we are literally like, okay, launch date is happening. We have like our capital call we're doing. So, we are calling investors and everybody is like—

Right at the bottom.

Yeah. Oh yeah. I mean it is just, it's going down every day. It's getting worse because investors are like, well, yeah, I was in for a million but now, you know, I'm in for $100,000. Yeah, like a tenth of what they and we're like, well, are you sure? You know, well, I got you know I got a real estate thing now. I'm getting squeezed. My business we don't know what to do. And so we said, well, whatever you you know it's an open-ended fund. Just come on in. We'll just we'll we'll knock your socks off. So come on in. So we ended launching our fund June first, 2022. We pulled in over right around ten million. So from 36 to 10, that's a good lesson there right there.

Yeah, from verbal.

When people tell me I have this much soft committed, I've got 20 million soft committed. I go.

Okay.

Well, let's see what it actually turns out to be. A lot of funds I talked to, it's usually about half. For us, it was about a third.

Third.

Just because of how far it fell. Now, after it, about a couple months later, a lot of those people then ended up coming in the fund later. But it was just, it was, and I'll just say that blatantly on a podcast like this, it was, you know, an interesting just launch of a fund. I was calling people trying to get money. Anyways, we got money in June 1st. Literally the next week, crypto falls another 20%.

Wow.

So, it just falls off a cliff.

This is after you called capital?

Yes, we've called capital. Now, thankfully, we were, we were, we did, we kind of saw some things coming. This is right when Luna Terra blew up, which we actually called. We knew it was happening the week before, which is really cool because of Dan. This is, and then this is going through the summer, is very choppy. So, during that period, crypto fell from its peak about 77%.

Wow.

Which is crazy. Now, our whole portfolio, we built it around risk mitigation. Which a lot of investors didn't like actually at the time because crypto was up and it's like, upside, we're going to, you know, it's up and to the right. Let's just go long everything. We said, hey, we need to mitigate risk. We need to watch because it's, guess what? It's the elevator down and it's usually the stairs on the way back up.

Yeah.

And we are at a point where we think the elevator is going to drop. And so, we need to mitigate risk. So, last year we launched our fund, crypto fell 77%, broad market. Our fund fell 17%. Which is really good. We outperformed Bitcoin, Ethereum literally by 30% or 40%, somewhere in that range. Don't quote me on that, but it was pretty good for the end of the year. And then we've rebounded really well. So this year, crypto has come up where I think as of today, we're sitting just over a $30,000 Bitcoin. Our fund is up 25% for the year. We are, and I haven't got the most, but per our last report, we were beating Ethereum by 15%, something like that, and beating Bitcoin by 17%, somewhere in those ranges. Double-digit, um, beating both those exchanges. We're beating the S&P, we're beating the NASDAQ, and, uh, I think we're just like 1% behind the Dow or something like that. And every— we get reports every 15 days, but we've historically been beating all 5 of those indexes since inception, which has been really cool. Yeah.

Well, so I want to dive into this risk mitigation thing. You know, Warren Buffett always says, you know, the number one rule of investment management is just don't lose money, right? The second rule is never break rule number one. Yeah. So, you know, talk us through— I think it's an important element that a lot of people overlook when they're, you know, starting funds is, you know, there's these precautions. So tell us about some of the risk mitigation strategies you use.

Well, and just, yeah, just to do the math, if you lost 50%, you have to get 100% return to break even.

Yeah.

If you lose 20% in your position, you've got to get a 20— it's like a 25.5%, 26% return to break even. A lot of people don't realize that just face value, but that's how it works. And so if you can mitigate these falls and make these falls, especially in a volatile market like crypto, over the long period of time, over a decade, you can perform very, very well. So some of our risk mitigation strategies, we put into buckets and I can draw out a whole pie chart for you. But about half of our portfolio is in a, I would call it a risk mitigated format where we are, we do a lot with liquidity pools. So what these are, if you've ever traded crypto before, just make things simple. Whenever you trade crypto, they typically charge you a gas fee. So you trade a Bitcoin to Ethereum, they charge you what's called a gas fee. It's like It can be a couple hundred bucks sometimes, depending on how much you're trading, or $1,000, depending on how much you're trading. It actually sometimes can be very high. And what that is, is because someone is providing liquidity. You're acting kind of like the Federal Reserve or a central bank where you provide liquidity that I hold Bitcoin and I hold Ethereum. And when you transfer those, I actually facilitate that transaction. And because of that, I earn a fee for doing so. On a decentralized— so on centralized exchanges, Like Coinbase or Crypto.com, they actually keep all those fees. So, you can go to Coinbase and like, right, not anymore actually after the SEC, but you used to be able to go to Coinbase and stake. You could stake a coin and earn like 6% yield.

Yeah.

In reality, Coinbase is making like 25% to 30% on that. They're paying you 6%, but they're making the other, the huge chunk of the margin on those fees. When you go to a decentralized exchange, you can actually make the majority of those fees, if that makes sense. And so we, uh, we can go and stake. So for example, if we hold— let's say there's 2 coins that we like, let's just call them Bitcoin, Ethereum. We like those coins, but also every year we just get the transaction fees by holding those coins on the— and instead of earning 4% on Crypto.com, we're earning 25% or 28% on these fees. And by the way, when there's volatility, those fees spike. So when there's a crazy time like a banking crisis, those fees go from maybe 10% to 80%. Right. If you took an annual APY, so they can jump and spike very hard. Additionally, we have a full strategy. We hold about 40 to 60 coins at any given time. We do a lot of research on the coins we hold, on the positions we hold, on the contracts. Sometimes those contracts can get hacked. You can lose your money. Anyways, there's a lot of research that goes into it.

Do you have 100% deployed at any given time? No.

No. Yeah, we keep one of our buckets, 25% is actually in— that's our lowest yield bucket, is primarily in stablecoins.

Gotcha.

So those stablecoins we hold as, and as a dry powder for us, they'll, they'll yield 2 to 5% a year. So they yield a little bit, kind of like holding a bond. But at any given time, we can use that dry powder to get into new brand new positions that we see coming and we want to be a part of. So we have 25% low yield, we have then have 25%, we call it mid yield, we then have 40%, which is high yield. So that's ecosystem interop that we do. And then we, our last 10% of our portfolio is moonshots. So we actually, we do have a portion of our, of our portfolio to moonshots. That's where we, you know, we now we need to see a docs team, we need to see utility on those coins, and we need to see a clear roadmap. So we do actually a lot of research. They're not just, just crazy dogs on coins. We actually do a lot of research. We want to make sure there's actual real utility in these tokens. And actually, utility, better way to say it is like software. Is there actually a true like software company behind this token?

Yeah.

Is it just something that's made up? Or is it actually like a And we can give you a bunch of examples, but there's some really cool, actually utility-based tokens, and some of them have the potential to truly moonshot. And so with us, if we can mitigate risk, if we can produce a good APY every year, but then we also have some really good moonshot positions over the course of a decade, we're hoping that a handful of those hit and pay back our fund 10 times over while we were producing yield the whole time.

Wow. Awesome. So You're managing about $10 million right now?

It's up. It's up. Well, it depends on the crypto market, right? And then we do distributions and stuff, but it's above $10 million now.

So, well, tell me about that. Do you read this? Do you go back to like an original balance at the end of every year? Do you let the fund compound or—

We do every calendar end of every calendar year. We just distribute. You just do December 31st. We distribute any profits. We do our whole carry and split all at the end of the year.

So it's just going to be your principal, your principal investments at the end of every year. Yeah.

Now investors can reinvest that back in. Yeah, they can add that back in if they want, but they can also take a cash distribution.

Yeah.

We did that. We, uh, there's an, uh, currently there's SEC is deciding on it. Looks like they're— I think they're gonna put it into effect where all hedge funds have to do that. You actually have to distribute profits. Um, some hedge funds run for a decade and never distribute profits to their investors. However, the managers are taking distributions the whole time. They're taking their carry and their management fee. So they're taking carry management fee for 10 years, and their investors, their clients, have never taken actual distribution. And so, I think the SEC is going to make that change where they're actually going to force hedge funds on a schedule. I don't know what the schedule will be. We just, we guessed it would be an annual schedule. And we, and we didn't want to do that as well. We wanted actually our investors to have payouts and distributions.

Yeah.

And it's almost a good marketing expense too. They, they go tell their friends they want to get back in and they can compound their money in.

Yeah.

Yep.

So, give or take 10 right now.

Between 10 and 20. I think I won't give you— because the number changes every day. But between 10 and 20.

Yeah. You know, what's— you know, you said you mentioned earlier that you want to be a billion-dollar fund here in the next, you know, couple of years. Like, what's your, you know, what's your roadmap to get there? Are you going to launch subsequent products that have different trading strategies? Is it just this one fund that you think can take you there? Because I know you've started with accredited investors and, you know, you're going to start going after more family office, larger investor profiles.

Yeah.

I'd love to just hear, you know, how you plan on Scaling your firm over the next 5 years?

Yeah. So it's funny, we go back to— it's funny being in a crypto winter right now. So we had a lot of family offices lined up and during the last kind of crash, they've all just— they said, we think you're great, your team is awesome. Just we are scared of the asset class of crypto in general. Yeah, we have zero crypto exposure. When 2 years ago they, hey, we want 3 to 5% of our family office to be exposed to crypto. Now they're saying we want zero. So, we've got to spend a lot more time saying, hey, you know, this is like buying real estate in 2010. You know, we are at the— like, this is the time. It's still the same roadmap, still all the cool stuff that's going on. We still have a central bank digital currency we believe is coming. We still believe that there are all these— it's inevitable how good this technology is over the long period of time. And we got to— so, we have to help them have a mind shift. So, there's a lot of work—

A lot of educating.

Yes, a lot of educating that's going on. So we actually currently are working with a number of family offices that are, they're just kind of waiting. Their managers are still very nervous that we've had a banking crisis, their portfolios have been beat up the last year. And so they're like, really, is this the right time to make a, you know, a bet into a new asset class that we don't really fully understand yet? So now though, with this last few weeks, they're starting to warm up to this. So just a couple days ago, Citadel, BlackRock, Fidelity, and Schwab all announced they're getting into crypto exchanges. This comes on the heels of the SEC going after Binance, the SEC going after Coinbase. And so that's actually perked up a lot of ears of family offices like, oh, okay, big money starting to get into this. So anyways, it's just, it's funny to try to, you know, and there's some family offices that are very like, we're in, we have a few of those that have already invested with us. And then we have a lot that are like, Hey, we're just we are we have to and we have to sit down with them, and you'd be surprised actually how little they know about crypto. Yeah, and this is a professional family. We're talking to the CEO, the CFO, the full management team, the like these are asset managers, and they don't know the first thing about crypto.

Wow!

Like the first thing, like we have to we we spent an hour was an hour and a half with this one family office. I mean, they had no clue what like what even a blockchain meant. In the most basic sense, we spent 45 minutes just, let's just talk about what this technology is and how it even works. And so, there's a lot of, there's still this big education gap and people right now maybe listen to this about crypto. And now, I'm not just, I'm not a crypto maximalist. Like, just so everyone's aware, I don't, like my whole net worth, I have 10% of my net worth in crypto.

Yeah.

Maybe 11%. I still own a lot of real estate. I invest in a lot of companies. Like, I do a lot of that, but I think I think people should have exposure to this asset class, whatever makes sense for you and your personal portfolio, but not financial advice. But I just think, I don't know, it's a, it's an interesting asset class enough to have some exposure to.

Yeah.

And so, and if you can do that through a risk mitigated process, that's kind of where it's at. So back to your question, roadmap. Um, we are now transitioning to, we are kind of stopping pitching. We're not really pitching accredited investors anymore.

Yeah.

There's a good base, whatever it's built as a good tracker. And a lot of them want to see, hey, we want to see you guys in this game for 3 or 5 years before we invest, which is totally fine. But now we're shifting our full focus to larger, like mid to large family offices and even starting to push to institutions. Now that we have a tracker, we're doing a full audit on our fund. We do an annual audit every year. That's what they want to see. They want to see stuff like that so that we can just show that we're legit. We're, you know, because their red flags are all up just because we say crypto. It's like 10 red flags that go up. So we've got to show, here, here's our audit, here's our all of our compliance stuff, here's our third-party administrators, here's our performance over like, you know, Here's our NAV reports, all the study protocols, right?

You guys take that really seriously.

So which is we're starting now to warm up to bigger check sizes.

Takes time. Takes a lot of people don't realize that, right? When you're, when you're barking up an institutional tree or a big family office, like you're, you're from your first meeting to investment doesn't happen, you know, in a few weeks or even a few months. Sometimes it can be years, right, that they're watching you and following you.

If we were running a real estate fund right now, like we— I think we'd be well over $150 million right now.

Yeah.

Because it's just when you pitch real estate, you have depreciation. It's a lot just— it's a lot easier to sell. They're already sold on the asset class. It's a lot just simpler. You can actually see the asset when you're pitching someone on crypto. Like it's just way different. Yeah, I almost equate like a $10 million crypto fund is worth a $100 million real estate.

I could totally see that.

That's kind of how I think about it, you know?

Yeah. Well, Bridger, what's, what's been the hardest part about running a fund and being a fund manager?

Just in general?

Yeah.

Across the board?

Across the board. It could be raising money, it could be actually managing it, it could be working with investors. It just could be the startup, just the day-to-day of you have a bad trade. You know what? Yeah. What's been the hardest part?

A couple of things come to mind, I guess. I'll just spit them out. I don't know if it's in order. With a hedge fund, there's been— we try to not day trade and stuff, but there's the last year, I mean, we've seen this crazy crypto cycle. So we've seen FTX blow up. We've seen the depegging of USDC, the banking crisis, which affect crypto. Those were the 3 largest crypto banks, right? By the way, that blew up. I know people don't realize that. Silvergate, Signature, and Silicon Valley Bank, they were in charge of, I don't know, 80 to 90% of all crypto in the United States.

Yeah.

We were up late all those nights, like that whole weekend we were working, you know, to try to watch and get news and like, where are we gonna move and thinking through our positions and how we're gonna structure. So there's a lot that happens there, which is kind of fun too. It feels like you're doing a, you know, this running this big fund, which is kind of cool. But those have been some stressful moments, especially last year. FTX blowing up, Luna Terra, Genesis Global. I mean, you can name, there's 20 crypto companies that have like blown up.

Yeah.

I tell people you can't get much worse news about crypto. Like when you talk about like invest when there's blood in the streets.

Yeah.

Like, there's blood all over the streets right now. And it's actually, we, that makes us so excited though. Like, we are grabbing positions at such discounts of really good technology, really good utility. So anyways, and obviously, I'm optimistic. We're generally long on crypto.

Yeah.

Most of the time. And, but it's, we're pretty excited. So that would be the first thing. Investors, actually, we have great investors. We've worked, some people have really a lot of problems with investors. Our investors have been great. They've been awesome to work with. We've had a lot of great time with our investors. That might change in the future, but investors have been great. Compliance. So far, always compliance is always just not the funnest thing to do to make sure everything ducks are in a row and stuff. That's just part of the job though. Anyways, I'll leave it at that.

Yeah. Well, I want to revisit, you know, as you were talking, just do you plan on launching subsequent products that have different strategies or is it just the one that you're running with?

So we, we believe this will be our flagship product because it's, it's this product we built is built for family offices and institutions. It's risk mitigated. It takes all the old school investing principles and just plugs them into crypto. So, we believe this will be our flagship product. We might launch a— or transition to a 3 fund where we can take 1999 investors and take qualified purchasers.

All through the same vehicle though.

Yeah, but the same core strategy. We've discussed launching an ETF fund. ETFs currently are dead but still have, I think, a lot of utility behind them. So, a full ETF fund. We've also looked at launching a full— we call it like a moonshot So for people that just love adrenaline and just want crazy, you know, highs and lows. So we take that 10% of our portfolio, and that would be 100% moonshot fund. We've actually looked at doing those subsequent, subsequent products in the coming years.

And is that opportunities that you've seen as a manager, like an opportunity in the marketplace? Or are these investors that are asking for these types of products?

It's been both. Both?

Yep. Cool.

So we've had, yeah, we've had a lot of people ask about when NFTs were really hot, can we please get this? And actually, Our team has done very well in NFTs just individually.

Yeah.

So trading and buying, and there's a lot that you can do within the NFT space. And then the moonshot product, we have some people that just want straight adrenaline. They're just like, dude, I just treat this like casino money. Just throw it in. Like, I either want to be a billionaire, I want to have zero money at the end. And so, and we're like, hey, our fund really isn't built for that. Like, we're built to preserve capital and grow it over a long period of time. And so it's been a, it's been a mix of both. The Moonshot Fund has been more from investors asking for just more adrenaline. So we may or may not do that one, but we'll see.

Cool. Well, I want to ask you, you know, to other emerging managers, prospective fund managers out there, or current fund managers, you know, like, you know, just want to give you some time here to like, what advice would you have for these individuals that are looking into being a fund manager?

I think You got to play business as an infinite game. Signing Cynic put this great thing out about finite games versus infinite games. A lot of us try to make finite games. We try to play life like sports. There's a, you know, you have a time clock, you have a winner and loser, and we try to make things that are infinite into finite. Like, you don't win at marriage. That's an infinite game. The goal of marriage is to continue to be married and be happier and happier. We never like win at marriage. The same thing's true with business. And I think running a fund, you never really win at running a fund. Yeah, you can set timestamps like this year to this time, but the goal of running a fund or running a business is to play the infinite game, is to stay in business.

Yeah.

And to keep growing that business over a long period of time. I think a lot of people get into business with a finite mindset when they're really playing an infinite game. And by the way, the infinite game mindset always trumps and beats the finite mindset. For example, United States went to war with Vietnam. They came in with a finite game. We're going to come, we're going to kick out communism, we're going to win. And the Vietnamese or the local people had an infinite game mindset. Same thing's true with Afghanistan. This is our homeland. We will fight forever. And what happens typically is the infinite mindset typically ends up kicking out and winning the finite mindset. That happened in Vietnam. It kind of happened in Afghanistan. 20 years we spent there and we said, hey, we just, We can't keep doing this. And they are there. This is our homeland. This is where we live. We will keep doing this forever. And the infinite mindset always beats the finite mindset. So, back to the question about running a fund, having an infinite mindset. Currently, I'm 28 years old. My mindset, even with my first 2 funds, was I want to just, I want to be in this game.

Mm-hmm.

And I want to be in this game forever. And so, I need to do, treat investors right. I need to be honest. I need to make sure things are done properly with compliance. Like I need to make sure I'm straight with the SEC. Like everything's mapped out the right way. And even if that costs us a few dollars upfront or whatever, like I'm playing the infinite game. I'm way more interested in with an investor coming in about giving them a good experience and good performance with our fund. Because I know if I do good to them today, that will produce 5 or 10 or 20 times the capital in the future. You look at these great fund managers that are today, a Ray Dalio, a Warren Buffett, A Jim Rogers that we had at our event. Almost all, actually all 3 of those started their first fund in their 20s. Their mid to late 20s was their first fund was launched. And they played the infinite game. And now, you know, they're older in their 70s, 80s, 90s. And we talk about them like crazy. It was 60, 70 years ago, they started this game and they started with $100,000. They started with $50,000 and they played the infinite game with markets, with their fund there. Their fund didn't blow up. It didn't go bankrupt. They just kept playing the infinite game. And today, wow, I can't believe Warren Buffett or Ray Dalio or all these big names. They've been playing this game since they were 26 years old, and they had a fund actually. It wasn't just they were kind of trading; they had a fund when they were 26 years old, 27, 28 years old. So my advice to any person in the that's aspiring to be in this game, whatever I would say: get in the game and play the infinite game. It doesn't matter if it's small today. You're not playing for today's money. You're playing. I you know I'm playing the get rich. Long game, not get-rich-quick game, but I want to get rich and get really rich over the long period of time. And funds are an incredible vehicle to do that. You're in the right vehicle and you're at the spot. And if you can find a great management team, a great process and system, and you can be compliant and follow the SEC and just treat investors the right way, that will pay compounding dividends over the course of your life.

Love it. Amazing. Thank you. Just a couple of rapid-fire questions here to wrap up. You know, any, any habits you feel like that have contributed to your success?

I am an active proponent of morning routines and just routines in general. And I change my routines all the time to try to optimize and find what works best for my energy and my life and my health. Your brain and how you show up to work every day is, I think, the biggest metric of being successful or not. If you're full, if you're full out and have energy and focus, you can accomplish anything in this life. The contrary, if you're depressed, if you're sad, if you're kind of tired, typically nothing really gets done. And so, if you can train the internal— your body's an incredible thing. It has internal energy. It has other stuff. If you can train your body to access that kind of stuff, you can do really well. So, a couple of things I've tried out. I've tried intermittent fasting. I did that for about a year and a half.

Right.

That's where you eat for 8 hours a day. You don't eat for 16 hours a day. Love doing that. Really changes the energy in your body. It pulls out different energy from like stored fat in your body. Really interesting. Uh, currently I love doing ice— I do an ice bath every single morning. I did a sauna this morning for 30, 35 minutes, like very hot sauna where you're like uncomfortable, like you want to get out.

What temperature?

Uh, well, I think my thermometer is broken, but we're around 170 with about 80% humidity.

Yeah, that's—

um, but I think it's— anyways, I, I actually, I do doubt that. I just do it till I just am uncomfortable. I put it as hot as until I'm like uncomfortable. Um, but I love doing that, trying to get 8 hours of sleep, like, and, and then working out, getting your brain right. I don't know, the people People talk about getting sunlight. I've tried that before in the morning. Whatever it is to where you show up at 8 o'clock or 9 o'clock in the morning, whenever you show up to work and you have full energy and that energy can sustain you throughout the day, I'm a big proponent of anything that does that. So—

Cool.

Flow periods, you can do 40 minutes. I actively study this and I treat myself as like the sample. I'm gonna try this out. And I, you know this, we always talk about energy drinks. I don't like energy drinks just 'cause I don't want my body to be dependent dependent on energy from a can.

Yeah.

Or energy from another source. I want to have energy come from within me and from the food I eat. I really track like what I eat for lunch. How do I feel at 2 o'clock? If I eat this for dinner, how do I feel the next morning? I think about all that stuff all the time because if I can train my body and mind to be in a peak state when I show up to work or on a podcast or a show and I do that, compound that over a year or 5 years or 10 years, I'm going to beat my competition.

Yeah.

And play— if I can play that infinite game and I can live a longer, happier, healthier life.

So. Yeah. Well, on the flip, do you have any business pet peeves, right? Things that just drive you crazy in business that you're like, you wish people wouldn't do?

A ton.

Or investing.

I hate when people call me buddy. I've already said that before. Never call me buddy or pal or what's up, sport? Like stuff like that. And I don't know, maybe just because I'm relatively young, most of my business people I work, do business with are twice my age. Yeah, and if anybody ever calls me like buddy or pal, I like I almost I like I'll hang up the phone. Like I just cancel the deal. Like I don't want because it just it feels like a total little brother thing. And some people I know just the way they grew up they just call everyone, but I get that. But to me I just hate it. I hate when people schedule like when you're in a group chat and it's like hey we're gonna do this or that we hop on a Zoom call and there's just a lot of chatter about an idea and, and business lingo that sounds really nice. And these, all these little, little words and phrases that people throw around in MBA programs that don't really mean that much. And then they talk— people love to talk about business. They rarely like to do business. I'm very execution-oriented. I'm very action-oriented. And so it really bugs me if, if people are wishy-washy and Let's set up another call and let's visit, you know, let's circle back next week and we'll— and I'm like, dude, we're not— no one's gonna do a thing from now until next week.

Yeah.

And we're gonna show up to next week's Zoom call and we're like, oh, I forgot about this. Oh yeah, let's re-talk about it. And we just waste a week. Why don't we just decide right now? Be decisive. I'm gonna ask you right now, be decisive on this decision. Yes or no, gun to your head, do you want to go forward or not go forward? Don't punt this to next week. Give me an answer right now. And that Sometimes people I work on my team, I try to— anyways, they don't like that very much because I, I try to be very decisive and move quickly because money loves speed. So those are a few things that really bug me. Not really, but they bug me in business and, and, uh, and yeah, in life.

Yeah, no, that's great. Bridger, thank you so much for coming on and sharing your story. Talk to us about how you think about investing. Uh, honestly stoked to, you know, see where See where things go for you over the next couple years, man.

Well, it's gonna be fun, and you as well. Well, and you guys don't know me and Lincoln work together every day. It's just fun to be in here and just kind of talk about this. We haven't—I don't think we've ever had a conversation like this before, which is pretty fun. Yeah, it's been great. Love this show. Love what you're doing. So it's exciting.

Cool. Thank you.