A fund manager who's launched 300 funds breaks down startup costs: legal runs $20k to $50k, marketing $1k to $2k, and service providers $5k to $10k. Total out-of-pocket is roughly $30k, though many costs get reimbursed once you raise $10 to 20 million.
Chapters
How much does it cost to set up a fund? We get this question on YouTube all the time. Now I run 2 8-figure funds. I've helped 300 people through Fund Launch launch their funds. And we're going to answer this question in 2 minutes or less. So drop a timer on the screen. Let's go. Now, if you follow us with Fund Launch, we've helped over 300 funds go and launch. So we have a pretty good sense on how much this costs. There are 3 main buckets that you would bucket your startup and launch costs for a fund. Here they are: legal, marketing partners, and service providers. Legal, let's go to that one first. So legal would, if you follow this 4-step formula here, can be as low as, you know, let's call it $20,000. If you don't follow this process, I mean, you can be $50,000. I had my buddy actually, he spent $500,000 on his first file. That's kind of a crazy example. That's how much you could spend if you don't follow this process because we save our lawyers so much money by doing the hard work for them over here. Let's put down $20K here if you are going to do that process. Furthermore, marketing partners here. So marketing, you want to market your fund, get your name out there, build a website, that kind of stuff. Not that expensive. Let's call it $1,000 to $2,000. So let's talk service providers. This is setting up your third-party administrator, maybe a prime broker you are going to work with, banking partners. This I'm going to put down, you know, tax partners, $5,000 to maybe $10,000 total to startup costs. So overall, you are looking roughly $30,000 gets you out the door to start your fund. Furthermore, many of these expenses are actually reimbursable back from the fund. They are startup costs of the fund and they get reimbursed once you go raise the $10 or $20 million. You'll reimburse yourself back on these startup costs. Now for context, this is based on a United States, U.S. domestic fund. If you need to raise money from international investors, over here I have a framework on this, your cost is going to go up significantly. Anytime you cross borders, your cost goes up like crazy. But again, A basic, pretty much basic US domestic fund, I think out the door for $30,000. We've done hundreds of these, hundreds and hundreds of these through Fund Launch, and that's what we talk about on this channel. Follow along for more. Follow along for more.
