How I Started A Fund At Age 21

Woo! Welcome back to Investment Fund Secrets. I'm Bridger Pennington, and today I want to talk to you about how I started a fund at age 21. All right, so today's episode, I want to get really personal with you and tell you really my journey and story of how I got from, from here, just starting as a newbie, to actually starting my own fund and growing and building and scaling that. And so today I want to pull back the curtain. I want to share some kind of some secrets, some things that are kind of sensitive to me, and I hope you guys can accept that and, and what I've done so far, and hopefully you can lean A little bit from this. So going back, way back to the beginning, growing up, I grew up in a really average house. My dad— actually goes back to him— my dad grew up in the ghetto of North Las Vegas. If you guys know anything about Las Vegas, North Las Vegas is like the ghetto area, and he grew up there. Really low-income household, and his parents got divorced, and really was on a track for either prison or just a really low-income job, and to kind of repeat the process of his parents and to live in kind of a ghetto area. He decided to change his life My dad, though, went to school like nobody in his family or people wanted to go to college. None of his friends went to college. He went to college, though, changed his life around. And growing up, he decided he wanted to be an entrepreneur. So I was raised in an entrepreneurship house. And if any of you guys have lived in a house like this, or maybe you're currently raising your kids in a house like this, it's interesting because my dad was always doing different deals. I never could tell my friends what my dad did growing up, and I never knew really what he was doing. I just knew he had different business deals going on, different things. Growing up, my mom would always tell me, okay, you gotta save your money though. You can't order that, you can't, don't grab that, right? And a lot of, like a lot of moms do. And she drilled in my head, Bridger, you've gotta save money for college, you've gotta save money for your future family, 'cause you guys are gonna need it one day. And we're not gonna help you with a car, we're not gonna help you with getting into college, you need to save money on your own. So since I was little, that kinda put that spirit into me of I need to do this myself. And so growing up, I would always be saving money, always thinking of business ideas because that's what I was raised in. I think in my junior or senior year of high school, My dad was doing a business deal with this real estate guy and he said, Bridger, you got to go meet this real estate guy, and he gave me his number. He said, you contact him, go talk to him and just sit down as a mentor. So I said, great. So I went, met with this guy and I walked in his office and it was just beautiful. It's one of these offices that are just like in a magazine, right? You walk in, there's like mahogany wood everywhere and he's got these little like metal trinkets that like balance and they're science experiments but they're really cool. You know what I'm talking about? And I walk in, I shake this guy's hand and we sit down and he's got these floor-to-ceiling windows that overlook the whole valley. It's just beautiful. And I start asking him, what are the secrets to wealth? What do I need to know to be like you one day? And this guy managed just over $500 million of real estate. And he said, Bridger, there's a few things you need to do. He said, number 1, you need to get a mentor. So he's like, I'm happy to help you, I'm happy you're here. I don't— he's like, I don't know how much time I can give you, but you need to find a mentor. He said, for me, I went to a really good school. I went to an Ivy League school and spent a lot of time there, a lot of money, but it paid off. And number 3, he said, I spent about 20 to 30 years learning real estate to get where I am. He said, I've been doing this since my 20s, and now I'm in my late 40s, 50s. He said, you need to spend the time with a mentor, with schooling, and then just in the industry. He said, finally, after 30 years, I can be able to manage this big of a portfolio and make this much money. I left his office and I said, great. And I I started hearing that common theme though that he referenced in the meeting, but then I started to hear it a lot more, was investing is the way to make money, right? You read Warren Buffett and you see all these guys that are investors. Investing is the way to go. So in my head, I was like, okay, I got to be an investor. I got to be an investor. And I, like a lot of you guys watch Grant Cardone, right? Grant Cardone drills you got to get into real estate, be a real estate investor. So I got into college. I said, okay, I'm gonna be a real estate investor. I'm gonna do this thing. And the problem with being an investor is, you probably figured this out, is you need money to invest. And that really bugged me. And so I was like, well, to make money you need money, so I need to make initial money, but to make that initial money I need money. It's kind of like the chicken and the mouse game, right? Or whatever the— what is it, the chicken and the egg? That's what it is. And I was— so I said, okay, what's a fast way to make money? Well, I know entrepreneurship and starting my own business is a really fast way to make quick money. And so in college, I started trying to start businesses. And about this time, I was on business try number 3 at this point. The 3 previous businesses had done okay, they'd made some money, but nothing like life-changing. And I thought back to what he said, that original mentor said, you need to find a mentor. And I didn't talk to this guy for years. I finally found another mentor. He was a reference from my dad. My dad said, this is one of my business partners, give him a call. So I put in this address and I start driving to this guy's house. And I'm driving over these hills and I start hitting this really pretty area. I finally get to the top of this hill and I come right over the crest and I see on my maps like I'm almost there and I see this beautiful house. There's a cul-de-sac at the top that's pretty much encompassing almost half, even 3/4 of the cul-de-sac, this house. And I roll up and I'm like, oh my gosh, this is his house? And I'm driving up in like my peasant car, right? I just feel like a nobody and I park in front and I'm like, I feel like I'm gonna get like towed just because my car is so ugly. I walk up this cobblestone up to this— these— they're 15-foot doors, white doors, this beautiful entryway. I knock on the door and I'm sure that like someone's gonna answer the door and be like, be gone peasant, like we know you have no money and get out of here, right? And I'm like all nervous. Anyways, his son answers the door, he goes, I'm here for, you know, this guy And he goes, oh, come on in. And he invites me in and I go and I mean, I walk into this living room and it is massive. I mean, visually, I can already see this place just from my eyeballs from the doorway is bigger than my entire house. And there's like a sitting room on the left and a wine cellar on the right and there's a cascading kitchen and there's like the backyard with the pool and I mean, it was just beautiful, right? So, we walk in and he goes, Bridger, how you doing? He welcomes me in and I'm kind of like a little bit nervous and— He brings me around and sits me down in the front room on these beautiful white couches and he goes, what brings you here? And I tell him about this struggle that I've had. I'm like, okay, I know I need to be an investor. I know I need to probably get into real estate or other types of investments but you need money to make money and I'm stuck and so I've tried to start 3 businesses and I'm just rambling off to this guy like all my problems and this frustration that I have and it's kind of winding up and he goes, He sits me down, he goes, Bridger, do you want to know a secret that I figured out just about 11 years ago that has led to all this? And I was like, yeah, you bet your bottom dollar I do. I didn't say that, but— And he, he kind of leans in and he goes, I didn't use my own money. It kind of took me out. Like, what do you mean you didn't use your own money? Like, yes, you stole this money, or you— I mean, like, what happened? And he goes, I started a thing called a fund. Have you ever heard of a fund before? I was like, yeah, I think I've heard of like a— I was a venture capital fund or probably— he goes, yeah, I started a, I started a private equity fund. He's like, this is the secret of the rich, the 1%, the rich people. They send their kids to Ivy League schools around the country. They send them to Harvard, they send them to Yale. Sometimes they'll even cheat and get their kids in. They make sure they get good grades, and then they send them to Wall Street to work at a big bank and to get really good experience. And about 10 to 15 years later, they make sure all of their kids get into private equity, hedge funds, venture capital. You know why they do that? Because they make so much freaking money. He said, it's the biggest secret of the rich. He said, I figured this out 11 years ago. And he's telling me, I met a guy, he drove a beautiful Porsche and had this amazing house, and I asked him what he did. He said he did private equity. And I said, I'm gonna do it. And he said, guess what? I built this whole place with a private equity fund, and guess what? I didn't go to an Ivy League school. I didn't work on Wall Street for 20 years. I did it because I'm a freaking entrepreneur and I can hustle and get things done. He said, I see the same thing in you. He said, you need to go out and start figuring out how you can start a private equity fund. He then went on to tell me how he structured it and started to explain the details of what private equity was. about how to start an investment fund, how to raise money, and he started to pull back the curtain of all of his secrets of what he did. And I was just like blowing, it was, my mind was just blowing. I was like, oh my gosh, this is like, this is incredible. This is what you do. You take money from investors, you put it into a big pot, and then you pretty much from that pot will use the money to go buy massive real estate projects. So instead of you, you know, earning $30 million yourself and then using that money to invest like Grant Cardone tells you to do, which is great, He says, go just start your own fund and use other people's money. And I said, well, come on, there's, there's no money out there though. I don't know anybody that besides you, like, there's not a ton of people with money. He said, you have no idea how much money is out there. So there are so many rich people in this world. He's like, I didn't know this before, but once I broke into this investing fund world, he said, there is so much money in the world They want to give you their money. They want to deploy their money into projects and investments. He said, there are plenty of people that you've— not just famous people, not the rich people you see on the news and stuff. So there are plenty of average Joe types of people that are like this. Your dad is kind of one of them. I was like, my dad? What are you talking about? He said, your dad. He's like, we're, you know, we're business partners, right? And I said, yeah. And I'm like, but you're obviously making way more than my dad. And he said, no, I'm not. He's like, me and your dad make about the same amount of money. I was like, really? I did that head move. I was like, what? Really? I was like, are you kidding me? My dad makes this much money? He's like, yeah. He's like, I just spend more money than your dad but your dad lives like— have you ever read the book The Millionaire Next Door? That's exactly what your dad lives. I was like, really? And I'm in college at this point. Like, what? I've been saving my money my whole life and been learning about finances and like— I was like, what are you talking about? He's like, yeah, your dad makes quite a bit of money and he runs this fund with me. I was like, my dad runs a fund with you? He's like, yeah, we run a real estate investment fund. I was like, no way. So I— then my mind was blown. I leave this guy's house, he like closes his big door on my peasant butt and he's like, get out of here. And I'm like, okay. I get in my car and I'm like, holy crap. And I went home, I was like, Dad! He's like, yeah, I run a fund with that guy and he's like, we're doing alright. And I was like, oh, like why have you not let me order a drink at a restaurant? Like 10 years. He's like, because I had to teach you something. So I had to teach you what money was worth and how to be raised the right way. And he's like, you better be thankful for that because I have raised you a lot better than a lot of other people in my situation would have done. And it really hit me at that point of how grateful I was for my dad for doing that for me and how well he lived that millionaire next door lifestyle. And we seriously lived in an average home. He drove a car with a dent in it for 25 years. And all of his partners were spending money and going on trips to Hawaii. My dad had done an incredible, incredible job of this, and so I talked to him more about funds, and I knew this whole fund world. But then my dad said, okay, now we got to find something for you to invest in. If you want to start your own fund, this is the secret of the wealthy. And I was sitting there, I was talking to my dad, and I said, I have an idea. I said, at work right now, they're talking— all the owners— and I was kind of at a small company, less than 100 people. He said, the owners keep talking about their clients have problems when they have like maxed out credit cards and they have too much debt. He said they're looking for someone to do short-term loans to these clients. I went to my— to the owners, I asked them, they said, yeah, we would love if someone could do short-term loans, $5,000 to $10,000, maybe $15,000 loans. They take about 4 to 6 weeks to come to fruition. We would love if someone could raise a fund and lend to our clients that we have. We'll secure the loans. I mean, it'll be incredible. You'll You have a very low risk. So I come back to my dad, I'm just excited as ever, right? I'm like, Dad! I come home from work, I'm like, Dad, I have this great idea. I found the owners of the company want me to start a fund. They need like maybe, I don't know, like 10 to 20 loans they need to do this next couple weeks and we can start rolling the money. And I was like, Dad, this is so exciting. He said, Bridger, this is great. He said, you are on the great path. Here you go. And he went and grabbed a stack of papers this big and he gave them to me and he said, this is the legal documents we have for our current fund. You need to read through these 15 to 17 times before I can talk to you again. I was like, what? Like, you're my dad, like, come on, like, help me out. And he said, no. He's like, I cannot help you any further. You need to go and read these documents so you understand the legalities of a fund. He said, these documents are your Bible. When you start this fund, you need to go through them, and then you, you should be able to tweak and edit them. You should know these things front and back because people are gonna ask you questions about them all the time. It's called your LPA, it's your Limited Partnership Agreement, and your POM, Private Offering Memorandum. And I said, okay. And so I spent the next 3 weeks, I would wake up early in the morning, I would read all day. This is like the definition of dry legal documents. I mean, I'd read like 2 paragraphs and just be like, what did I just read? What is that? I was Googling words. I mean, it was like learning a new vocabulary. And so I read through these, I'd go to lunch, and then read again. I'd have like a little bit of dinner. I'd read and go to bed at night, wake up the next morning and repeat. And I was in about 3 weeks into this and I was just exhausted. And finally I come to my dad. I'm like, okay, I've read them just about 15 times. Can you, can you please help me out? He's like, let's find you— we need to find a lawyer now. And he said typically lawyers cost, if you just went and found a fund lawyer, it'd be like $30,000 to $40,000 to set up a fund. I was like, oh gosh, I don't have 30, 40 grand. He said, but you can actually do this for a lot cheaper than what people say. And he said, here's a great lawyer for less than I think 3 grand. And that was my money. I put my money in. We set up our entity and documents and we had it all ready. And I remember that day we came out and my lawyer had just emailed me like the final version. I came out and I was like holding these 2 documents like they were gold. I was like, ah, like this is it. You know, like this— I have my 2 documents. My fund is now set up. We're filed with the SEC. Like, It wasn't that hard. I was just impressed about how easy and smooth it was and now I was ready to raise money for my fund. I was so excited and I was like almost like just running around just a little bit crazy about how to do it and I thought okay, well the first person I'm gonna go to apparently my dad has a bunch of money. I'm gonna go to him, right? Like he has all this money, doesn't spend it either so it must be just sitting in his bank account and so I go up to my dad. I meet with him one night and we're walking into his office I sit down with my dad. Dad, how you doing? Good. I'm like, thank you so much for helping me with this fund. I'm ready to raise money. He said, great. And I said, Dad, can— will you be my first investor? And he looked me dead in the eyes. He said, Bridger, he said, I have the money. I could give it to you but I won't. He said, if I give you this money right now, you will not learn what it's like to go raise money from actual investors. He said, I would strip you of that experience and that struggle and hardship. And he said no. And he kicked me out of his office. I left and I went back and I wasn't living with him at the time, I was at my apartment at school. And I started to rack my brain of, okay, I need to start using resources. What are resources that I can find to find investors? And so I started looking through my friends growing up. What about— what did their parents do? I thought, I think of like a previous boss I had, previous even professors at school, right? Could they invest money? And I started going through and I started asking around to get money and it finally came. I'd spent— so I now just backtrack, I spent about the last month reading these documents and now I spent about last 2 weeks looking for investor and found nothing. And I just spent money on like a lawyer, like $2,000 or $3,000, my own money. And I remember going to the cheap grocery store in like our area, you know, like that really grungy one you go to, and I got there and it was dark outside. And I was just exhausted. You know those days when like the energy is just like drained out of your face? And I'm like bent over on the cart and I'm walking in the supermarket and I start looking at all the good food in there. Have you ever done this before when you're in the supermarket? Just wish so bad that you had the money to buy like the expensive, like nice Pop-Tarts and pickles and like the like good ice cream like the Häagen-Dazs and just random crap. And I'm going around and I'm like, Daydreaming about like just food that I could buy. And I was like, no, I can't do that. I'm just gonna buy the bare essentials. So I bought like bread, eggs, and milk, like just to sustain life. Like that was it, right? And I check out and I go to my car and I put my groceries in the back seat and I sat in my car, closed the door. It's one of those moments where the world just kind of feels all on your shoulders, right? I'd spent the last— now it was the last 5, 6 weeks trying to set up this fund. Had no investors, no luck. I remember sitting there like, you know what? Is this even worth it? I'm 21 years old. Like I've got a long life ahead of me. I can— I should probably— and my grades were kind of suffering. Like school was hard. And so maybe I should just try to go to school and maybe just do the 9-to-5 thing. Maybe I should just kind of quit this whole entrepreneurship thing because it's so hard. And everyone tells me it's so hard. It's a long journey. I've seen my dad take that journey. I thought about my parents. My mom's an immigrant. My dad grew up in the ghetto in North Las Vegas. Every day he went to high school, they had to have scanners to make sure kids weren't bringing guns and knives to school. I mean, he really grew up in an awful place and he was able to work his butt off. And I saw how hard he worked. He worked 12 to 15 hours a day for about 15 years. And he did that. And my mom immigrated to the United States and they kept their marriage together and worked at it and raised us kids so that I would have a chance to go out and change the world and make money. And I believe you make money to give money. And I truly believe that. And that's kind of the models I put into this program of using what you have, the gifts and talents you have to serve and bless others around you. And I said, I've been given way too much from my parents to not be successful. And I thought through That the fact that I was born in America, the servicemen that have gone out overseas and died, that I can have the freedom to go to school, to start a business, actually even have the chance to find investors, right? The fact that I'm born in America. And then I thought through what God has given me. And I don't know if you guys are religious watching this, but I am. And the fact that God had given me life and I have a heartbeat and a body that functions and works. And I was thinking through all these things and I said, I am so blessed that it is my duty to be successful. But I'm going to figure this out. We're going to find investors. We're going to start this fund. Within the next week, I'd set up an investor meeting. I remember walking in and there was like 4 or 5 guys on a table. I came in with like my shirt on, like my collared shirt, and I was all trying to be dressed up. And I came and I pitched these guys the fund idea. They said yes. And we raised our first money. I started my first fund, and that first fund did incredible. We had amazing returns. Our investors were really happy. We started our second fund, doubled our fund size. I got better and new investors and kind of bigger investors, and we've blown this up. And that was about a year and a half ago. And since then, now I've hired some employees. They're helping me run this thing, and we are on our way. And the purpose of this podcast and the show and everything is to First off, I treat it as my personal journal of telling you along this journey and what's going on, but also so that you can feel like you can do it as well because I did it. My dad and his business partners did it without Ivy League degrees. They did not go to Harvard. They didn't have the connections. They didn't have the— they didn't grow up in some ivory tower in Greenwich, Connecticut, right? You can do this anywhere. You can go and start a fund right now. And in the future episodes, I'm going to tell you about Fun strategies, how to find money. I've mapped it all out, and I'm gonna be also interviewing some of the top minds in the game. And these are— I want to interview people that did it when coming from nothing. I don't want to interview the Harvard MBA guys. Screw those guys, man. I'm so sick of hearing that you need a Harvard MBA to get into this world. We are breaking in. I know dozens and dozens of people that have done it without that crap. So give yourself the permission and release that inside you that you can actually do this. Love you all, and I'll see you in the next episode. Yo, if you're just starting out, you probably have a lot of questions. That's awesome. I want to hear them. So please go to investmentfundsecrets.com, submit your questions, and if I like your question enough, I actually want to bring you on the show with me to ask those questions live to me, and I'm going to bring on another investment fund manager to answer them for you. So if you're interested in that, please submit a good question on the website. Again, that's investmentfundsecrets.com. See you there.