How To Raise Capital Like A MILLIONAIRE In 2021

Hey, hey, welcome back to the show. Today we're gonna talk about the 3 stages and secrets that I found in raising capital. A lot of times we get confused when we go out and try to raise capital for our funds, our projects, our businesses, and we get confused on which stage of the capital raising process we're in. Sometimes we find really great investors, but we hit them with the wrong stage and it actually ruins a relationship, or they never want to invest with you and never want to talk to you again, whatever happens. And other times we have investors that are ready to invest, ready to go, and you hit them with the too early of a stage And actually, you never— you don't get dollars in as quickly because you're too timid to ask for the dollars, don't know what to do, don't know how to present. So in this episode, we're going to dive through all of that and get into it. Hope you guys enjoy. Hey, if you guys don't know me, my name is Bridger Pennington. I've launched 2 funds in my 20s, launching a 3rd fund right now. I've raised and deployed millions of dollars out of those funds. My family all run different investment funds, and we've helped dozens and dozens of people launch funds above the $10 million and a few under over the $100 million and one over the billion-dollar Mark. And these same 3 stages have stayed true for all of those people. Now, the first thing I want to say is about different classes of investors. You first off, you have high net worth individuals. These are rich individuals, usually a net worth from anywhere $1 million to about $50, $60 million. The next tier above that is when you start getting into the family office realm. These are individuals, usually families over $50, $100 million, where they start to set up an actual family office that'll invest into various investments. They've now hired people to manage the family's money just for for that family. And there's 2 types. There's a single-family office, there's a multi-family office. And again, these 2 can kind of get blurred a little bit. And then finally, the top tier, you've got institutions. These are pension plans, these are insurance companies, these are huge banks, these are large, large players. Typically minimum, bare minimum check size is about $5 million depending on the institutions. A lot of institutions even higher than that. I've seen $15 or even $30 million as a minimum Minimum investment they can put in your fund. A lot of these institutions, they don't invest in the first-time funds, even second time. It's got to be a third-time fund, and there's a lot of things that go into institutions. Again, they vary drastically. I'm speaking in broad sense. So for today's purposes, we're going to talk mostly about high net worths and family offices. Number one, because that's where most of my experience is at, is this. And number two is because most of the capital you're going to be raising is going to be coming from these two groups as well. Now I always get questions: Bridger, how do I raise money? How do I find these people? How do I pitch them? How do I close them? How do I get Money in my fund. And the first thing I try to do is break down exactly where you are at in the process. So let's mark out the 3 stages of raising capital here. Okay, so stage 1 here is get in the room. For lack of a better term, that's what it is. This is you actually getting in the same place, the same room, the same party as these high net worth individuals or family offices. Number 2, how do you actually convert that person to a warm lead that someone that would maybe know, like, and maybe trust you so that then they're warmed up For you then to make a pitch, and then finally step 3, closing the lead. Now, if you know anything about sales, this is very similar to a sales process, right? You prospect leads, you warm up those leads, and then finally you close those leads. Now, that may sound very simple, but let's break it down into actual sense for investors, what you're doing with these investors. So over here, number 1, get in the room. I meet with a lot of people. Bridger, I don't know how to raise money, I don't know how to get in the room, I don't know where these people are. The number 1 thing I'll ask you or anybody that asks me is, Where are the wealthy people already at? They are already grouped together. You don't need to go find all of them. They are already grouped together. It's the same principle about online marketing. We always talk about finding a blue ocean. You don't— you discover the blue ocean. The people are already there. You discover them and you insert your product into that ocean. People are already clumped together online or in person in different places. A few examples of this would be Think about places where wealthy people are at. Guess where they're sitting at NFL games, NBA games? Probably the first 10 rows. They're already grouped together. They go to dinner beforehand in the NBA games. They're at the Ferrari club. They're racing sports cars. They're going to different high-ticket mastermind groups. They're at different business conferences, entrepreneurship events. Colleges are very great at bringing back successful alumni. They hang out with angel groups that are looking for people like you to invest into. These groups already exist. But that brings up another question. Well, Bridger, how do I— how do I get into an angel group where if the Ferrari Club of Salt Lake City. Aha, there we go. Now we're getting some good questions here. So I break it down into 2 frameworks. Number 1, work your way in, or number 2, buy your way in. So when you break it down to these 2 buckets, working your way in versus buying your way in, let me give you a few examples. Working your way in would be grabbing an internship, working, going through LinkedIn, trying to find a friend of a friend. It takes a lot of work. You are literally working your way in somehow to get close to those groups where wealthy people are already at. One of my favorite examples is throwing events. Good salespeople, good marketers are event throwers. Some of my most successful times raising capital was when I threw events. And if you followed us on social media, we've done cars and coin events. We have guys with supercars bring their supercars out. We have people, we throw different types of events to attract these types of people, which now brings me over to the other side of buying your way in. And with events, you're kind of buying your way in as well. I'll tell you a quick story. My dad, when they were starting their first funds, now they're over $26 billion. It's crazy what they're able to do. And by the way, my dad's never invested in a single deal, project, property, anything I've done. But he's taught me a lot of great principles and mentorship about running funds. That's how I was able to get my first 2 funds up and running. And seriously, I pitch him all the time and he still says no. I pitched him 2 days ago. He said no to invest in a certain thing I was bringing in. But what they did on their first funds, his business partner came back to him and said, hey, John, We just bought season tickets, box seats to the Utah Jazz. I live in Salt Lake City and we love the Utah Jazz here. And my dad was like, what? Come again? How much? And he goes, yeah, it was about, you know, it was about— I think it was about $50,000 he spent on season tickets. This is a startup business. They got no money. They are brand new. My dad stands up, he's about to rip his hair out. He goes, whoa, whoa, John, before you get mad at me, let me tell you why I did this. And he goes, right now we're calling into CEOs, to family offices, all these rich people, and guess what they all say? They have a gatekeeper and that gatekeeper says, oh, sorry, Mrs. Johnson's too busy. Sorry, Mrs. Peterson's— whoever— too busy. I can't. No meeting, blah, blah, blah. He goes, John, if we make that same phone call and we say, hi, we're calling in for Mrs. Johnson. We actually have 2 box seat tickets tonight for Mrs. Johnson and her husband to come with us. The Jazz are playing the Lakers tonight. We would love for her to come and attend the game. Guess what's going to happen? There's a much higher chance that gatekeeper is going to pass that message along. And if she doesn't, she's probably going to get fired, right? And so what started to happen is they started to call in and they started to take people to the Utah Jazz game. They had 4 seats. 2 would be for the person they invited and then 2 themselves. And they had 3.5, 4 hours. They were sitting, they were talking, they were watching the game, and they would talk about the fund, all the great things that was going on. That one decision to buy those tickets, to buy their way in, they said led over to $50 million in investment and probably a lot more if they quantify the people they referred and referred upon there. But that's how they got their fund off the ground. They bought their way in. With still a little bit of work to go into. Another example with events. I personally love events and I realized a few years ago that people with supercars, obviously number one are wealthy, but they usually like to show off their supercars and not a super dumb flashy way, but they want to meet other people as well with supercars. So we decided to start throwing supercar events. We would network around and invite people that had supercars to come to a house or a mansion or a place where they could show off their supercars. And we started to group people together that all had supercars and we'd hang out, meet with them, talk to them, for a few hours, talk about their cars, and naturally it would lead them into stage 2. Is that making sense on stage 1 over here? Okay. So now let's go over to stage 2, converting that person to actually a warm lead, 'cause it's one thing to just get in the room. It's one thing to be at the jazz game or to be at the supercar event. It's a whole nother thing to be at the event, meet somebody, have them interested in you and kind of like you, and set up some type of meeting where they want to potentially invest in your business. Those are two totally different things. So Bridger, how do I go from just, hey, hi, my name is Bridger, good to meet you, to, hey, I'm Bridger, I run a fund, and they now say, Bridger, I want to give you some money and invest, and get to stage 3? I have found 3 distinct ways that I personally have been able to quickly convert someone I meet at a party or an event or wherever I'm at to someone who's now going to step 3, someone, a potential investor that I can pitch. You guys cool if I share those with you? Sound good? Now I can't tell you everything because obviously it takes a certain level of charisma and confidence and enthusiasm to go around and meet people and talk to people, be engaging, all that kind of stuff. I'm not going to train you on that because frankly, I don't know how to do that training besides just go out and try your best. But in the conversation, there's 3 specific things that I will do that will hopefully bring us to step 3. So let's go into the first one. Number 1. Now typically what happens in these types of settings is when you start talking about work, you talk about what you do for a living, all that kind of stuff. Now, number 1 rule, People love to talk about themselves. So I will try to get someone to talk about themselves, their life, in a different way they haven't before as much as possible. People love to talk about themselves. I mean, look at me, I've got a whole YouTube channel where I can just talk about myself and my stuff right here to you, okay? But naturally, when you talk about other people's businesses and their careers, all that kind of stuff, they tend to ask you what's going on in your life. And when someone asks me, what I always say is, hey, I run a fund. Now we have an advantage. That word fund is a buzzword in a lot of circles. Typically when you tell someone you run a fund, a private equity fund, a hedge fund, a venture capital fund that you actually run, people's ears kind of perk up a little bit. They want to learn more about you. They go, wait, hold on, you run an actual fund? Well, yeah, I got— we're doing, you know, X, Y, and Z deals. This is what we do. So first off, you're already at an advantage because you're in the fund game. People typically like to hear more about how you're doing a fund, what's going on. Now sometimes because it's so intriguing, people will be so interested they say, hey, I want to learn more. Here's my card. And that's just an easy close to number 3. But we're going to talk about people that are more in the middle. What do I do with them? So I'll talk about my fund for a minute, however much they want to talk about it. But this is the first stage that I'll do right here. Because now I don't want them to just leave and forget about it forever. I want to convert them again to somehow try to get over to number 3. So what I say is this, and this line has actually changed my life, changed how I've met people. I go, hey, because of my unique situation of running a fund, I actually get a lot of deals across my desk. And most of these deals I actually can't do. Our fund only does this certain niche of deals. I get really good real estate deals and private equity and venture. I just get all these cool deals. And I go, hey, you sound like you do a lot of investing stuff. If I ever get a good deal across my desk that I can't do, would you like me to send it your way? Boom! Right there, 9 times out of 10, the person will respond and say, well, yeah, I would love to. Who doesn't Want to look at a good deal, especially if you have no incentive, no motivation. You're not making money on it. It's just literally, if I see good deals, I'll send them your way if you'd like them. 9 times out of 10, I get a yes and I go, well, great. Well, give me your email and I'll put you on my little list and I'll make sure if I get a good deal in a certain area, I'll send it your way. So, I grab their email, very non-intrusive. Phone numbers, I feel like gets more intrusive and if you're getting a great relationship, great. You can trade phone numbers, awesome. But an email is a very easy ask. Let me get your email. I actually take their email and I put it onto a smaller list that I have of people that I'm nurturing. And guess what? Literally, it's true because I run a fund and because people know that we have money in our funds. I do get a lot of deals. So what I start to do after the event is over, I start to actually send them deals. And over the next 3 weeks, over the next month, they start to see deals from Bridger. Now, I don't bug them too much. They tell me no, I'll obviously stop. But I really only want to send them good deals. And what happens over the next few months, they start to recognize, well, Bridger, is the deal guy. Bridger's always got good deals, he knows what he's doing, he is definitely the deal guy and now in their mind, I've moved from a different category of just some guy I met at an event one time to oh hey, this guy actually has good deals and is maybe somebody I want to work with in the future. Now, at that point after a few months, I will then say hey, I've got a pretty good deal, it's called my fund and we're actually looking for investors and here it is, right, if I feel like the relationship's to that point. Now, if not, I'll just keep nurturing them and we'll invite them to the next thing or whatever, we'll keep Working on that relationship. But boom, that one line, hey, can I send you good deals? Has changed how I've met people at different events that I feel like would be potentially a good investor. All right, so that's number 1. Now, number 2, if that's like I'm talking to a person that's just not a good— just doesn't seem like a good fit or that maybe isn't right. Number 2 to try to nurture a relationship with someone is the second offer I have because again, I want to extend this meeting beyond just the first meeting we've had. I go, hey, You're actually super interesting. I love hearing your story. I actually have a pretty good podcast online. We interview people like yourself. I think you would be a great fit for our podcast. Would you be interested in coming on our podcast? Boom, people, there you go. Podcast is one of the easiest, easiest ways to get people in your network. And the best thing about podcasts is there are no metrics on podcasts. People have no clue how big or how small your podcast is. Let me tell you a quick story. I was actually a student at Brigham Young University, BYU. At the time, I was this young, hungry little great student ready to go, and we had a guest speaker come to one of our classes. He talked, he had this venture-backed company, their billion-dollar valuation, incredible. And at the event, there's 400 kids there, and a bunch of kids are trying to talk to him, take pictures, all this kind of stuff. I come up to him at the end, I go, hey, I loved your presentation. My name's Bridger. And at the time, I was doing— I was an intern in another startup business and they had just launched a podcast. And I said, hey, my company, we've got a podcast. We would love to have you on as a guest. And guess what he did? He said, Bridger, I would love to be on. Here's my personal— here's my business card. Let me write down my personal number for you. Pulled out his pen, writes down his personal number. I got his personal number out of 200 kids that were trying to talk to this guy. Wow. I think I was the only one that got his personal number and card because why? I had a show. It wasn't even my show. It was the boss of the company I was working at, his show. They had a podcast. People love to be on podcasts. People love to be interviewed. I personally have brought people on my show that we have gained a huge rapport for one another during the hour-long interview in a podcast. And I've challenged every one of you guys, you guys should go start a show. Start publishing. Do 20, 30 episodes, practice, and then start inviting guests on your show. It's a really great way to grab someone, again, at a party, trying to convert somebody, grab them and get them on your podcast. Okay, is this making sense? You guys following along? So fun, deals, podcast show. Again, if this is helping you guys out, if you can hit the like button, apparently that helps the YouTube gods, whatever, to promote this video and make it go whatever. That'd be really great. Anyways, that's what my YouTube guy tells me, all right? And he gets mad if I don't say it in these videos, so here you go. All right, on to number 3. Again, I'm— these are 3 ways that I have found are successful. There are probably 20 other ways that are better for you. These though are battle-tested by me, 3 proven ways that I've been able, again, converting an investor to someone that I can close. The 3rd thing I do— now this takes a little bit of grit and a little bit of know-how. I don't go to this a lot, but if you can pull this off, it's a great way to bring in a big fish. I will ask for some type of Mentor-mentee role. I will want to be mentored by this person, whoever it is. Now again, this is touchy because if you just go to somebody and say, hey, can I pick your brain? Can I be mentored by you? With no specific ask or reason, no agenda, what you're essentially saying is, hey, I don't really have a plan, but can I take you to lunch? Can I pick your brain? I think it's one of the most frustrating things. I get hit up all the time, Bridger, can I take you to lunch? Can I pick your brain? What you're telling me is that you want me to come for an hour, sit down with you, and you have no agenda, nothing really to talk about besides I just want to just pick your brain. That's a very low value transaction, especially for one of these guys that's worth, you know, $10, $20, $30, $100 million. For them to give up an hour of time with no agenda just isn't going to work. So what I do here is make something very specific. I say, hey, I'm running a business right now. We're trying to go from 7 employees to 20 employees. And I— obviously, you've done that in your business. You've done very well with it. Is there a time we could hop on a 15-minute Zoom call? I would love to hear your advice for me trying to go from 7 employees to 20 employees. Very specific ask, specific timeframe, a Zoom call, very easy to hop on. They don't have to drive somewhere, meet up. I tried to make it as easy an ask as possible. Again, you got to feel this out. This does not work for everybody. You got to feel this out. But if you're going to do this, Make sure it's specific. Make sure you show some promise. Pretty much every high net worth person I know loves to mentor young entrepreneurs. However, they only want to mentor entrepreneurs who are actually hungry, who are actually going out and doing stuff, who are actually going to take their advice and make something happen with it. And what'll happen is after they mentor me a little bit, I will over time say, hey, can you look at a pitch deck I have? That's another ask I always do. Hey, I'm actually— I'm out raising money for this fund. I know you've been pitched by hundreds of people. Can I give you a mock pitch and I would love to hear your feedback on our pitch? And what they do is they listen to your pitch, they give you some great feedback and actually, if there's not a lot of pushback, you go, hey, we're actually doing this fund. Is this something that you would potentially be interested in? Bam! Now they are moved over to the 3rd quadrant. Okay, is that making sense? So, maybe go the fund route or deal route. Number 2, maybe go the podcast route or maybe number 3, go the mentor route. Now, those are my 3 most successful transitions from meeting someone to actually developing a relationship with this person. Again, we're going from getting in the room to converting to now finally let's talk about closing the investor. Now, number 3, closing the investor. Now, we've put out other videos on this. I'm not going to go crazy in depth about this, but this is when you're formally getting in front with a pitch deck usually. You're going to go through your pitch. You're gonna have your team. You're gonna answer their questions. You're gonna talk about your problem, your solution, why your fund is the greatest thing on planet Earth. And how you're going to find asymmetrical risk. Now, typically what I do when I close an investor, I say, hey, here's my pitch. I go through the whole pitch. I will ask them typically for a soft commitment. I'll say, hey, I know you got to have a legal team look through your docs, all that kind of stuff. But I say, if everything checks out, just like I'm saying, if your legal team approves it, all this stuff, your wife likes it, all that kind of stuff. If everything checks out, can we put you down for $500,000? I love that offer inside of a close because It number one brings up objections, that's where the conversation begins. Number 2, you've now put a number in their head. Stephen Schwarzman actually gave this advice, said when you're pitching an investor, he's the founder of Blackstone, raised a billion dollars on their first fund and now one of the largest private equity funds in the world. He said give your investors a number to go after. Can we put you down for 500 grand? Can we put you down for a quarter million? Can we put you down for a million? Can we put you down for $25,000? It gives them a number to work with of what's the range that they're looking for. Now, I like to present it if everything checks out, so it takes away the due diligence piece. But what I'm telling you right now, if at face value, are you interested enough to give me a verbal commitment for $500,000? That's where the conversation begins. And that's where you can answer questions, get into objections. If you get a no on an investment, you need to know exactly why you got a no. Nothing's more frustrating than getting a no and not knowing why you got the no. Because then you can't learn from any of the— you know, when you pitch somebody and they tell you no, you better know why they gave you no. One of the easiest ways to do it is again approach with the soft commitment, and then what you'll do, you'll get those soft commitments together. You say, hey, look over the legal docs, we'll come back, we'll talk in another week, and then we'll close things up. After that, if they confirm again, you'll have them sign subscription docs, and now they are fully in your fund. We can talk more about closing the investor. You can do Zoom calls. There's a lot of different ways you can go about it. Depending on the type of fund you're doing. But those right there are the 3 stages of raising capital. Again, number 1, getting in the room. Number 2, converting that person to a warm lead. And 3, closing the investor. If you like what we're putting out, we put out a free course below in the link. If you guys want a free course on funds, go check it out. You can like and subscribe the video. That helps us out a lot. Thank you guys so much. I'm Bridger Pennington signing off. See you guys in the next one. Bye. Goodbye.