How To Prepare For An INVESTOR Meeting (STEP BY STEP)

Welcome back. We're going to talk about preparing for an investor meeting. All right, so you've gotten to this point. You're crushing it. Your fund is looking amazing. You've got maybe a big meeting lined up. How do I approach that meeting? Who am I talking to? And how do I get ready and make sure I nail that meeting? Okay, how do I make sure I just go crush it? Like it's just like it's like you know Babe Ruth bottom of the ninth inning. You know boom bada bing that that ball is just sent and this is amazing. Okay, how do I do that? So. Let's talk through a couple of different frameworks I like to use before entering an investor meeting. I'm going to spitball a little bit here because number one, I'm going to say this. Capital raising, there is 1,000 different ways to raise capital. And you'll hear from me and other people telling different ways to go about raising capital, and probably they're all good advice. So take what you like. You know, grab here and there and make your own formula of how you like to raise capital best. But I'm going to share what worked best for me. All right? Let's dive in. Down to the whiteboard here. So, I'm going to use for a minute here the capital raising matrix. Let's talk about this for a second. What do I mean by this? There are 3 distinct groups of investors. Now, you can maybe even add 4 if you'd like, if you said non-accredited down here. But let's just use 3. Let's say you're raising from accredited investors. There's 3 distinct groups. Number 1, high net worths. Number 2, family offices. And number 3, institutions. Now, what's interesting? They play at completely different levels and— Different rules. Very different people talk and can raise from different groups. For example, I had a mentor and their fund, multibillion-dollar fund. They had a capital— they had a couple of capital raisers on their team raising money. They had one guy that was extremely good with high net worth individuals. Just— and we'll talk about all the ways to be very good with high net worth individuals. They had a different guy who was really good at family offices. And she, I can't remember if it was a guy or a girl, but they, this person was amazing with families. Just understood the dynamic of how families ran and worked. Very, very good with family offices. And then they had a completely different person with institutions. If you put, the guy was telling me, he's like, if you put our guy with, that's institutional guy, if you put him in a room with high net worths, he can't raise a dollar. He's terrible. Don't, doesn't relate. Too high level. Just too Wall Street language. Doesn't make sense. Additionally, if you take our high net worth capital raiser and put them in a room with institutions, the institutions will eat them alive. It's way too bro-bro, way too relationship, you know, down here, not enough data and would never raise a dollar from institutions. And they actually decided to distinctly just separate the people, hire different people for each one of these groups. That's how different they are to raise capital from, to give you a sense. So now where are— how do I define these? Now there's, you know, You can, it's a little bit different of a dynamic. I'm putting here family offices have a net worth of over $100 million. You can see here. Institutions, what's the definition on that? That's more like a bank. This is an investment bank. This is an insurance group. These are people writing checks $1 million to a billion, $100 million, excuse me, to a billion dollars. They are playing in this realm. Okay? A lot of times, by the way, an institution, They have certain mandates. We'll start here for a second on institutions. So they have what's called a mandate, meaning— and same with family offices, they also have a little bit less strict, but also mandates. And they have certain things. So, for example, they'll say, our minimum check size is $50 million. That's the minimum check size we will write. Furthermore, we do not want to be more than 10% Of a firm. So do the math there. That means a firm, for them to invest, one of their first qualifications has to be that firm has to be raising $500 million of equity. And if they add debt, they're going to— if they're a real estate fund, for example, they could probably go buy $1.4 billion of real estate. So a lot of groups, like I've had people in Black Card, people coming to me, Bridger, I'd love to go raise from institutions. I'm going to say this right up. They have mandates. They have very clear guidelines of what they will and won't do. Another, like a lot of times they'll say, we won't— we will not invest in your fund until it's at least the 3rd fund. We just won't do it. That's just one thing. They have about— I had one mentor tell me he got— they had an institution come and try to— they were going to invest with them. They gave them a 40-page due diligence questionnaire. With 30 questions per page. And those were— that's question number 1. And that's question number 2. Are you on your third fund? Number 3, when you do an audit, is it from a Big 4 accounting firm? Number 4, what's your cybersecurity policies? How do you do— like, just, you know, stuff that it takes a lot of capital and time to even become what they call institutional ready. Okay? So I'm going to put a pin in this for a second. Most people watching this video, you're not going to be raising from institutions anytime soon. It's good to think about it in the future. It's good to plan for it. But I would not even chase these fish right now. They have mandates and rules that they're not even allowed to invest in your fund. So let's go down the pipeline here. Let's talk about family offices next. Family offices, a few things. And I'm actually— we'll talk about high net worth and family offices almost a little bit together here, how they work and at least my experience working with them. Number 1, with both of these groups and even institutions, we've had a bunch of place managers tell us the exact same thing. If you're looking at, you know, priority of things that you go after, number 1 is very important is the story. Right? What's the story of your firm? Why are you here? What are you doing? How do you have proprietary deal flow? Why are you even playing this game? And we talk about this a lot in the capital raising section is what's the story behind what you're doing? I'm gonna put story on here. I think story is like, firstly, when you're preparing, that's one of the most crucial things that you're talking about is the story of your firm. Like, what is the story of what you're doing? Okay. Now, it does mix up a little bit though. As we go here. Now, if I'm going to go talk to a family office, OK, the story is important, but I'm actually— the next thing I guess on my priority list, I want to know their mandate. I want to learn about their family office. What do they invest into most? And by mandate, I mentioned over here a few things, but mandate, a lot of times they already have predetermined if they even want your fund type in their portfolio. So, for example, a family office would come and say, hey, our mandate we have a mandate of 23% of our portfolio is going to go into private equity and 44% is going to be in real estate. And we, you know, we haven't put cryptocurrency into our mandate. And so it's not even worth talking to us because it's— we as a firm haven't even decided that we want it in our portfolio. Does that make sense? And I run a crypto fund. And so I will actually go research, is it part of their mandate or are they interested in adding a sliver, maybe 2% of their portfolio is now going to be part of their mandate into crypto. Upfront, I want to learn that upfront. Is it even in the universe? I want to learn the family office mandate. So again, I got my story. I want to learn their mandate. Over on high net worths though, in my opinion, they don't really have mandates. They just want to get good returns. And I want to figure out what matters to them and how can I increase that. So again, I'm doing research beforehand. I want to figure out what— okay, number one, I have my story. And a story for— we'll talk about differences of stories a little bit, but what's the story of my firm? What matters to them? Now furthermore, if I can learn their mandate, let's talk about family offices and what matters to them. If I can learn their mandate, I also want to learn their firm structure. Who am I talking to? Am I actually talking to the decision makers? Who is here on the decision maker? Now let's talk about this in tandem with institutions. When you're pitching these larger family office institutions, they have multiple teams of decision makers. Typically, this is how it would run. If I zoom over here, You're going to have some way, shape, or form of, let's call this the analyst lever. Analyst. Okay? You have some kind of front-level people that are going to take in your deck and maybe hear a first-round pitch from you. If they feel like it fits the firm structure, their mandate, they are then going to elevate it to their, and there can be multiple tiers, so I'm going to make it simple for now. They could elevate it to their, I'm just going to call it their boss. Okay. And typically these firms get together and they have a bunch of different analysts. I'll put an analyst over here, analyst over here, analyst over here. And these analysts are feeding different decks and they'll probably plug it into a formalized way that they review decks. So for example, they'll take your info on your deck. They have a formalized way they digest that information if they like you. They would then put that into a formalized, usually what's called an investment memo. The boss then can review those investment memos. If they like it, they then elevate it to what's called the investment committee. The investment committee will meet. Let's just say there's 5 members on the investment committee. I'll change colors here. 5 members in the investment committee. They take now. Not your deck. They take your investment memo and they review it as an investment committee. And then they vote, you know, yes, we want to go, no, or maybe a maybe. And they want to get more info. A lot of the time with a larger family office institution, you're not even pitching your fund. They'll maybe do some phone calls. They'll do some due diligence on you. They're going to learn about you. But in the traditional sense, you're not— sometimes you're not even pitching your fund to the investment committee. They are trying to take emotion out of the game. If you think about why they would do this, number one, it streamlines the process. They have a lot of different decks coming their way, streamlines the process. Number two, it centralizes the data into a standardized investment memo that they typically have internally, the way they like the information presented. And then number 3, this allows the investment committee, you know, maybe they received 100 decks. The analysts whittle it down to, you know, 20 of them. The boss level, they limit it down to 5. And at the end of the month, they go review 5 investment memos and they vote yes, no, or maybe on them. Okay. One way how a family office institution would run. And now there's sometimes there's multiple levels in between here, but this is more simplistic. I'll give you another. This is how we function with Fund Launch Partners. Fund Launch Partners, the GP stakes fund. We review a lot of Black Card members' funds. We want to see if they're good or not. We have analysts and interns that help review decks and do due diligence. They bring it as they write up an investment memo. It's usually, it's usually 5 to 7 pages, written pages on this firm. We then read and review as an investment committee and we vote on these firms if we should do a deal or not. I want to make sure that makes sense because Depending on the firm here, depending on what you're doing, your deck may be a lot less important as it gets here, and it might be worth building an investment memo as well so that it can be streamlined up to the boss and up to the investment committee. If you can write the materials that they're going to want anyways, all the way up to the investment committee, it, I think, increases the chances of at least getting reviewed and maybe getting a yes from an investment committee. It's— you're speaking their language. You understand their process and how they are thinking. Okay, on here with their firm structure, the same thing is true with institutions. Now again, every firm is going to have a little bit different of a process, but at the same time, decently similar. They, a lot of them use this pretty much same process. So it's good to know that and understand when you talk to the analyst, remember this is who I'm talking to, or I'm talking to a boss-level person, or I'm talking to an investment committee member. Hopefully, by the way, they'll invite you to come present. I always like presenting my fund Rather than letting a deck present my fund. But that being said, sometimes they don't allow people to come present because they want to take the emotion out of the decision. They don't want to say, wow, man, you were so charismatic. Well, yeah, we'll invest with you. They want to take that away and just look at the numbers to make a very informed decision. Now, if I jump back to high net worth individuals, much different. There's no process, right? Typically, It's just them. They are the decision maker, which is where most of maybe this group is going to be raising from. It's probably high net worths and family offices. So down here, if I erase this a little bit, again, story, very important of your firm. It always is. What matters most to them? And then furthermore, and on this, I'll put little notes here. We're going to put little threads on that. I try to figure out, again, what matters to them? Are they looking for a relationship? Are they looking for just— I mean, all of them want to look for returns, I'm sure. But sometimes they're looking for tax depreciation. Are they looking for straight returns or more tax benefits? Are they looking for a relationship? Are they looking for, you know, maybe there's ways you can help them with their business. You'd be surprised how big of a thing the relationship is with high net worth individuals. So what matters most to them? And I try to figure that out very early on. I want to, you know, we open up our phone call, right, with them, or maybe it's a Zoom call. I want to learn about them. I want to hear about their business, their story, what they're— and I'm trying to look for ways that I can benefit their life. And this is a little bit true with family offices, but I think furthermore with high net worth individuals. You know, hey, are you guys looking for, you know, what— tell me about your business. What are you guys doing? Oh, maybe I can help you out there. Oh yeah, we got a guy over here we can help you with this or this or this. And I'm trying to build a relationship with them that I can help them a lot of different ways. besides my firm, besides my fund. Now, when I go to pitch, I'm going to lean into— I love this. It's vehicle, internal, external. And this can be true for all your pitches with your story. So, but I'm going to do it especially for high net worth individuals. This is what I call the vehicle, internal, external. This model has absolutely changed my life. Oren Klaff calls this the croc brain, midbrain, neocortex. Other groups call it different things, but these are Massive. OK? Vehicle, internal, external. This is huge. If you want to go do anything, I use this when we speak on stages. I use this for all sorts of type of stuff. And we have other videos on this, but I'll give you a brief summary here. Number 1, vehicle. I want them to be sold on the vehicle of what we are doing. So, for example, if I'm pitching a real estate fund, I want them sold on real estate just as an asset class. And I'm going to ask them that straight up. Like, let's just— can you make money in real estate in general? That's what I'm trying to figure out. Family offices, they've already decided that. They already have a mandate. Yes, we believe in private equity. We have 23% allocation to private equity. Okay? I'm going to try to figure this out with all these groups, but I'm going to ask this question straight up. Do you believe in real estate? Furthermore, do you believe in real estate in Austin, Texas? And I want them sold on the vehicle that yes, Austin, Texas is a great place to invest in real estate. Different example. I want them to be sold on cryptocurrency, right? Is a vehicle that you want to be in. And I'm going to gauge their interest. Private equity or buying restaurants or whatever the thing is, I want them sold on that vehicle. If they're not sold on the vehicle, I will not— I don't want to even talk about internal, external things. So, for example, real estate in Austin, Texas. Great. Let me talk about the market demographics. Now, let me show you how we internal, how we make money. So this is how we make money. It's internal false beliefs, how people like you and me can make money in this market. Yeah, I get that other people in Austin can make money. Great. But how could people like me or you make money in this market? Let me show you how. This is our investment strategy. Our edge is how we look at things. And then finally, external. This is time, money, Knowledge objections. This is where all these sit. Okay? This is where your fund terms, what's your lockup period, investment returns, all that kind of stuff all sits here. So if I look at this little box here of vehicle, internal, external. Let me give you a different example. Crypto. Okay? When I start my— I'm pitching crypto. I'm using a crazy example to get— I think it drives home the point. I want— I'm going to ask them first up, how much do you believe in crypto? Like, are you— scale of 1 to 10, how much do you like it? Well, I'm like a 6. Okay, well, what's— tell me your story on crypto. And everyone's got a story. Oh, in 2015, I heard about crypto and I didn't buy and I waited, blah, blah, blah. I lost my money in 2018. And okay, great. Let's talk about the market of crypto, just where the industry is at. BlackRock and Fidelity just opened up a number of ETFs for Bitcoin, for Ethereum, all this great stuff. Mastercard just announced their crypto platform. PayPal just announced a crypto platform. Microsoft's going to be buying Bitcoins now. The potential of a U.S. strategic Bitcoin reserve. There's all these countries now and central banks all moving to cryptocurrency platforms. We believe this is a tidal wave. What I'm trying to show in the vehicle, this is a tidal wave. There's tectonic plates happening, macro events that are pushing money in this direction. If I was pitching Austin, Texas real estate, looking at demographics, people are moving from California, from Texas. Everyone is flowing to Austin, Texas. We got space— what is this? SpaceX just put their headquarters there. Elon's doubling down on Austin. Everybody loves Austin. We have a mass migration event. These are massive tectonic plates that are moving and shifting now. If we wait 5 years, we might miss it. That's what I want them to feel during the vehicle section of my presentation. Next up. OK, so how do we then— and I always ask, does that make sense? Do you see why we're so excited about Austin, Texas? Do you see why we're so excited about cryptocurrency or private equity, whatever the thing is, venture capital right now? Do you see that? Great. Now let's talk about how we approach this market. So we're ABC Investment Firm. We've been in Austin, Texas, for 25 years. We know every nook and cranny of this city, and we've decided to take this one specific strategy that we believe extracts the most value from this tidal wave of capital that's moving towards us. And it's called, you know, and you have some great name for it, X, Y, and Z thing we're doing. Our firm, we take a risk mitigated approach to crypto and blockchain. Let me show you this pie chart of how we have 25% of our assets here, 30% of our assets here. And this is how we approach the market. And this is how we have done extremely well. Here's our performance over the last 5 years. All internal. I'm now— hopefully, they're now— they have to be sold in the vehicle. Now I'm selling them on us. Us as a firm or we together. People like you can make money in this space. That's why we opened this firm to let people like you in. OK? I'm doubling down on vehicle and internal. And I pause. Does that make sense? How we make money, how we approach the market. Is that making a lot of sense? Is that following along so far? Great. Now let's just talk about how the fund operates. OK? Here's, you know, minimum commitment is $100,000. Money, knowledge, how much, you know, you don't have to have any knowledge. You just put your money in. We send you a K-1 at the end of the year just for taxes. You don't have to worry about tenants, termites, toilets, nothing. You just get a K-1. And we take a 2% management fee and 20% carried interest. If someone is not sold on vehicle and internal. Don't even talk about the external stuff. Furthermore, if someone brings up an objection, time, money, knowledge objection, typically the underlying root cause is from internal or vehicle. For example, if I'm selling funds, I sell investment like, hey, join Black Card, join our group online for investment funds. I have to first get someone sold on the vehicle of funds. Funds work. Look at all these great people doing funds. And I want them in their brain to go, yeah, I guess funds do work. Funds is the best asset. This is the industry everyone wants to be in. Great. But Bridger, there's no way funds would work for me. So my next part of my presentation is all about funds working for you. Here's some testimonials. Here's people just like you. Here's a person in Alabama. Here's a person in New York. Here's a person in Canada. They all did funds. This is how we help make it really easy for you to do funds. If I can get them sold on vehicle and internal, they're usually people who are laydown sales. And then furthermore, okay, what's the cost? What's the time? What's the knowledge? So, if someone, again, if an objection comes up, Bridger, man, Black Card is too expensive. I go, okay, well, let's define expensive. First off, though, do you believe that funds could work? Like, in general, do you believe funds is a place you want to play? Yes. Okay, great. Do you believe a fund would help you in your business and what you're doing right now and all this stuff? If you had a fund going, how would that help you? How much money have you left on the table because you didn't have a fund? How many deals have you missed out on because you didn't have a fund? Okay, so hundreds of thousands. Most people respond about half a million dollars is missed out. That's the average response I get. Okay, great. So paying $40,000 for Black Card, it's all relative. You just told me you missed out on $500,000 of money you would have made because you didn't join Black Card last year. Hmm. Interesting. It sounds like more of an internal concern. I'm going to talk about internal or vehicle. It's not about the money. Money's a counterpart, a symptom of not believing in the internal or vehicle. Does that make sense? If someone doesn't like your crypto fund or your real estate fund or your private equity fund, maybe it is on the external things, but more often than not, they don't believe in the asset class or the vehicle. And they don't believe, or, and/or they don't believe that you can do that. And if I go back to our building your edge, that's why we start with asset class. Number 1, your vehicle. Number 2, your strategy and team. This is all internal. And then this is external. So when we talk about building your edge, that's what we mean. That's why you start with asset class, you go strategy, then you go team, then you go structure. It's for that same reason of the psychological changes. So back to, I'm going a little bit long here, pardon me, but when preparing for these meetings, that's what I'm thinking through. I'm preparing my deck to approach different groups of investors. Now again, the data and the firm, I'm going to erase all this for a second. You can go back and watch the video if you— Don't erase it. I'm like, sorry, you can go back and watch it. Okay, these are all recorded. So again, who am I talking to? Am I talking to a high net worth or a family office or an institution? How am I going to approach that person? Quite different, actually, on how I talk to that person, approach them. Family office, I want to learn more about their mandate. I want to learn more if I fit into their structure. I know that they're going to have investment memos. I'm going to talk to different groups of people. Same with institutions. High net worth, I'm going to talk more about relationship, the story. How can I help them? And I'm going to help them through vehicle, internal and external false beliefs that they may have when going out and thinking about deploying into my fund. I always prioritize relationship. Over the deal. Okay? Relationship is massive over the deal. I never want to burn a bridge with anybody. Hey, if this isn't the right deal, no worries. We got other deals. There's going to be deals next year and the year after that. I'm sure we'll have plenty of deals. So, I'm never— I'm always focused on the long-term relationship with them. And hey, Bob, you know, we're meeting together. Hey. And maybe I'll impress this. Hey, if this isn't for you, this isn't for you. Don't feel bad. I'm not here to hard pitch anybody. This is a cool opportunity. I'm putting a lot of my personal net worth into this thing. I think it's very interesting. I think something you want to look at. Look at it with me and tell me what you think. And if it's a no, it's— and usually at the end of the call, hey, I'll do a takeaway. Hey, if this isn't for you, no worries. We'll hang out. We'll still go golfing. We'll still be buddies. Like, not a big deal. But if it is, this is something I really believe in and we're putting a lot of assets towards. Preserve the relationship. And actually, it makes your status much higher. You're not a low-status salesman that's begging for dollars. Keeps your status high, and people like to invest with people that have high status. All right. Hope that's helpful. Long video. Thank you so much for listening. See you in the next one. Bye-bye.