Live Fund Workshop

this morning because I think it's just so pertinent to all of our businesses right now. I think I heard from a good investor recently. He's like, 30 years ago, we could just all focus on the micro. You could be a micro investor, just meaning you could just focus on Lehi, Utah, and what happens in Lehi, Utah, and you could make money and do well. We've now moved to a much more global economy. What happens in Washington, D.C., or in China, or in Russia, affects our businesses. You have to understand macro. Furthermore, if you're going to raise dollars, we're going to talk about funds today, investors want to know what your outlook is on the macroeconomic situation. Even if it— maybe you don't believe it affects Sub2 and getting creative finance homes done, right, or your software business, they still want to know, what do you think about it though? How do you think the Russia-Ukraine war affects us right now, or bombings happening in Gaza? How does that affect supply chains? How does it affect routes? What, what would that do for a, a fund that you're setting up Right now in Lehi, Utah. Does that make sense? So I think it's pertinent to understand what's going on and and give a sense. So we're going to talk a little bit about tariffs, Doge, and Fed rates that are all happening. I mean, this week and next week, we had an FOMC meeting yesterday with the Federal Reserve. So we're going to talk about all that right now. So Fed rates and market pricings yesterday. What is it today? Friday. Two days ago, Jerome Powell, Supreme Leader Jerome Powell, got up and and kept rates steady and plans to keep rates steady. If you guys have looked at this site before. This is the CME FedWatch tool. So can you even see that? Is that way too small? I'll explain what it is then if you probably can't see it. So what you're seeing here over on this side, you'll see a date. This says 5/7. So this is May 7th, 2025. This is 6/18. So June. So this is the May meeting, June meeting, July meeting, September meeting of the Fed. This is what derivative traders on Wall Street are, are predicting or pricing in what will happen with rate moves. So a lot of people can guess, I think the Fed's going to cut rates. But what are billions of dollars betting on? They bet this thing moves every single day. So I pulled this yesterday or yesterday afternoon, last night for the May meeting, 85% probability or chance of no change. Again, in May we had no change, just barely. And again, no change. June, 62% chance of a change by July, 48% chance of a change by 25 basis points. So really not much. The market has really not priced in much movement. This chart six months ago was pricing in significant rate cuts in 2025. It is now adjusted for really rates to be higher for longer, which is Jerome Powell kind of talked about. They're going to wait and see kind of a thing. Now, these change every day though, depending on new data, new stuff. This can change overnight, but that's currently what the market is pricing in, at least as of last night. Furthermore, this is man, you guys probably can't see this at all. So this is the Fed's projections for rates. I'll just explain this chart, but it's essentially saying the same thing of. Last year they were predicting more cuts this year, and now they're not going to do those cuts. Now, why is that significant for us? This affects every, every part of our market, right? The Fed funds rate, how much you can borrow and lend money at, is huge. This is— you've seen mortgage rates for real estate have actually gone up, but they cut rates in September.

You see that?

It actually went up. Mortgages went up, and you're like, why would mortgages go up? Um, this is, uh, you know, this ex— you know, we've seen At least feels like pretty expensive money right now in the market to get a mortgage. I got a mortgage on a house last year. We moved to our new home. It was— I got a 7.6% interest rate. I think I bought the peak of interest rates, which I'm okay with. I actually want— I'm like, I'll buy the peak rate because that means there's not as many buyers, so the price will come down, right? I was like, you can date the rate, you can't date your purchase price. So, but I'm like, the rate hasn't moved much since then. I bought it in June, right? We'll see how, uh, where things come here over the next little bit. Now, this is— hopefully you can read this. Trump tweeted this yesterday. The Fed would be much better off cutting rates as US tariffs start to transition and ease their way into the economy. Do the right thing. April 2nd is Liberation Day in America. Anybody know what's happening April 2nd? You guys following this? April 2nd is Liberation Day in America. What is he talking about here? Tariffs. Okay. Anybody watch the State of the Union address? There's been a lot of tease on tariffs. There was tariffs on, tariffs off, right, with Mexico and Canada. April 2nd, Trump is looking to put in tariffs on everyone who puts a tariff on us. They're called reciprocal tariffs. Now, so let's see, I'm gonna pause on this, or yeah, I'll come over here. So previous average, I did some research, I did a full research study yesterday on this, on tariffs. So previous average tariff for the US, just in general, is 1.5%. Which is pretty, I mean, pretty small right now. If they do all these reciprocal tariffs, it'll move to about 4.8%, so about a 3.5x increase. Reciprocal tariffs on other countries who tariff us, that's the plan. So on April 2nd, anyone who puts a tariff on us is going to get the same exact tariff back on them. Okay, so what are those tariffs? And furthermore, Canada and Mexico tariffs are going to go into effect on April 2nd, and their reciprocal tariffs and It's with the border, so they've got to help secure the border. That's the other caveat of the Trump plan. Now, we don't really know though. This is all what the Trump administration is putting out, but we're going to see April 2nd what really happens. But this is what they've told us so far. You guys following along? Is this making sense? So April 2nd is back to this liberation day in America because his his plan is to reprice a lot of these trade agreements. So now some people are like, well, that's why is Trump being so mean, right? What are these tariffs? He always says we're getting ripped off by other countries. What does he mean? So let me give you a few examples here. This is India to the US right now. India charges a 50% tariff on motorcycles, like Harley-Davidson motorcycles, 50%. 150% on whiskey and alcohol. So, all of our Budweiser, all those American-made alcohol products, 150% tariff. They've done this for years. 20% to 70% on almonds and apples. There's a lot more, I just picked a few here. Europe to the US, 10% on automobiles. We only charge 2.5%. So if you import a Volkswagen or BMW, 2.5% tariff. If we send them a Ford, 10% tariff, 5 times bigger than our tariffs on them. 25% on whiskey, 25% on jeans, like Levi jeans, 25% on cranberries and orange juice. Okay, this is what Europe is currently charging us, and they've done this for years. I think a lot of people don't— me, even myself, I didn't realize this till Trump pointed this out. I'm like, oh, I didn't realize. This is happening. Let's go to China to U.S. 25% on soybeans, 72% on pork products. So if you're a pork manufacturer in here and you're trying to export, we have a friend of ours he does this. 72% tariff China currently charges on our pork people in the United States. 25% on automobiles. You rarely will see a U.S.-made automobile in China because of the high tariffs put on by China, and they have their own you know manufacturers, and we do the same thing though. We we don't let we we don't like having their You know, BYD cars in the United States, 25% on liquefied natural gas, and 25% on coal. So, the plan is April 2nd, we will do a counter tariff, 25% on their coal, 72% on their pork. How do you guys like it? You're tariffing us, we'll just tariff you right back. A lot of people are like, well, what about Canada? Canada's our partner. A lot of— my mom is Canadian. I have all my families in Canada. I love Canada. I did not know this till last week. They charge us 270% on dairy products.

What?

270%. They've done this for years. 25% on US steel and aluminum and 10 to 25% on prepared foods, chocolate, things like that, tariffs they put on us. Mexico charges us 10 to 25% agricultural goods. You see industrial goods. Turkey, I put another one on here, 120% on automobiles. Okay, so this gives you a sense of reciprocal tariffs that are going to hit next week. What is this, a week, a week from Tuesday? This is what's going to happen. Now, there's been a lot of rhetoric, right? You've probably seen some of that in the news of countries, this is bullying or whatever. Trump's all— I believe the current plan that he's put out is saying, whatever you do to us, we're going to do back to you. And it's looking like a negotiation tactic to say, hey, if you lower— Canada, drop your dairy tariff and we'll drop ours. We're going to put ours up at 270 just like you are, and if you drop yours, we'll just drop ours. And so that we can have free trade across countries. Does that make sense? So we'll see how this happens. This is going to shake the world, I think, on April 2nd. First, now what we've seen so far, the Mexico tariff and Canada tariff that went into effect. Remember this? And Justin Trudeau was all hard. And then they, they backed down in about 12 hours or less. Mexico backed down about 18 hours or less because of the effects of tariffs. And Canada, one of the province Leaders came back, said we're gonna put another tariff on you guys, and he just Trump just tripled. Fine, we'll just triple the tariff. Two percent of our economy depends on Canada. Twenty percent of their economy depends on the United States. So yeah, we can play this game all day long. You want to play this, Canada? And they dropped that. They dropped their threat within hours. Right? This is it's really interesting to watch right now. Geopolitical events happening like we've never seen this before, by the way, which is just it's just it's kind of crazy. Now we can go complain on Twitter. We can be mad or whatever. Honestly, there's nothing Bridger Pennington can really do about this. So I just— how can I make money? That's where my brain goes. Well, how can I make money off this? How can I do well off this? I don't know if anybody else have that same thought. I guess we could go— you can go vandalize stuff and be crazy. But like, okay, the world's shifting. How do I prosper? Right? Like the wealth gap is dividing. I know that's— there's a lot of stuff we can try to help out. But like, how do I end up on the wealthy side? You know, if it's going to divide anyways, I might as well end on the wealthy side, right? Now, all that being said, if you want, like, there's stuff we can do. There's things we can do to help people. And one of the reasons we're here today doing this, we have a mission at Fund Launch to democratize Wall Street. We want to make this kind of stuff known to regular people, like myself included, people in Utah. You know, we're not in Wall Street. We're not in some Ivy League tower. We're in Lehi, Utah right now. Can we learn kind of some of this stuff? It's like high finance on Wall Street, right? So a couple of— is this interesting, by the way? Is this useful? Kind of cool. Okay, a few other things that are happening right now. Obviously, you guys have seen the Doge cuts. Been a lot of rhetoric around this. This is kind of the— and you don't— you probably can't read these charts below, but the currently our GDP debt deficit to GDP ratio has skyrocketed during the Biden years. So let's just call it COVID. Since COVID we were historically at around 2 to maybe 3%. Deficit to GDP ratio that has jumped to around eight percent. This is the the when you I just listened to an interview with the Treasury, the brand new Treasury Secretary, with all the people at Doge, people the new people they all are talking about this. Let's see if I have a picture here. Ray Dalio right here just put up he's put out a whole new book and he's like we have to get this down now. The United States government is on life alert. And we have a hope if Doge can cut enough and we can increase— it's like, think of it just like a business. If we can cut enough spending and get enough revenue in, we could get this 2% back to this 2% deficit to GDP ratio. We maybe will save our country. We are in what they call a death spiral. If you look at private equity world, the number one thing that kills companies in private equity is what they call a debt spiral. where you have to borrow more debt to pay off old debt, which is kind of what we're doing right now, right? And I'll go back a little bit. During the Biden administration, they issued $6.4 trillion all in short-term Treasuries. And it was this marvel. I was like, why are they doing this? Why is Janet Yellen right here? Why are they doing all in short-term? Why don't we do some medium-term, some long-term debt? And a lot of this was done at really low rates. All those are going to be refinanced this year at the current market rate, which will be, right now it's 4.5%, but there's usually a little premium on that. We have to refinance $6.4 trillion of treasuries this next 8 months. The Trump administration has a huge problem on their hands. We'll see if they can solve this. So if you look at the Trump plan, you've probably seen all the dovish cuts with USAID and other stuff. Can they cut enough spending and can we increase enough revenue? They need to cut on— it's looking, but depending on who you talk to, between $800 billion and $2 trillion of annual budget to get back to a 2% deficit.

Okay?

Again, Ray Dalio put out his new book. He's like, we are on Life Alert right now. We have to do this now. Like, it can't be done next year or the year after that. I was with Tony Robbins 2 weeks ago in a group about this size. Kind of interesting. So Tony shows up. We got all a chance. Any of you guys follow Tony Robbins? Know his stuff? So it was very interesting. We were in this small group. Dean Graziosi's there. Pace Morby's there. A bunch of other very cool figures are there. We're in just a small group and we're talking to Tony. And he gets up just like this on a microphone. He's not doing the big rah-rah thing. He's just talking to us like normal humans. He's like, I was just with Milken, the bond king from the '80s. I was with Ray Dalio. and about 7 to 10 other billionaires that are all in the financial space. He goes, they shared with me, they believe there is a decent chance the US will have to default on its debt or restructure its debt. So, if you own a bond and they say, well, that bond was supposed to pay you 4.25%. We got to— it's actually going to pay you 3.25%. Which would be— I mean, that would really change the sovereignty of the United States. He goes, there is a decent chance the next 18 to 36 months the US will have to do that because of all the short-term debt that Janet Yellen put on our economy in this last couple of years. The only way out— and Ray Dalio has been on a full speaking tour the last 2 months, roughly, talking about how crucial it is to cut to get down to a 2% deficit to GDP ratio, and there's a chance we're okay. Um, and, uh, so anyways, this is kind of interesting. I saw this quote from on Twitter that I loved. I thought it was funny. Only Trump could make liberals hate electric cars. Um, which I thought was pretty funny. I don't care what side of the aisle you're on, but that's funny, dude. That's funny. I don't care who you are, bro. Okay, we've seen a lot of hate on Tesla and Doge now, and I'll say this I, you know, they're not gonna do everything perfect, but if they can do 80% of it per, you know, well, when you cut a lot, you're not gonna hit everything perfect, but can you cut enough to get to this pretty soon? I, I, I'm all in support of cutting, you know, government spending. Um, now do it in the right way, do it the right, you know, the right fashion. But, uh, are they gonna make mistakes? Sure. But when you're doing that drastic of cuts, you're gonna make mistakes and maybe they can rebuild back from like a zero-based budgeting thing. Okay. Last thing I'm gonna share here. So if I was to summarize the Trump plan, now whether you like Trump or not, this is the plan that we're in. And I'll just say this, when Biden was in office, I was rooting for Biden, dude. I was like, I live in this country, I want Biden to succeed. I'm like, I'm in. Like, I didn't vote for Biden. You guys can probably tell that from just me, but I'm like, Biden got in. I'm like, dude, I'm rooting for the guy. I hope he crushes it. I hope he does well. I live in America. I want this place to be awesome. Trump's in office. I'm going to root for Trump. Okay, until next election cycle, like, what can I do about it? You know? I'm going to root for the guy and try to help, you know, see what happens. So this is the plan at least that they've put out. So over here you can see cut spending to get to a 2% deficit-to-GDP ratio. So cut. Increase government revenue. Tariffs from the Internal Revenue Service. We'll see how that works. Or just lowering other countries' tariffs. Increased minerals and oil production. They put a huge emphasis on that. And then they mentioned a gold card for immigrants. $5 million gold card that immigrants can buy. So increasing government revenue. Okay, so cutting, increasing, and then lowering rates. Trump's trying to really lower rates to stimulate the economic activity. Lower rates to refinance the $6.4 trillion of short-term debt to be refinanced this year. Our debt payments right now are greater than our military spending, right? Our interest payments this next year will be, I think, $1.2, $1.3 trillion. Am I rough on that math? Is that about right? Our defense budget's about $980 billion. Now, these are big numbers. To put that into perspective, we spend more on our military every year than the next 10 countries combined. That's how much we spend on our military every year, and our you know and our interest payments are that much higher. So that's the plan. And then finally, increase productivity, crypto and AI capital of the world. I run a crypto fund. You know we love that. We want to make a lot of innovation happen in the United States. And then finally, encourage foreign investment in the United States. With Dave, we've already seen a lot of that: Saudi Arabia, Middle East, China, a lot of different groups putting huge foreign investment in the United States. So we'll see. And he wants this to be the golden age of America. I'm rooting for him. I would love to be in the golden age of America. Wouldn't you? Like, let's see if it works, you know? I, you know, the economic data that I'm studying, I'm like, man, this seems like a, it could be a rocky path in the short term, but I think will be a decent to amazing path in the medium to long term. So, we'll see how this works. Alright, was that useful at all? Okay, is that helpful?

Yeah.

Sound good? Okay, now, how does this apply to us? Like, what does this mean to me and you? So, let's talk about that, and then I wanna share from you guys and hear from y'all. Let's talk about emerging fund managers. As you guys know, I run 2 investment funds. We manage roughly, I think combined about $50 million AUM, something like that right now. We just closed Fund Launch Partners. We raised a $30 million fund. We oversubscribed at $33 million, which is pretty exciting. We just did that last week, which is pretty awesome. What does this mean for us? Like why do I get up on— why are we even doing this meeting today? Like what does this make sense? Emerging fund managers, you probably can't see this, but this chart shows in a lot of cases outperform larger funds statistically, like by performance metrics. Smaller funds— this is excess returns, additional return above private equity, real estate, venture capital— because— and the meaning for this is a lot of times emerging fund managers can find niches that are inefficient and small that have alpha to be grabbed. Once you—

this is—

this study's done over a billion dollars. So once funds hit over a billion dollars It's much harder to get a return when you're managing like $3.5 billion. It's much harder to get a 20% return managing $3 billion than get a 20% return when you're managing $200,000. Does that make sense? Right? Just because the dollar amounts are so much bigger. We have a really interesting opportunity as emerging fund managers, micro fund managers in this space to capitalize on what's going on in the market right now. Now, as well, some of you guys have heard me talk about this before, but 3 funds are currently taking over the world. Vanguard, State Street, and BlackRock combined, these groups manage roughly $22 trillion of assets. $22 trillion, which is just bonkers. I'll share a few things here. They are the top shareholders in, I believe, 492 of the Fortune 500 companies. They are the top 2 shareholders. And they just bought the Panama Canal. BlackRock did.

Yeah.

I mean, if you're wondering who runs the world, these people run the world. Okay. Larry Fink at BlackRock runs the world. And Lincoln was just with him actually last week at an event, a small kind of private event. It was pretty interesting. Now, how they do this, they run a lot of times ETFs or funds that investors, people put money into, and then they go buy Apple stock or whatever, but they hold the voting rights. What's the job of a CEO, a Fortune 500 CEO? What's the job? Return shareholder value, right? Or increase shareholder value. So, if you're the CEO of Apple Computer, you're Tim Cook, and your biggest shareholder comes to you, BlackRock, and says, hey, Tim Cook, we love what you're doing, but we need for you to push an ESG initiative. What's the job? Or else, we're gonna divest and sell your stock, and that'll cause your stock to plummet, and we're gonna pull out of your stock. Well, if you're Tim Cook, what do you do? You follow what your biggest shareholder tells you. This happened about a decade ago. All these companies signed up for ESG initiatives, like all at once. Did anybody realize, like, it was like, how did they get all of the Fortune 500 companies, like overnight, Walmart, everybody to do ESG? Now, whether you like ESG or not, I don't care about that, but it's just how did they do that? Oh, it's because BlackRock mandated it. They said you cannot be in our portfolio unless you have an ESG initiative in your company. So all these companies come out with it, which is environmental, social, and government. So they had environmental things or social things or governance things that they were gonna go like do good in the world things, which is some of them turned out good. BlackRock has now backed away from that in about 2019. They said this actually turned out horribly. It didn't go as intended. We were trying to do these good initiatives and it turned out they turned into these, all these strange, weird initiatives People were like moving money around in weird ways and just didn't work out. So they took that away. But isn't that interesting that one company can control the Fortune 500? Another way to look at this, some of you guys aren't in the equity markets. Look at real estate right here. 1 in 7 homes in 2021 was purchased by Wall Street. 1 in 7. 2022, 1 in 5 homes were purchased from Wall Street. 2023, I have not found the data. I don't know if they didn't publish it, but the estimates are it's 1 in 3. homes were purchased by Wall Street in 2023. 1 in 3 residential homes bought up by big firms on Wall Street. Isn't that interesting? The mortgages, though?

The actual—

not the mortgages. No, mortgages are owned by whoever. That's been done for years. They're actually coming in bidding on homes. If you wonder where are all these cash buyers coming from, they are big firms on Wall Street. They're buying hundreds of thousands of single-family homes, farmland as well. Bill Gates, one of the biggest farmland owners. A bunch of big firms are coming buying farmland. It's very interesting. These big conglomerates are buying up these ecosystems. I'm gonna go faster for a second, but you're seeing consolidation of all these TV news, food, food production, accounting, car washes. And you're seeing new places starting to get consolidated right now. Car washes, Amazon sellers, dentists, social media accounts. We have a group in Black Card right now. They're buying up as many social media accounts as they can buy. You don't tell the difference, but it's owned by one group and they have, I don't know, let's call it 20 different social media accounts that all post whatever they want them to post. Very interesting. Bloomberg did this. What's his name? Michael Bloomberg. During— remember when he ran for president? He was paying tens of millions of dollars to buy up meme accounts on social media to push memes that would kind of promote his campaign. Very interesting strategy.

You know, what's—

whether it's good or bad, just be aware of what's going on in the world right now. There's a video here. I don't think the— can you guys hear that?

Some members of the media use their platforms to push their own personal bias and agenda to control exactly one thing, and this is extremely dangerous to our democracy.

This is extremely dangerous to our democracy. This is extremely dangerous to our democracy. This is extremely dangerous to our democracy. This is extremely dangerous to our democracy.

This is extremely dangerous to our democracy.

This is extremely dangerous to our democracy. This is extremely dangerous to our democracy. Isn't that freaky? Anybody seen that before? That came out a few years ago. It's, it's, it's all— I've seen it 100 times, like, and it's always freaky every time I see it. I'm like, man. But this happens because of the media conglomerates, of who owns the media. It's about 4 companies that own all media that me and you watch. And here they are. If you zoom in on that, you'll see all the brands of every single TV show and everything you see underneath there. Most of the world is being consolidated. Here's another one. Disney actually bought 21st Century Fox. So there's the 5 media giants right there. You can kind of see. I'll go fast through this. This is food production. These are the few brands that pretty much control every piece of food that me and you eat and drink. Furthermore, I think it's phenomenal what RFK hopefully will do. We'll see. I love the plan. Let's make America healthy again. I'm all— again, I'm rooting for him. You know, like, let's go. That's like one of those things I'm excited about. Like, let's get out freaking Red 40 dye out of our stuff. I go to Canada or Europe and the food is way different, and you feel good. It's very interesting. Here's 14 car companies that own pretty much every car brand. I'll go quick through this, but you see FCA owns Fiat, Chrysler, Jeep, Ram, Maserati—all the same company owns all those cars. Down below, the Volkswagen Group owns Audi, Skoda, Bugatti, Bentley, Porsche, Volkswagen—all the same company. So if you're like, ah, screw my Volkswagen, I'm gonna go buy a BMW or an Audi. or a Bentley. It's all the same company, you know, they're all the same parts. So how do we play in this game? Like, what do we do about this? We have seen this major rise of what we call the retail investors over the last few years. So if you go down 2010, about 11% of equity markets were retail investors. Like, that's regular Joe kind of investors. In 2023, it's 25% of equity markets. We've actually started to increase a lot of our shareholder of these actual equity markets and moved quite a bit of them. So we call ourselves the Wall Street Rebels in this community, in Fund Launch. Some of you guys are here, have been in this before. We call ourselves the Wall Street Rebels for this thing because we have actually seen small funds start to move the market in very significant ways, and Wall Street's had to pay attention now to what retail investors are actually doing in the markets. We've moved things quite a bit. So I'm gonna, I'm gonna jump through this again. There's a couple major opportunities right now. Dry powder is at its highest levels. This is undeployed capital from private equity firms. This is showing $13.1 trillion of big private equity firms. This is their dry powder, meaning money they haven't deployed yet. If you raise— we just raised $30 million for Fund Launch Partners. We haven't deployed it though. We've only deployed, I think, $3 million. We would have $27 million of dry powder, undeployed capital that we need to deploy. Does that make sense? This has hit like all-time highs. It keeps hitting all-time because private equity firms are looking. They are looking for people like us to build great companies or conglomerate really cool companies that we can go sell to bigger groups or we can just keep growing ourselves. But there's a lot of capital waiting for good deals. It's kind of what I'm trying to show here. Furthermore, baby boomer wealth transfer. We're seeing right now the silent generation, which is older than the baby boomers. Is, which you never hear about because they're silent. Oh, okay, there's my joke for the day. The boomers plan to pass down $84 trillion through 2045. Just a stupid amount of wealth plans to be— some of it's direct to heir, some of it wants to be divested or sold to businesses. Anybody bought a baby boomer business or seen this model of baby boomer business? A lot of people right now are looking to buy, you know, mom-and-pop accounting firm down the— the guy's old and they just want to get out of it, and you can do creative finance and you can actually buy them for $0 down. You just say, hey, we'll run and operate the business for you, we'll do profit sharing with you over the next 24 months, we'll pay you out your retirement, but give me ownership of the business. Great, I'll have some younger person come run this business for me, awesome. We're seeing huge wealth pass-downs from the baby boomer generation down to these younger generations. You guys feeling good? Is that okay? Okay, I wanted to share some of that. Now we're going to dive into funds, and then I want to talk about your businesses as well, and what you guys are doing, and we can just whiteboard stuff out and have some fun. Awesome. Does that sound good? Okay, real quick, if some of you guys don't know who I am or why am I up here, like why do I have the microphone? It's probably a bad idea to give me the microphone, but anyways, I have the microphone so I'm talking. But just real quick on me, just my background. I've ran 2 funds through Blackbridge Holdings. I'll share that story in a minute. We run Fund Launch as well. We have 100,000 students in Fund Launch now, which is just bonkers. We've done multiple thousand-person events, and then I run Ugly Unicorn and Fund Launch Partners, 2 investment funds right now.

I'm excited.

Ugly Unicorns, roughly a $25 million equity hedge fund in crypto right now. Crypto's been all over the place. We can talk about crypto if you guys want. It's been very interesting to be a part of it. It's been— we've done— it's been an awesome fund to be in though. It's been really, really great. Fund Launch Partners, we just closed our final round, raised about— I just mentioned $30 million on that, and we're doing GP stakes. We're actually investing into our members' funds that come out of Fund Launch. So we help people launch funds, and the best funds— we looked at 900 funds last year. and we invest into 6. So we have a huge pool of funds coming through Fund Launch that we put together, and we'll invest in the best ones. We partner with them and sit on their board and their team and help them grow. So we did 6 last year, we're looking to do 10 more this year. Does that make sense? Cool. So, and then there's me and Mason, we're co-founders of Fund Launch. We've got decent following and stuff. Mason's in the back here, you can wave Mason, say hi. There he is. And then this is my family. This is my wife and our son Jonah. We just had a baby. What six weeks ago? So kind of fun. I was up through the night just barely. Probably see it. I got a Celsius here. We'll see if I have to crack it open in a minute. We had a crying baby last night, but it's fun. So that's that's Jonah. I don't have the picture of the baby on here. We don't have an updated family photo, but that's that's us. So okay, let's do this for a second. Let's see. Well, I should do this. Yeah, I'm gonna jump over. So house event today. What I want to do is this is our first time ever doing something like this. Like a workshop style, just come hang out. I want to spend most of it, so that was my spiel, just barely. Most of this I want to share about your funds, what's going on in your business and your stuff right now. Does that sound good? We just whiteboard stuff out, we can answer questions, we can talk about what's working or not working in your business. Sound good?

Sounds good.

Okay, let's do this. Pull up, do you have something to write with? Anybody have something to write with? Okay, answer this question for me, and then I'm going to switch over here. All of you came here today. You spent some time out of your day. I actually, which I really respect that you guys came here and wanted to do something together. Write down what is the number one problem. We're going to talk about financial things, I guess, right now. Number one problem in my business. What is the number? And you can maybe make three problems, but try to get down to one. What? And write if you can write or get out a phone. Take a note. We'll do a few notes here, but if you can participate with me, thanks to you guys for leaning in. What's the number one thing, you know, I came here this morning, I'm looking to solve, right? What's a big problem in my business right now? It's just, maybe it's keeping you up at night, it's bugging you, it's just, if we could solve this one thing, it would really unlock. And be more detailed the better, okay? So I'll give you 30 seconds here. They say half of solving a problem is just identifying it clearly. So do that for me. Number one problem in business right now, what's going on? And then maybe check. I don't know why it's not working. Maybe come help me, Kendall. Number one problem in business. Now let's do this. Below that, Let's write down current ways that you've tried to solve this problem. So keep going. What are the current ways that you've tried to solve this problem? And maybe you haven't tried to solve it yet, but what are some ideas? Write down some ideas on how you could solve this. And thank you guys for participating with me. I think I have a solution. Number one problem in your business, and then how have you currently tried to solve or tackle this problem? All right, you guys got something?

Yeah.

Give me some nods if you got something written down. If not, if you're still going, just keep going. But give me some— give me a nod. So one more time, give me a nod if you're ready. Okay, I'll give you guys 30 more seconds if you people are still going. Don't check your bracket or Twitter, okay? Don't be texting people back. Try to be here with me if you can. All right, let's do this. Okay, you got something written down? Stand up for me. Just stand up, get some, you know, shake it out a little bit. Stand up, everyone stand up, stand up, stand up. Stand up, shake it up a little bit, kind of move your shoulders a little bit. Everyone stand up. Most of you, I'm guessing, came— well, actually, we'll just stay together for a second. If you came with somebody, maybe go find someone different around you, but get into groups of 3 if you can. Get into groups of 3, and you're like, frick, Bridger's gonna make me talk to people. Yes, I am, okay? So, introverts, I'm sorry, you gotta meet some new people. Say hello, find a group of 3, get to know their name, make sure it's a group of 3, not a group of 2, get a group of 3, grab somebody, if you're an extrovert, grab some people, let 'em join. It's okay if you're a group of 4, but no, yeah, grab a group, okay?

One up?

Yep, make a group of 3. Let's see, you guys get over here. Alright, what you're gonna do is share what you wrote down. Hold on. Come back, come back, come back real quick. Sorry, I should've explained before we got going. You got your groups of 3? My bad, my bad. We're going though, we're good, we're still alive. Okay, you got your group of 3? Perfect. We're gonna do, let's say whoever's got the most facial hair goes first, okay? Most facial hair goes first, alright? So, if you shaved, you're in good luck. I want you to share, if you're comfortable, you're here to learn, you're here to get some stuff down. I'm not comfortable. Share what your biggest problem in your business is. Hold on. Shh. Okay, you're gonna go first. You're gonna share what your biggest problem is in your business. You're gonna share quickly how you've solved it. The idea though is not for you to talk, okay? The idea is for you to quickly share what your biggest problem is, how you've tried to solve it, and then let the other 2 people think tank your problem for a second, okay? So we're gonna give each person about 4 minutes, 5 minutes per, let's call it 5 minutes, I'll put a little timer up there, 5 minutes per person. So if I went first, I would say the first, I would just say, hey, my name's Bridger, my biggest problem in my business is X, I've tried to solve it with A, B, and C, I need your guys' help. Let's spend the next 4 minutes and 30 seconds answering that question. The other 2 people can think tank your problem for you, and then once you're done with that person, you rotate and the next person goes. Sound good?

Sounds good.

Okay, ready, 3, 2, 1, go! Longest facial hair goes first. 30 seconds and then rotate. 30 seconds, then rotate.

30 seconds.

Okay, switch. Go to person 2. Person 2, switch. Keep going. Sorry, the music's glitching out. Keep going, keep going. 2 more minutes. 30 seconds, 30 seconds, start wrapping up, 30 seconds. All right, come on back. Start wrapping up. Come on back. Come on back.

Thank you.

Find your seats. Come on back. Come on back. All right, come on back. Find a seat. Find a seat.

All right, y'all.

Pretty fun. Anybody meet somebody cool?

Yes.

Yeah? Come on back, y'all. Come on back. Anybody want to share someone, maybe an insight you got, or someone cool that you met that you want to highlight them? I'm just going to open, open-ended. Anybody want to share? Yeah, Ethan, stand up for us. Let's see, I think we'll have here, but yeah, which one do you want to share?

Actually, first, this is the first time that Useful Responses has ever happened in this type of event, and—

Clap it up for that.

That's pretty good.

Who was your partner?

Um, Eric and— right as you asked—

Eric and Jake.

Eric and Jake. Okay. Thank you. Pretty good responses then.

So well done, Eric and Jake.

Okay.

And Eric was pulling all the weight. Yeah.

Well, the thing I appreciate the most about their responses is you can tell from where they come, their principles and the ethics that they bring to it. And everybody I've met and known who's associated with Fund Launch has those. That's who you attract. You could have the sharks, and in this case, it's a negative mindset. You could have the vulture mindset. They make money. That's fine. But you want to be able to look at yourself at the end of the day. And I know these 2 guys have that goal in mind as well.

What did they share with you?

What was useful?

They shared they was watching business. Yeah, what did they share with you?

My question was systems, and they went first to the trust place of, I'm trying to integrate the new acquisitions and the efficiency we bring.

Sorry, I'll put this on here. Systems into new businesses that you're acquiring, how to implement those. Is it more CRM, like all tech stack? Like, give us more detail on your question.

So the question comes from the base level efficiency that we bring to the acquisitions we have are those, yes, mundane tasks of that every business shares. That is a high cost for small business. If you have those shared ecosystems, the cost comes drastically down, but also your consistency and your predictability go up.

So what do they share with you?

And so going first to trust with the individual employees at the new businesses, investing in those individual meetings and those, you know, like looking people directly in the eyes of this is what I'm here. And here for, and what I got from it is basically the heart on heart of this is my motivation to join with theirs.

Interesting. So to summarize, making that really clear to the acquisition company where your heart is at and what you bring to the table with them and how you're gonna affect their business and help them grow from a more heart on heart approach, like you said. Very cool. I love it. Clap it up for Ethan, everybody. Well done. Let's go over this side. Anyone want to share something that you got out of this, or maybe highlight just someone cool you met in your group? Anybody want to share? Yeah, go ahead. Maybe have you just this mic short. Let's well, let's actually let's let's see just because we have people on on Zoom or whatever. See if we're trying some new stuff out here. Oh yeah, that's that'll work. Yeah. Tell us your name and stuff and what you're doing real quick, and then tell us what you got out of it. Okay, so my name is Scheidler Bennett. I have been doing franchises and debt for the last couple years, and We built a Crumble portfolio and then have looked at new opportunities and have had people say, we want to give you money, and I don't have any structure in place to accept the money. And to me, every time someone says, man, I'd love some exposure to franchising, and I don't have something to offer them, I just feel like I am just wasting opportunity. I'm not building a list, I'm not doing anything with that. So Isaac made a great comment where I've Really thought about this because I just set it up as a partnership as I was investing or as I was raising money for my stores. It's flipping it from looking for partners as instead looking for investors and giving them an opportunity to invest in and not to come be a partner. Just changing my mindset on that, which was really helpful for me. Yeah, I love that. What was your name again? Isaac. Isaac gave you that kind of thought? Yeah. Very cool. Scheidler? Scheidler. Scheidler? Yeah. Just really quick, quite a coincidence because I'm building a holographic communications, holographic telecom company. One of the problems I've had is, uh, the only—

Holographic telecommunication.

Yes, yeah. So a little bit more. So we, yeah, we can, we— yes, it is, it is. And so the problem I've had is that the only device that we could make it work on was a Chinese company, um, $380 glasses. But, uh, just had a lot Yep, yeah, it connects to your phone. So, so we could have this right now. Um, we could— you could have people at this event instead of having to fly here. They could just come here virtually, right, and still network. So, um, anyway, this guy here who I met, one of the first people I, I met here today, happens to have a solution that I can explore to make the glasses here in the country, which is the exact next step that I need to take. So that was pretty cool. Yeah. What was your name?

Nate.

Nate? Sorry, Nate and Fabian, and you sat next to him. That's amazing. I love that. Clap it up. Well done. That's sweet. I have a connection for you too. One of our portfolio companies is Monovo. They invest into SignGlasses. You've heard of them before?

SignGlasses?

SignGlasses. They made a heads-up display. They have patents out of BYU. They've now blown up. It's all for people that are deaf. So it's an automated AI sign language that pops up on their glasses. So when they're in class, they can watch the teacher. 'Cause they used to have to look to see the signer and then they'd miss the slides from the teacher. So it puts it, just auto-translates it right on the screen so they can see someone doing sign language for them. It's pretty cool. So they have that technology and they developed it in the US. So we can connect you with them. They're in Utah right here. They actually know the hardware. They have all the hardware done. Yep, they do all of it. Yeah, we can connect you to them. Very cool. Well, thank you guys for participating. Hopefully that was somewhat useful. Meet some people in this group. All right, let's do this for a sec. You guys still good? Energy okay? Feeling all right? You guys want to keep going? We can go a couple different directions here. I'll let the group decide. I've got a ton of content. I mean, we can just talk for days. I've got hundreds of hours of content we can talk about. I want to see what's most useful for this group. So I could, we couldn't, we can just go over what funds are, how funds are built, like fund structuring. I know some of you guys are looking to raise capital. You mentioned like the Crumble franchisee stores over here, Scheidler, right? mentioned like you wanted to build that. We can go through syndications and funds if we want. We could do some of that. We could talk more capital raising, at least my frameworks around capital raising. We can talk around how to analyze and underwrite deals. What would be useful? We've got a small group. Yeah. Definitely capital raising. Right now, the big thing is getting over the SBA loan amount, like $5 to $10 million.

There's nothing in between.

So, capital raising over the hump of $5 to $10 million. Very cool. We just did a full capital raise right now for Fund Launch Partners. So, yes, let's talk about that. I love it. Let's put it on the screen here. So, we'll definitely hit capital raising. What else? Just shout it out. What else would be useful for your— what's going on right now with you?

Underwriting deals.

Underwriting deals, analyzing deals. Okay, very cool. So would you invest in those deals? And sorry, are they your deals or are they somebody else's deals? Ah, cool. Okay, so how would you underwrite due diligence? DD, that's what that stands for. Due diligence on their deals and how would you underwrite them? I love that. We do that all the time with Fox Partners. We looked at again 900 deals last year. To do six, so we have a full process we can walk through that. I love that. What else would be useful?

Yeah.

Hmm. So team, how to structure a team, how to incentivize teams, all that kind of stuff. Very cool. I love that. Yeah. Now that we're raising some of these big funds, like a two hundred seventy million dollar fund. It's difficult right now. We need our company, our GP. So we're raising $10 million in the actual company. And when you have these big funds, it's difficult to bridge that gap. Like, why would you need my little $100,000, $500,000, $1 million when you have all this big money coming in? Okay, so small investors and big investors at the same time. So I'll write down small plus big investors. Right, in one fund. Is that a good way to say that?

Sure.

Okay. I know I have really good handwriting, so you don't have to compliment me. I know, I know. Any more? I saw a few other hands. Anybody else? Yeah, yeah. Ooh, I love it. Licenses. Yep, what licenses do I need to do this? Raise capital. How do I do it the right way? How do I not go to jail? How do I make sure investors are happy? This is huge. You know, we're going kind of through a market cycle. We've seen a number of people in this area, right, that have been fraudsters or come out bad. And like, what's interesting about that too is a lot of them— it's funny, you— I know a lot of the people that have been in this area that have turned out to— well, we'll just see how it all plays out. But you look at their funds 3 or 4 or 5 years ago they're raising for, and like me and Dan— I'll just— sorry, I'm on a tangent here. Me and Dan are— I'll tell you a quick story. We had one of our biggest investors in our fund He's like, Bridger, how did you guys— because we got pitched all those same deals and they all wanted to partner with us and we said no to— he's like, you guys, he goes, I invested in I think 11 deals, about $1 million each over the last whatever, let's call it 4 years. He goes, Ugly Unicorn, your fund is the only one that's turned out good. The other 10, so 11 total, 10 have turned out to be bad deals or fraudsters. And then he said, how did you guys avoid those? You and Dan, my partner Dan Young, you guys didn't partner or invest in any of those. How did you guys do that? And I was like, oh, it's not that hard. Because if you read the paper, if you read the fund docs, you could tell this is not going to work. But no one reads the docs. No one actually does the due diligence on the deals. We can talk about both of these. And I was like, oh, super obvious. I'll just tell you too, they don't do third-party audits. They don't audit their fund every year. I'm out. They don't do third-party administration. I'm out. Like, those are 2 simple due diligence checks. Simple. There's a lot more due diligence, but like, I'm gonna invest in your fund. Do you guys do annual audits every year? Third party, I'm not asking. I'm just saying in general. And if you're like, yes, I'm like, okay, I will go to the next phase. If you say no, sorry, it's a little too early for me. You could be my best friend in the world. Just give me back— call me back in a few years when you guys do third-party audits. None of those funds that you guys have seen come out in the in the last little bit in the news, whatever, that have been bad, none of them did third-party audits, none of them did third-party administration. Very simple things to do. Bernie Madoff, by the way, do you guys know this? Bernie Madoff, $28 billion fraud, right? Biggest on Wall Street, 30 years he ran his fund. The dude was the president of the NASDAQ. He was giving hundreds of millions to charities. He was this great dude, everyone loved Bernie Madoff. The SEC investigated Bernie twice. Found nothing. Bernie's a great guy. We all love Bernie. He never did an annual audit once for 30 years. People would ask, hey, do you have an audit? If you want an audit, you can go somewhere else. I don't do audits. We get 12% a year, 1% a month. It's just how we do it. Our firm's great. We're $28 billion or $30 billion, whatever they were. That's what we do. And then, it took a— if you guys watch the documentary, it's crazy. It took an analyst, a guy at another firm, a competing firm, Compiled all the data on why Bernie Madoff was a fraudster and gave it to the SEC. The SEC said, fine, we'll then investigate. They go investigate and boom, Bernie Madoff's this huge, you know, huge Ponzi scheme, whatever, all collapses. Wild story. This doesn't happen just in Lee. This happens around the world. He never did an audit though. 30 years, never did one audit on their fund. Very interesting, you know, good due diligence. Okay, we got a few good things here. Anything else? I can take my game extension and put legal structure and how to do it. Yep, so I'll put like a little sub, but yeah, legal structure, that kind of stuff, like that? Okay, let's do it. We can start with some of these. Let's go through some of these, and what I want to do as well, we'll have you guys, we can stand up, we can just talk face to face, we'll talk about your business. We can actually, some of you that ask these questions, we'll just go directly on you. Does that sound good? Good. Okay, I'm gonna do— I think some of these will all dovetail into kind of a framework, and then I'll use that framework to answer a lot of these questions. Is that fair? Is that good with you guys? So give me like a few minutes. Let me explain the framework of how I think about funds. Does that sound fair? So some of you know my story a little bit. I'll tell you very briefly, but I grew up here in Sandy, Utah, just down the road. I went on a church mission to Taiwan. Which is amazing. I served 2 years in Taiwan, it was fantastic. Came home, went to BYU, just like the perfect Mormon Utah boy, you know, like went to BYU, which is great. I love BYU. And I got to BYU and I said, uh, I am going to, you know, I am in college to make money. My purpose of being in school is to make money. I'm taking classes, like, like everything I'm doing, I'm like, if, you know, the goal is to make money. People like, follow your passion. I'm like, I don't know, like everyone's passions eventually turned into a job, you know? So you might as well pick a job that makes a lot of money and then you can just spend money on your passions. Like that's how I was like, I love skiing. I'm not gonna make money skiing. I'm gonna make money doing my money job and then I'm gonna go ski when I wanna go ski, you know? And if I don't like skiing anymore, great, I'll go snowmobiling or I'll go on a whatever, okay? So I got to college, I started 6 businesses my first 2 years of college. I started a Chinese tutoring business. I started a website building company. We did an online marketing business. I did, I wholesale 2 houses in real estate. Made $5,000 on each one of them. I mean, I was doing— it wasn't like business ideas, by the way. These were businesses that started and like were trying to make money. My dad grabs me. He's kind of— he's like, Bridger, you're kind of like a chicken with your head cut off. And I grew up in a pretty normal house in Sandy. My dad sits me down and says, you should go meet with my business partner. I go drive to this guy's house, beautiful, gorgeous mansion up on the bench up here, huge house. I walk in the doors, I come sit down with this guy, and again, my dad drove a beat-up car with a dent in the door, and I drive to his partner's house, this beautiful white gorgeous mansion. And I walk in this thing, and he's got a wine cellar in the basement, basketball court downstairs, the pool, cars, like this huge thing. And I'm like, dang. I'm like, how did you do this? Like, how did you get all this? And he goes, we run an investment fund. And a number of years ago, we started this fund in real estate. And currently, we manage roughly— $1 billion. I'll use my iPad here, but $8 billion in real estate right now, which to put that in perspective, you guys know Cardone Capital, Grant Cardone? They manage right now roughly $4 billion. Let me make this bigger, $4 billion. So at the time, they were 2 times bigger than Cardone Capital. Today, they're roughly $50 billion, their firm. Huge, right? Put that in perspective. And I was like, dang, can I learn about funds? Some of you guys have heard the story, but I asked him to learn about funds. And he goes, go talk to your dad. Your dad knows way more about this than I do. I said, no, my dad is broke. My dad drives a crappy car. You live in a big mansion. I wanna learn from you. And he goes, Bridger, sorry to break it to you, but me and your dad make about the same amount of money. And my chin dropped to the floor. I was like, huh? Like, come again? He's like, yeah, me and your dad are pretty much equal business partners in this business. Like, go talk to him. I left the dude's house. I drove straight to my dad's house. I was like, Dad, what the heck? Like, what's going on? Like, why haven't I been able to order like dessert at the restaurant for the past decade? Because it's too expensive. We're trying to save money and you're running a $4 or whatever, $8 billion fund. Like, what's the— where's the disconnect? Anyways, to make a long story short, my dad started to teach me about funds. We'd get on the whiteboard and he started to teach me how funds were built, how they're put together, how they structured their funds. My dad grew up in North Las Vegas, never worked on Wall Street, never had an Ivy League degree, just figured this game out and eventually started a fund that got bigger and bigger. He's now retired. He's been retired for years and they've done extremely well as a firm. My dad started to pull out the whiteboard and teach me some of these things. Every Sunday night I'd go to his house and learn these types of things. The fund management world, Forbes puts out lists of billionaires. The number one category of billionaires that's created the most billionaires is investment funds. Number 2 is tech. Number 3 is fashion. Now, tech has some outliers, Mark Zuckerberg or Jeff Bezos, but that's just a handful of people. The vast majority of billionaires are made through running investment firms. It's an interesting quote. You know, you've heard like most millionaires made it through real estate. You guys heard that before? Most millionaires became millionaires by owning real estate. Most billionaires became billionaires by private equity, by owning businesses and/or money management. This is the game you want to be in. My dad told me the same thing. You want to be in this game. Of all the games on earth that we could play, concrete, you could go into, you could go into be a chef, you could build a Chinese tutoring business, or you could build a fund. And if you're going to devote your life to something in a career, you might as well devote it to something that's going to have unlimited upside. And so I was like, hey, I'm in. So he started to teach me some of these things about funds. And to wrap this story up, I started to You know, when you learn about something, you start to recognize that thing in your life. Anybody bought a new car before and all of a sudden you start seeing that car driving around everywhere? It's not like there's magically more F-150s out there. It's just the fact that you start paying attention to those cars that are driving around, right? Same thing was true with me about funds. The moment I learned about funds, I started to see everything in the world through the lens of a fund. You guys heard that from me earlier, right? All these funds that control everything. When you start learning about funds, you start seeing this everywhere. And so, I then, I was in college at BYU, I was working at a company, I was an intern there and I was working there, and I found an opportunity where I could launch a fund in that company. They needed debt financing, they had clients coming through that needed short-term loans, and I said, what if we did a fund that financed these clients? Talked to the business owners, they liked the idea, I pitched my dad, he loved the idea, we started to put together this fund. I'm 22 at the time, I'm like, this is gonna be sweet, we're gonna raise money, we're gonna Put loans out and do this whole thing. So I got it all structured, I was ready to go, I did all the legal, and we'll talk about this in a second. I got my team kinda set up, licenses, I figured this whole thing out, my dad definitely helped me a ton. Then I hit this roadblock like, crap, how do I raise capital? And I thought, duh, I'll go pitch my dad. Some of you guys have heard this story, but I'm like, I'll pitch my dad. So I go, oh my God, my dad apparently has tons of money, doesn't spend it on us kids. We've been to, like, you know, We never travel, we never go anywhere, like my dad drives a crappy car, like we don't do anything, but so my dad's probably got money stacked somewhere, like I gotta go find it. So I go pitch my dad for money late Sunday night, I sit across from him at his home little desk and I said, Dad, how would you like to be our first investor into our fund? My dad says, I have the money to invest, but if I invest in your fund, it would ruin the experience of you raising money on your own. This is a crutch that you'll never be able to recover from. And if I invest in your fund, it would ruin this experience. He said no. And kicked me out, kind of with my tail between my legs a little bit. And I really, I was like, man, I couldn't close my own dad. But I took that and I said, well, shoot, can I figure this thing out? And I went out and talked to everybody I knew. My first little fund I put together at 22 years old was $49,500. From like 7 investors. Average check size was like $6,000, right, if you do the math, $7,000, which was teeny. That's like a micro fund, like micro, micro, micro fund, but it was enough to get started. We did these little short-term loans. The loans turned out to be super successful. Our first group of investors got a 64% return on their money. Small amount of money, but good return, right? Like I mentioned earlier, small fund managers have a— it's easier to find alpha because you're in these small niches. We then kind of transitioned that fund into what we called Fund 2. It's the same strategy. We raised and deployed millions of dollars out of that fund over the next 3.5 years. I think our net returns to investors was 62%, 47%, and 36% cash-on-cash returns for those 3 years. So pretty good returns. We then had a competitor come and buy us, and I sold that fund. I exited that fund. So we can talk about that if you guys want, exiting a fund, which is kind of uncommon. But we sold that fund out, paid back all of our investors, and it turned out awesome. During that process, a lot of people started to ask myself and my dad and my brother, who's an investment funds attorney, how did you guys do this? How'd you guys— like, you're in Utah, for crying out loud. How do people in Utah build funds? And so we started this thing called Fund Launch. It was Investment Fund Secrets at the time, just a small little online course that turned into a bigger course and then turned into now a full incubator where we help people launch their funds. We've had 100,000 people take one of our courses, which is just bonkers. We throw these multi-thousand person events. It's like, I'm shocked about how many people like this has affected. It's been amazing to be a part of. And then furthermore, we've launched 2 funds since then. I run Ugly Unicorn with Dan Young, manage about $25 million like I said earlier. And then Fund Launch Partners, we just raised a $30 million round, oversubscribed, just closed on that last couple weeks that we're investing now into our students. So, and finally that, and now we've kind of transitioned Fund Launch really, we used to kind of have courses. We don't really do courses that much anymore. We're more of an incubator. So someone would come into Fund Launch, our thing's upstairs. You would come in and we think tank your fund for you. So I'm gonna walk you through this process that we do in a second, but we do it with you. We have 8 different law firms that think tank someone's fund. We have partners that build your pitch deck for you. We have a capital committee where you can go and try to raise capital from. We have 15 coaches that think tank your fund, and then we launch that fund at the end. And we've launched over 300 funds in our— in Fund Launch over the last couple years. We're launching about 2 funds per week at that rate, which is pretty cool. So we're kind of transitioning to a full-out incubator that incubates funds to launch. And then the best of those funds we write checks into. So we wrote, you know, we'll write quarter million, a million, $2 million checks into these firms as they graduate. Does that make sense? So that's kind of the background. Welcome in, you guys. Come grab a seat. So with that, let's answer some of these questions here that you guys put on the board. So it was funny, my dad— well, let me just start from the beginning, really, really simple here, and then we'll have some of these questions. What is a fund? Anybody wondering that question? What is a fund? Are you guys all good on that? Yes or no? You guys are good? Good to go. What is a fund? Private equity hedge funds, venture capital funds. All it really is is just a pool of money. Investors are putting money into this pool and then we're going and buying assets with that kind of stuff. So you guys are all past that stage. So let's dive into this process of launching funds. Most people when they want to set up a fund jump to— we kind of— you're seeing the end result here, but I usually have this pop in, but we developed or I guess coined this concept called the Fund Launch Formula, which is a 4-step formula on how people raise or how we launch funds. Most people, step 1, they want to go do legal. Who asked the question about legal? Right here, right? Most people think, I'm gonna go build a fund. Step 1, I'm gonna go hire some lawyers and go build the fund docs, which I always tell them like, hold on, before you go hire lawyers, you can do that. But there's usually a lot of process that we do beforehand to help go and make that process go a lot better. And let me explain why. I had a friend, he went and hired a lawyer first. He's a guy here in Utah. He hired a lawyer. Lawyers generally for a fund are going to charge you initially $30,000 to $50,000. Can you guys see that okay? $30,000 to $50,000 to launch your fund. He then was like, crap, I'm doing this cool fund. I'm so excited. He then went and tried to raise capital. And the capital, you know, he went and talked to investors, investors gave him feedback. Hey, you should change your fees. I wonder, I'm doing due diligence, what if you tweaked it a little bit like this? So then he went to the, what we call the frame stage of the deal phase and kept tweaking his fund over the next 6 to 8 months with the lawyer. So every time he tweaked the fund, he'd go back to the lawyer and say, hey, I want to restructure my stuff. The lawyer would charge him, you know, $850, per hour. And great, yeah, we can tweak your docs. And they tweaked the docs. They kind of did this circle over and over again. By the end, he told me his fund— he did this enough times— he spent $500,000 on legal docs because he did this process backwards. Now, you can still do it, but it 10x'd the cost of his fund. What we, after interviewing hundreds of fund managers, we found what we call the entrepreneur's way to launch a fund. We developed this thing called the Fund Launch Formula. And this process is instead of going to lawyers first, what we do is we flip that on its head. You can obviously see it written out here. Step number 1 is we go and we vet the deal. What we call, you know, we really go and think through and do deep due diligence on the deal or the strategy. Once that strategy is figured out and processed in the right way, we can— and I'll share in a minute, this is kind of the stuff we go through. We'll go through risk control, return, how we're going to build our edge in our firm, that kind of stuff. Okay? We then go to the frame stage. Are you going to raise from international investors here? We can talk about this in a second. What kind of waterfall structure are you going to do? Are you going to have a pref, catch-up, carried interest? Like, what are you going to do here? Are you going to run a GPLP structure? Are you going to have a management entity here? How are you going to structure your LP and PPM? Are you going to run a Reg D 506 or 506? You're going to do a 3, 3, 3 fund? All this kind of stuff we think through beforehand instead of letting the lawyer— because most people right now, well, hold on, what's a 3 fund? And a lawyer will go, oh, let me tell you about it. And lawyers generally talk really slow and they get on their whiteboard and they bill you $850 an hour. Okay, great. And then, oh yeah, should we be an investment advisor, a registered investment advisor, or an ERA? Oh, let me explain to you on the whiteboard. Let's get on a call. Let's get my, let's get my 2 associates on so I can bill their hourly as well. You know what I'm talking about? I'm like, why are your associates on here? You know, they're, they're, yeah, they're $150 an hour each and I'm $850. You know, it's like, oh my gosh. That's how you spend $500,000 launching a fund when it could cost you $20 grand or $30 grand. Okay, once this is framed out, what we do is then we put this together. You can put it together like a pitch deck or like a PDF, whatever you want to call it. Go and pitch investors. Get feedback from real-world investors. Your fund is not going to be perfect day one. This is like any business, right? It's never gonna be perfect. So get feedback from here, the capital raising stage. Go talk to real-world investors and mentors. So what I would do, I'm gonna give you a real example. And then, and sorry, I'll finish this up. And then you go back and you edit based on what they say. So for example, our fund with Ugly Unicorn, okay? Ugly Unicorn was originally gonna be a real estate fund. You know me and Dan, we were gonna do real estate. This is during COVID We had this idea, what if we bought, all these malls are empty. What if we had bought these malls and we repurposed them into like a higher and better use? We could put storage units in them, we could put these like mixed-use data centers, like we could do all sorts of stuff with this, this interesting real estate that is worth nothing right now because COVID shut everything down. Not a bad idea, right? And we had all these distressed, really distressed retail kind of mall spaces that were just begging to be bought and they were, the debt on them was like, you know, it was almost free debt. And we're like, frick, this is a great opportunity, right? Like everybody else, like this is kind of cool. So we put together a team, we're going to talk about teams in a minute. We went and framed this thing out. We like decided on how we're going to structure the fund. We then went and we called up some of our mentors. So I'd call a mentor of mine and say, hey, Joe, I've got this, we got this interesting fund. Do you have 11 minutes? I want to run this. I know you invest in a lot of funds. I want you to give me 11 minutes to pitch you and then 5 minutes, I want you to just pick it apart and tell me if I'm barking up the right tree or not. Do you have 15 minutes for me that we could do something like that? And yeah, Bridger, I got 15 minutes for you. So great. We'd hop on. Usually, it'd end up being 30 or 40 minutes, but I'd frame it that way of 15 minutes. And what they'd do, they'd hop on and say, well, you know, and I'd say, really? And most of the time, this is what they'll do. You know, I talk to Joe, Joe's my imaginary investor here, but Joe, I'd talk to Joe, Bridger, you guys are awesome, man, I love what you guys are doing. Yeah, this is great. And I go, Joe, thanks, man, so much. What do you think, any holes? No, no, you guys are doing it great, it's awesome. Okay, Joe, well, we're raising money. Do we wanna put you down for a quarter million dollar investment? Well, I don't know if I can right now, I don't know. Well, Joe, what would hold you back from investing?

Well—

Joe, come on, give it to me straight. Okay, well, your deal sucks, dude. Your risk control return is way off. Then he'd tell me the real. That's how it always went. They're really nice at the beginning, and you gotta ask them like 3 times. Okay, well, let me actually tell you. You structured this thing way weird. Your whole thing, you don't have a distinct edge. There's a competitor down the street doing the same thing. I don't want— You go, wow, that's very useful. Thank you, Joe. I'd go back and say, well, Joe, what if I tweaked some of those things? What if we brought in a new partner, a new construction firm? Would that change your answer? Yeah, maybe. So, I would go back to the deal phase, change kind of my team and structure, change my edge a little bit, and then, Joe, can I come back to you in a few weeks and we can try this again, see if it goes better? And Joe's a mentor of mine, sure, yeah, come back in a few weeks. And we did this process over and over and over again. Does that make sense? This is working with, like in any business, like in tech, you're working with your customer, right, to build a product that they want. You see this in a lot of businesses. But when we get to funds, most people forget this. They believe, I'm just gonna build a fund and they will come. People will just love it. They love me. In reality, most people don't think through the hard truth of like, really, what's your unique edge? Is this making sense? You guys, am I barking up the right tree right here? And then, so sorry, back to Ugly Corner. Let me finish that story. So we're gonna do real estate. We found, we talked to like 10 mentors. Everyone hated it. We couldn't raise a dollar. Like, we literally couldn't raise a dollar. And it was during COVID People were obviously very fearful during COVID They wanted to hold on to their dollar. It just— we just couldn't, we just couldn't budge. So I said, Dan, let's go back to the drawing board. Let's build a different team. And we— then I was like, Dan, you're, you're phenomenal. Like, all he was doing all day was just trading crypto. He's like amazing at crypto. He's done crypto all the way back to 2013. He had the largest crypto mining facility in the state of Utah. Huge warehouse, like as big as this room, full of crypto miners in 2013. Uh, I mean, he's like, Dan, you've crushed it in crypto. What if we built a team around something like that? And he's like, that would be phenomenal. And so we started to build that together, we did the same process, we went through the deal phase, we went through the frame phase, we went through the capital raise. People loved it. We loved, we backtested portfolios, we did all this analysis, we went and talked to the same people, I was like, dude, I'm in. We raised roughly $10 million in our initial launch, like boom, like that. And the first fund we couldn't raise literally a dollar. And so this is the frame I wanted to set up for how we answer some of these questions. Some of your funds might not be the right fit. You know, they might not be the right one. But if you work through this process, then finally, when you get that kind of— we got verbal commitments first, then we went to legal, then we called the lawyers and say, hey, I want XYZ with a, you know, drink and a side of fries. And they go, yeah, I want a Reg D 506 fund. I want to do this kind of catch-up carried interest pref, all that kind of stuff. GPLP structure, come on in. And he's like, great, I can build it for you. Our fund cost us about $15,000 to build. Normally that same lawyer would charge $30,000 to $40,000 to build a fund. He built it for us for like $10,000 to $15,000 because we knew what we wanted. It's pretty simple. They're just, yeah, you bill by the hour, right? I've already figured it out what you need. Is that making sense? Following along? Okay. So hopefully this is a decent frame that we can kind of answer some of these questions and work from. We've used this formula over and over and over again to launch every fund we've done out of our— because it's just been so consistent. for how it works and how we can move through a process in a deal. This is a similar— sorry, I'll share one more analogy here and then we'll answer some of your questions. This is kind of my analogy right here. All of you right now could go build legal docs. All of you could go hire a lawyer, just build a fund. It's kind of like buying a platter off the shelf. Like, all of you can go to the store and just buy a platter, but can you— what's on the platter matters a lot. Can you build like a beautiful Gordon Ramsay meal, or is it going to be like a stinky fish? A lot of us in our community and stuff, it's their first time kind of doing a fund. They don't really know the difference sometimes between these two things, and they go launch a fund. They go, man, I can't raise capital. No one wants to put money in my deal. And I look at it and go, man, you got a stinky fish, dude. There's nothing compelling about your offer. Can we turn it into— can we make a beautiful Gordon Ramsay meal? What's on The documents, what's on the platter is way more important. Is this making sense? Following along? Okay, so let's hit on some of these questions. Does that sound good? Worth our time? Okay, let's do this. Everyone stand up for me, just shake it out for a second. We've been sitting for a while, and then we'll— let's just start whiteboarding stuff out. We'll talk about each one of these. Stretch it out for a second. We've got actually drinks over here, and by the way, all the t-shirts and stuff are all for free. Just grab one. I mean, don't take like 4. Just take one for yourself if you can. But this is just extra from our events, stuff like that. Okay, you guys feeling good? Stretched out a little bit? Okay, let's dive in. So let's— I'm gonna— we got capital raising here as our first question from Ethan, correct? So on capital raising, Ethan, what have you done right now to raise capital? What's been your current process? Where, like, give me the sense of where you're at right now with capital raising.

Current process is mainly based on SBA loans. And so, seeking the equity injection, usually 10% on a $5 million loan, that comes just from raw cash.

Okay.

And so, that's the capital raise right there. We have then partners that can match those funds, but then getting above that $10 to $13 million mark to $25, that's what we have an opportunity for, a $25 million deal. You can't do SBA loans for that. You know, it simply has to be private equity.

Let me ask you real quick. So, you've, you've never really raised equity then? Only debt through SBA loans. Is that correct?

It's debt through SBA loans, but then the equity injection, that just has to be cash. And so, we have raised that.

Oh yeah, there is. So, how much? It's like, just give me to date. How much equity have you raised to date? And then how much debt through SBA loans have you raised? Does that make sense? Rough numbers are fine. Yeah, a few million dollars. Like $1 to $2 million? Okay. So, you've raised $1 to $2 million from equity. And then how much through SBA? And that would be paired with $15 million. About $15 million. So, $15 million through SBA debt. Which, by the way, if people don't know, this is a very cool debt option. SBA is some of the cheapest money in the country. And what kind of rates you guys get? 1.75% back in the day. And like, what today? What kind of— what are they running at today? Do you know? 6 to 7%. Pretty good debt to go and acquire things. I mean, pretty awesome debt. Now you got to raise some equity behind. You got to have some financials. They got to do due diligence on you. But this is a very interesting Opportunity SBA loans, and again, they're $5 to $10 million range. The question is from you, hey, these loans, they cap out from the SBA. Well, because it's personally guaranteed. Oh, it's personally guaranteed too. Yeah, so they just cap out. You just can't guarantee that much. So how do we go do a $25 million raise or things like that? Let's talk about this. Is there a ratio? That's a good question. Is there a ratio that they run on a personal guaranteed SBA? Or how much equity raised to SBA? Is that what you're asking? Yeah, is it? Yeah, go ahead. Grab this mic real quick. So most SBAs, this is what I do in my small business side, is about 20%, but there's some lenders that will go up to 10%. Just depending on how it's structured and the amount. No, for the actual debt. So, like, let's say you want to do a $10 million SBA. You would have to put in $2 million of your own money.

Right, right.

So, anywhere between 10% and 20% down. Think of it like more of a 10% down and we'll finance the rest, right? I believe with SBA, you can't file bankruptcy. You cannot file bankruptcy. Yeah, they are personally guaranteed and they go through a bankruptcy. So you're tied to this loan. I mean, you got to make it work.

Yeah.

Yeah, you can't just grab the debt and then bankrupt and then— You can't get rid of the individual student loan debt. Yeah, you can't get rid of the student loan debt and SBA. Good point. So interesting debt line here. Well, let's do this. We're already talking. What are some other financing options? Now, are you asking more on the debt side or on the equity side for this question? For this question, I'm not going to be looking at debt. I'm wanting to add more equity. More equity injection? Great. Let's talk about that for a minute. And I think the rest of the group might have the same thing. Like, how do I raise more equity? Now, debt finance, there's a lot of options. SBA is one. And I'm sure this group could highlight maybe some credit unions or other places that you could find debt or maybe private money lending. Right now, private credit's blown up because interest rates are so high. So, private credit or private lenders lending, and there's hard money lenders that are like way expensive, but there's kind of this in-between group as well that'll lend on a business like this. It's not the SBA, but other groups as well. It's a very hot asset class because getting a loan from a bank is somewhat expensive. So, you're looking for alternative routes right now in private credit. I'm going to share for a second here on a framework around capital raising. I'm going to share this. There's about 1,000 different ways to raise capital. All of us know that. You just do. There's different avenues and there's not— I'm not gonna tell you there's one right thing everyone needs to do, 'cause there's just different things that work for different people. We have a guy in our group right now in Funnel Launch, he, I don't know how he did this, he found this group of like 1,000 dentists online and they meet together, it's like a mastermind group. I don't know, he won't tell me the name 'cause it's like his group, you know? But they meet together and he goes like once a quarter and pitches this group and he's like a former dentist and he just can speak their language. He's raised tens of millions of dollars online from this, I think it's a Facebook group or like an online group, all of dentists. That's all, that's like the only way he's ever raised capital before and he just goes to that well every time. Other people are really good at going to like events and meeting people and talking to people. Other people are terrible at events and really good at going to institutional investors and talking that language, right? So, let me give you a few frameworks of how to think about capital raising. We'll see what fits for you. Does that sound fair, Ethan? So, looking through here again, we want to make sure we're building something really good at the beginning. That's the first, that's the biggest step. Have a good fund. Like, capital raising gets way easier when you have a really good deal. It's much harder when you have a bad deal, right? But let's just talk. So, first thing I'll tell you, just have a really good deal. It's got to be amazing. But let's talk specifically capital raising. So, there's 3 different types of groups you'll kind of raise capital from. You have what they call high net worth, family offices, and institutions. And they all write different checks. So it's funny, with Fundbox Partners, we were talking to some big family offices and big institutions. Our fund is $30 million. And they're like, oh, our minimum check size is $20 million. And we can only be 10% of the fund. So you have to be raising a $200 million fund for us to consider you.

Sorry.

And they're like, we love you guys. Call us back in a few years. We'd love to invest when you guys go raise a $200 million fund. We had 2 groups tell us that. I'm like, oh, okay. But they, like, just per their mandate, they can't even invest. So, it's important to make sure you're targeting the right group. For your raise, you're probably targeting down in this range, high net worths or small family offices that can write checks, $1 to $5 million checks or even less, right? Correct? Now, furthermore, I like using this framework. It's already In front of you right here. I'm not gonna make it hide or whatever. Hopefully you can see it right there. So I call this the 3 stages of raising capital. There's 3 distinct stages that all of us go through when we're raising capital. Number 1, am I even around the people with money? Like, am I in what I call the room? Like, are you around people with capital? Okay, after you're around people with capital, okay, maybe you might be in the right room, but do those people see you as someone who actually like could manage money for them. I have a buddy, grew up in a really rich family, wealthy family. He gets in a lot of good rooms. He's in the room, but no one sees him as a guy that could raise money. They're just that kid's son and he's just kind of the guy that shows up. Like, you know what I mean? There's a difference between being in the room and then being someone in the room that actually you respect and see like, oh, I could, what I call connect with that person and see them someone that actually could manage money for me, which then brings you over to what I call the close phase. This is the phase where you have like the pitch deck, you're in the boardroom actually closing someone on the fund. We have a full funnel here of like how we close. It's kind of blurry. How we close investors. Okay, does that make sense? Those 3 stages? Yeah? Yes? Okay. So a few, I'll go a little bit deeper and then I'm gonna ask you a few questions, Ethan. So when I think about these 3 stages, well actually, Ethan, let me ask you right now. Which stage do you think you're lacking the most? Which one are you best at and which one are you lacking the most? Are you getting in the rooms, connecting the rooms, or closing the rooms? Which one are you best at, which one are you worst at?

Closing.

Raising equity, I'd say we can get in the rooms. It's getting in the right rooms. And so that's why I say that it's that, it's that gap. We've gotten in, in big rooms, but then like you were talking about, a small deal is $25 million. That's a whole different— that's what I say is, is we're needing to get in the right rooms.

That would be probably number one. Which one are you best at?

Oh, connecting.

Connecting, so once you're in the right room, you're pretty good.

Oh yeah, very, oh yeah.

And then close is kind of the middle one. So if you didn't hear that, connecting you're the best at, number 1 room, that's the worst at, and then close was kind of the middle. It might be worth you guys doing the same thing for yours. So let's talk about that for a second. So how do we get in the right rooms? You mentioned you get into good rooms, but a lot of these rooms are up here. You're talking to people that just are way too big for what you're doing. So how do I get in the better rooms? And I would love to do, maybe this group can think tank some rooms for Ethan to get in from Atlanta, you know, and we're in Utah here, but we can tell you some Utah rooms, you can tell some Atlanta rooms we can get into. I think of 2, now again, this is a framework to work from, 2 different ways to get into rooms, and you can already see it on the screen here. You can work your way into those rooms, or you can buy your way into those rooms. Now you've already gotten into good rooms, but then targeting the right rooms as well. I call it work versus buy because there's rooms that you can work your way into today. None of you had to come pay to be here, you just, you had to wake up and get here. Like, that was work, you had to work, you had to be on LinkedIn and see a post from me or whatever and get here. There's networking groups, real estate meetups, these are gonna be a mixed bag, but you're just gonna try a lot of rooms to just see what fits, right? You're working your way into those rooms. Now, there's the other side is buying your way into the rooms. Sorry, it's a little blurry here, but we'll roll with it. This first one, if you can't read that, says Ferrari Club, okay? If you buy a Ferrari, you can join the Ferrari Club of Atlanta. The cost of admission, guess what, is owning a Ferrari. And everyone else in the Ferrari Club of Miami, guess what they have? Ferraris, okay? Like, it's a good group to be with, right? You can go, there's a number of these types of groups. I've joined masterminds. Have you ever joined a mastermind before, something like that? So I've joined, I joined one pretty much every year for the last 6 years. One was $24,000 a year. $30,000 a year. Another one was $15,000 for a year. I joined one last year, it was $150,000 for one year. We just joined one, $250,000 for a year. That was the one I was with Tony Robbins, that group. Quarter million dollars to be in that room. There's 3 events a year. That's it. Do you keep doing that, Jeff? I mean, I'm still doing it, yeah. I think it's worth it. I mean, at least for the business I'm in and what I'm doing, 'cause you might say, that's absurd, Bridger. Why would you spend a quarter of a million dollars going to 3 events? Well, everyone else there has also paid a quarter million dollars to be there. Pretty good group to be with, you know what I mean? Like, that's the nature of it. It's, you know, there are 3 events, we do these really cool things, you're gonna meet interesting people, I got insights. If I do, at our level of business, if we get 1 or 2 really good insights that change our business, we'll make a quarter million dollars in a month or 2. Just from those little tweaks. So is it worth the investment? Yes, at our stage of business, yes. Is that a lot of money? Yeah, for Bridger, I'm not up here like, I'm so rich. That's a lot of money for me. That's a GT3 RS, Mace, right? That's a nice car. Dang, like a quarter million, but man, can we make it worth the investment? And so far, the ones I've joined in the past have been worth the investment. When I look back, I'm like, I met that guy who made me do this, and I did this, and I changed my team this way, and our business grew like this. Shoot, that came because I joined a group for $30,000 back in 2021. Like, dang. So being in the right room, buying the right rooms. Another, I'll give you another example. My dad, this one right here, some of you guys heard the story, but this is in Utah. He did this when they were starting their first fund back in 2005. They're in the small teeny little office, him and his partner. And my dad's very conservative, as you can tell from his stories. He's a very conservative guy. His partner is more like, we're spending money, we're going to have fun, like blah, blah, blah. His partner comes home, come to the office one day and says, John, I just spent, I think it was $35,000 on box seats to the Utah Jazz. And my dad's like, what? You know, with inflation, $35,000, that's still a lot of money. And they're like, we have no money. Like, you took our whole piggy bank and you just spent it on 4 box seat tickets to the Jazz. My dad was pretty mad. And Paul's like, hold on, before you go after me, We keep calling into these CEOs and wealthy people and we can't get ahold of them. They always turn us away. They got a receptionist. They got somebody that says they're busy. But if we call in and say, hey, you know, Mrs. Johnson, she's a local wealthy woman in the area. Mrs. Johnson, hey, Mrs. Johnson's assistant, I've got 2 tickets tonight. The Lakers are in town. We got LeBron and Luka here and we'd love for Mrs. Johnson or her husband to come. We've got parking passes, dinner beforehand. Does she want to come to the game tomorrow night with her husband? The odds of success go way up to get in that, get in the right room, right? And so, they started to do that and they like, they went from getting kicked out of the receptionist's office to, yeah, what time do we need to be there? Yeah, we'll show up at parking's at 6:15. We got the dinner beforehand. Game starts at 7. Great, we'll be there. And then, they had 3 hours to chat them up and talk to both them and their spouse about what's going on in their life, what's important to them. I was talking to my dad, he equated about, they did it for about 3 years, those box seats, they raised about $70 million. When they had really never raised money before, that was their first time really going out and raising money, $70 million they raised in Utah in 2005, '06, '07, I think right then. The Jazz had Deron Williams and Carlos Boozer, and we were pretty decent, so. That's gotta pay debt. That's true. We actually got pitched to buy some tickets the other day, but my me and my in-laws and then my my father-in-law's like, I'm not buy like why would I buy these tickets? They were like really cheap too, like for like season tickets in the lower bowl, and I don't want to see the Jazz. So maybe maybe do something. Maybe the hockey club is better. Maybe something different. But uh, maybe we'll get Cooper Flag. This this is the year, right? Aren't we supposed to get the draft picks this year? Jazz 2029 is going to be sweet, Mason. I keep telling Mason 2029 Jazz is going to be phenomenal. We just got to wait a few more years for them to. To rebuild. We keep rebuilding. All right, so that's the idea of pay-to-play networking. Is that making sense? So there's a number of rooms. Again, you can work your way into those rooms or you can buy your way into the rooms. I would, I always, at least for me, I suggest people do a mix. I think come to stuff like this that's free and you'll meet some incredible, you've already met, you've already said you met 2 incredible people here, which is amazing. And then I would do a mix of, I'm gonna try a few rooms, and you're not gonna hit on every room you go to, but I would start buying and trying in some rooms to get in the right room. Okay, is this helpful? Helpful for anybody? Get in the right room. Now, once you're in the room, connect. How do I actually connect? I'm in the room, how do I meet people and get to the right point of getting them warmed up to the idea of going and closing? You mentioned this was your best one. Do you wanna share what you do? How do you connect? Once you're in the room, how do you feel like you connect and warm people up to the idea that they're ready to talk to you and close? Are you comfortable sharing, Ethan? Okay, think for a second. Anybody else wanna share? There's no right or wrong answers, a lot of different ways to meet people. I'll share one quickly, then maybe give you guys a few ideas, and then I'm gonna share the mic. I wanna hear from y'all. When I go to a networking event, you know, I go to How to Win Friends and Influence People, right? Like, how do you meet people and do stuff? I always wanna talk about them, like, what's important to them, how can I solve their problems, right? That's what I'm always thinking about in my brain. How do I solve their problems? So generally, I'll meet somebody, let's say me and Ethan met in a— sorry, you keep thinking.

Well, Jerry.

Jerry. Hey, Jerry. Good to meet you. So I'm going to ask you about— Jerry, tell me about your business, all that kind of stuff. We're going to talk for a few minutes. And generally, Jerry will ask me about my business, right? That's usually, what do you do? I usually will say, you know, I run 2 investment funds. We manage about $50 million in capital right now. And if you're starting a fund, I'd say, hey, I'm putting together a fund right now. We're looking to buy these certain deals, X, Y, and Z deals. But hey, I'm not here to talk about that. What I usually say is this. I said, well, Jerry, you know, good to meet you. We'll talk for 20, 30 minutes, talk about your kids, your family, whatever. We find a connection if I think, you know, you're someone I want to talk to. And I'll say, Jerry, you sound like a guy that does tons of deals. By the nature of me running a fund, I get pitched deals all the time and I can't do them. My fund is in crypto and blockchain, but I get these amazing real estate deals all the time and I just can't do them. If— hey, it sounds like you're a guy that does deals. If I get a good deal across my desk, Would it be okay if I forward it to you and your family office can look at it and you guys can just check it out? Would that be okay? Oh, absolutely. I'd love to see it. 9 times out of 10, that is the exact answer. Who doesn't want to look at good deals? I say, great. Well, let's do this. Let me share contact. Let me get your email. I'll keep your email and once I get a couple good deals, I'll shoot them your way. Does that sound fair?

Wonderful.

We'll set this little arrangement up. We share an email and I pull back and I actually go and you can see here, this is again one example. There's a lot of different ways to do this. But I'll start building a Google spreadsheet, like pretty simple, just of a list of emails. And legit, I do get a lot of deals just by the nature of— and all of you, once you start telling people you run a fund, you're building a fund, you get deals sent to you all the time. Hey, I got this pitch deck. And so, look through them, and if I see a couple good ones, I'm gonna say, I'm gonna forward them to Jerry. Hey Jerry, good meeting you last week. I just forwarded you a deal that I got. It's in St. George, Utah. Take a look at it. And all of a sudden, we've now— Jerry goes, oh, Bridger's a guy who sends me, just forwards, you know, he's a fund manager, he's sending me deals. He's a deal guy. I've gotten out of just, I'm some guy you met at an event versus I'm now hopefully someone giving you value to your life. I would tell, I don't have a dog in the race. I don't have any, just you guys can underwrite, but I think this deal looks pretty interesting. I thought you'd like to look at it. All of a sudden, hopefully my value's gone up a little bit. Over time, if I can nurture this, what I call a list here, it could be text, it could be email, whatever. Eventually I'll say, hey Jerry, I've got a good deal. It's called my fund. Hopefully we're friends by that point over a month or two. Hey, say, Jerry, we're doing another round. I don't know if you're interested, but I'm putting this out to everybody I know. If you have 15 minutes, I can walk you through it. Odds of success, I think, go up rather than down, right? He might still say no, but odds of success, I think, go up. That's one way you can connect with people in the room. There's other ways to do this. Oh yeah, you wanna share? I was just doing this, and— Grab the mic here for a second, just so people on Zoom can hear ya.

Sorry.

I was gonna say, I currently do this. I got it from Bridger. Stole an idea. But it works. It works really well. And I wanted to use it as a plug where if you guys are needing help raising for a deal or have an investment opportunity, I run a fund of funds and I would love to hear what your deal is, if I would want to take it on. But if not, I'll put it on my email list and send it to my current subscribers.

So just hit me up after this.

Thank you. Your name one time. Isaac. Isaac doing an inception on the connecting phase, doing it right now. Clap it for Isaac, everybody. Well done. Well put. It's worked pretty well for you, you said though. Yep. Yeah, tons of free value. How can I solve their problem, right? Actually, I'll do this right now. Actually, what just popped in my mind, I met Tony Robbins like 2 weeks ago, 2 and a half weeks ago. He mentioned, if anybody has, he's like, he just off the hand said like, oh, I'm looking for a Ferrari SP3 Daytona allocation. If you guys know that car, it's a $3.5 million car. It's a beautiful car. And he just off the cuff kind of said that, and I like put that in my brain. And I was like, frick, how can I provide value to Tony Robbins? Everyone in the world wants to meet Tony Robbins. Can I be the guy that gets him that allocation? Right, so I texted a few friends that are really big car guys, you know, like Supercar Ron, you know him, I texted him. I was like, do you have an allocation? Anybody who's got an allocation? He goes, I haven't got one yet, so if anybody has an SP3 Daytona allocation, let me know and we can be friends with Tony Robbins. Where did he get that car? I have no idea. That's what I thought about too, I'm like, there's no way he's fitting in that car, but he wants one, so maybe they special fit it for him, I don't know, 'cause they can't fit in those cars, but pretty cool. So that's, anyways, one example of the connection room. Other people have awesome techniques, and I personally, I'm okay at this. I'm not like a world-class, I've just, that's one way I've done it. Other ways to build people on a list, to provide value, to help them in their life. Ethan, did you think of anything for you? Not yet? Oh, we got a few hands up here if you wanna still think, but.

The first thing is that everybody is my, every man is, sorry, every man is my superior in some way in that I learn of him. When I walk in the room, I'm there to figure out how you're better than me at what you do. and how you got that way. And it's genuine interest.

Right from How to Win Friends and Influence People right there. Every man's your superior. I love it. You had 2 hands here. Let's go here and then here.

Yeah, I was just gonna do an idea that's worked on me, uh, that as we get into this capital raising, um, being in these events, I've had a couple guys just hit me up after. They basically just sent me a book. It was something— it was a golf event, and he sent me a A book on Johnny Miller and something in it. We'd talked about it. And anyway, I think that's a good way. Again, just providing a little value. I remember that guy to this day. And I haven't invested with him, but if I need it, I will.

Anybody ever receive something like that? Like a random gift? There's a book called Giftology. Talks about this whole concept of how to give gifts and how it really helps. People don't receive gifts that often. In the mail, just randomly. The best way to do is random like that, and it could be a book. It could be packages. I've received stuff like that before. Very cool. Very cool. Thank you for sharing. Hand up here. Yeah, come just close so we get this cord over to you.

Speaking on gifts, I wasn't really going to mention this, but you know Matt Montague by chance? He's he's kind of a Utah County guy, wholesaler for Hartford Funds. So I'm I'm a twenty-year financial advisor. Raised and managed about $150 million, just sold my book of business last year and decided to launch a fund. That's kind of my background. I'm doing a little status alignment right now. So yeah, so basically status alignment can be intimidating for some people because sometimes you just don't have it, right? But I mean, the advice I would give is, like, for instance, with your challenge that you're talking about, I found the very best way to get your clientele is through referrals. And that's actually an item I would probably add under either work or buy is either some sort of— We've got it here. It's all blurry down here. Oh, okay. But yeah, like you immediately have sort of a status alignment with the person you're talking to if you were referred to them by one of their friends or family, right? And so let's just say you're new in the industry. Explain status alignment real quick if you aren't familiar with that. Yeah, okay. So, um, yeah, yeah. So basically, uh, kind of to use a dating analogy, uh, women date, uh, above their status or equal to their status. Men date, uh, equal to their status or below their status, which, um, in the business world, uh, kind of transitioning that to the business world, we, we tend to want to date equal or above. We date like women when it comes to business. And so if I meet somebody at an event and their status is like, hey, I'm just a new beginner, you know, in the back of your mind subconsciously you're like, well, I don't really want to do business with this person because they're not on my status, you know. But if they're, you know, talking about Ferraris and, you know, what they've done in the past and how successful they are, then obviously you're going to give them more time and attention. But it can be difficult and intimidating to have that, the ability to have status alignment, if you just, you know, if you're inexperienced, if you just don't have the business background. But if you can get in and build a relationship with a few people, get a few deals, whether it's friends and family, and then lean on those relationships for future referrals, that's going to be the status alignment shortcut that you couldn't really get any other way. I mean, a lot of us can't afford to buy box tickets to jazz games and whatnot to try to buy that status alignment, but building it through just basically relationship nurturing is a good way to do it as well.

Well put. Remember your name? Adam. Clap for Adam, everybody. Adam, stay up here for a second. So yeah, this concept I've I've loved, and we'll double-click on this for status alignment, but he talks about a flash roll. Oren Klaff, great book by the way, Flip the Script, if you guys haven't read it, phenomenal book. He talks about this concept like you just did at the beginning. You said, hey, you know, kind of before I asked my question, hey, I run $150 million RA. I just sold that book of business. I built it myself. All of a sudden the whole room goes, oh shoot, this is someone I probably need to pay attention to. And you did it really quick. It's 1 to 2 sentences. It's not you bragging about yourself for 10 minutes to everybody. But it's what they call a flash roll, 2 to 3 sentences very quickly on, we're all meeting people, this event right now, you're meeting tons of people here today, and you're trying to gauge, who am I gonna remember? Am I gonna remember Ethan's name, or am I gonna remember Joe's name? Who am I gonna remember that's gonna be valuable to me later? And that flash roll helps that a lot. Joe did that to me when he met me. He's like, oh, we just got a $250 million commitment to, and I was like, oh shoot, that's pretty cool, I'm gonna bring Joe on stage in a minute, right? You didn't do it in a cocky, bragging way, but you brought it up in 2 to 3 sentences very quickly, I was like, oh dang, that's really cool, Joe. You know, you brought that up at the beginning of yours. It's similar to, I always use like the Justin Bieber analogy. If you come up to somebody, there's kind of 3 different statuses that people generally align. And maybe add to this, that's why I brought you back up here, so you can come over here if you wanna draw a little bit. But like, imagine if, you know, you saw Justin Bieber out in the street, he just walks by right now. People have different reactions. Some people run up to Justin, oh my gosh, Justin, I'm such a big fan of— oh my gosh, can we get a picture? Justin, his brain goes, this is a fan, I will treat them like a fan, which is— and he's probably nice, oh yeah, we can grab a picture or whatever, and then moves on. He's not gonna do a deal with a fan, right? There might be somebody else that comes up to Justin and says, Justin, hey, I'm a producer I worked on a bunch of Drake songs and other stuff. Just wanted to say hi, introduce myself. You know, I helped Drake launch his last album. It was pretty cool. I just wanted to say hi to you. I've never met you in person before. It's not equal, but it's more in the same industry, right? At least somewhat. He's not like a fan, but it's a little bit higher than I think a fan is. Does that make sense? And then furthermore would be, you know, the top would be somebody that Justin looks up to. I don't know who Justin looks up to, but let's just call it like Dwayne The Rock Johnson. I don't know. And so it'd be like, oh, like it's kind of a mutual respect. Mark, you talked about it's, Dwayne The Rock Johnson, they meet one another and it's kind of a status alignment or increase. Anything you'd add to that?

No, I think you hit the nail on the head. It's— but I recognize it can be intimidating for new guys and gals that are just trying to break into the industry and they may not have the background to be able to walk around and drop status alignment. Uh, tips and tricks just really casually when they meet people. But I'm sure with a little bit of practice, there's some areas you can do it. I mean, um, you know, you can look up little cues and ways to, to connect with people that maybe, uh, are a little bit lower-hanging fruit. For instance, I don't know, if a guy's got the F-150 and the, and the right tires, you know, you're, you're status aligning around, uh, guns and, uh, your, your latest, uh, hunting expedition, right? So, um, just that little, uh, connection point you're looking for. Going back to this Matt Montague gentleman who lives in Utah County, he sent me— talk about gifts— he sent me a really cool box full of cat toys and cat food because he heard me casually mention that we had got a cat. And I didn't bring it up, I just barely mentioned it, and he really impressed me. I ended up doing millions of dollars with this gentleman. Millions of dollars over like 15 years because he so impressed me with this little attention to detail that I definitely wasn't expecting. Thank you very much.

One more time, clap it up. Thank you very much. Well put. I know we talked a lot about capital raising, but we'll we'll move on here. But I think this is fun to talk about because I love that the cat all the stuff, and you can have status alignment in different ways. Doesn't have to be money. You status alignment on kids. On cats, on guns, on sports. There's a lot of different ways you can get status alignment. All right, now you might say, well, Bridger, that sounds hard. Yeah, it is hard. It's a reason not everyone's a billionaire. Like, there's not— not everyone runs a fund, not everyone's a billionaire, not everyone's, you know. But if you do this right, I love a quote from Hormozi actually. It was funny. He's like, this one guy's talking to him, he's like, man, this sounds like a lot of work. He's like, yeah, it's a lot of work. But if we do it right, they're gonna pay us like $80 million. So is it worth doing the work? Like maybe, you know what I mean? Like yeah, let's do it. Yeah, it's gonna be hard. So okay, we talked way too long on this. Let's go to some of these other ones. Sound good? Good to move on? Okay, we'll go. I'm gonna go a little bit faster if that's all right. And then we can work on people's like one-on-one stuff. We'll go from there. Capital raising done. Okay, let's talk about due diligence on deals. You mentioned this, Ginger, right? How do you do diligence on other funds and also furthermore just on your own deals? Does that sound fair? Good way to look at it. Anybody else interested in that kind of question? We'll hit this for just a— I'm gonna go quick, okay? I'm gonna go like 2 minutes on this. We developed a framework that I thought was very useful and I'm gonna share this with you guys. So, on the deal phase, you guys can see here, got my fancy iPad. All right, I'm gonna roll down to risk control return. Anybody heard this concept before of asymmetrical risk? You guys heard of that before? It's a finance term. Some of you guys in finance will have heard of this before. This is the concept, and I'm gonna change colors here. I'll go black. Most of you have probably heard high risk, high what?

High reward.

High risk, high reward or return, right? Sorry, I'm drawing and typing at the same time. High risk, high reward, right? And then low risk, Low reward. Gosh, sorry. I'm just going to not talk here. Asymmetrical risk. Okay, hold on. Let me type here. All right. High risk, high reward. Low risk, low reward. Asymmetrical risk is, can you find some things that have relatively low risk for relatively high reward? Number one, is it possible? Number two, can we find it? The answer is yes, and hopefully yes on the second one. This is what this is where fund managers make all their money. This is why fund managers exist. You were trying to find things at asymmetrical risk. I was with Ray Dalio just a few months ago. Status alignment. I was with Ray Dalio at a Greenwich Economic Forum. It's a small club. I paid fifteen grand to be there. It was two hundred of us. I got to meet Ray Dalio. It was really cool. He talked about this concept, so I'm status aligned in the room. He talked about this concept. He goes, "We try to find in Bridgewater." 10 to 15 uncorrelated assets that— and we found we can— if we have about 10 of those, we can lower our risk by 80% without losing our reward. That's how he structured the best— one of the top-performing hedge funds of all time. Okay, so is this possible? Yes. This is what fund managers do. This is what we are trying to do. Furthermore, I'll give you another example, simple example, house flippers. Anybody flipped a house before, by the way?

Yep.

A few of you guys, okay. House flippers, if Bridger Pennington went and flipped a house, and I'm pitching you to invest in me flipping a house, I'm just telling you straight up, it's going to be high risk. I'm terrible with my hands, like I'm just not a handyman. My family makes fun of me all the time, I'm just not. And I'm like, well, screw you guys, I'm just going to go make money and I'll hire a handyman to come fix my gutter, okay? That's how it goes in my family. They all like literally, my brother like always makes fun of me because he's really handy, he has all the tools and everything. The tools, but I just like don't know how to use them really. And I just like I'll just hire somebody. Okay, if I flipped a house, it would be high risk and maybe high reward, right? It would hopefully go well. Maybe medium reward, right? Probably a lot riskier. However, who's flipped a lot of houses in here? Who's flipped the most? Just throw it out. How many houses have you flipped? Who raised their hand? Who flipped a house?

Worker.

So you find flippers. I fund them. Oh, you fund them, okay. I say, if it's high risk, it's low reward. Yeah, yep, gotcha. Well, somebody that we have, I have a buddy, he's flipped 300 houses. For him, flipping a house is low risk. The average house flip is about $65,000 a person makes on a house flip in America. That's a good house flip, that's an average. It's because they're in a market that's pretty fractured. It's hard, and when I talked about, remember big fund managers versus small fund managers? They're in a small, it's a single-family house, it takes a lot of energy and time to flip that house. When you get to bigger markets, you get what they call efficient market theory, where markets are perfectly efficient when you have huge amounts of money and they're super liquid. Down in small markets, they're usually very inefficient and fractured. Hence, we can find places that have asymmetrical risk. Y'all following along? Yeah? So when I look at a deal, this is how I do it. Okay, I'm going to look at a deal. Anybody have a deal they're underwriting right now? Throw it out. Just yell it out. Anybody have a deal they're underwriting? Jerry's got a fingernail business, like a nail salon or what? I am a semi-retired attorney. Did over a billion dollars with real estate, '85 to 205. And I felt something was going to happen in '89, '10, '11. Got out, completely removed myself, went out and played, came back. Look for opportunities and run across, from my fashionista wife, a problem in the artificial nail industry. She said they were terrible and unhealthy. Found a cosmetic dentist who had a solution, making a custom fitting from a scan that was removable and reusable. And I wasn't interested too much at that point, but then he said, well, they're spending $5 billion to $10 billion a year. I took an interest. I studied it. I have a capstone project at the University of Utah building out the proper production lab to produce these products now. We put them through proof of concept. They work well. We thought an Avon, a Nu Skin, an Mary Kay would be excited because it's a great lead generator. They are excited, but they don't want to produce them. So I was excited because It's very low risk. Our proof of concept showed that 60% of women want to try them, and over 75% once they try them want to use them forever. That's a scan that keeps them in. It's a low amount of capital for the people that build the production footprint, and then there will be ancillary business. Okay, that gives us good, good context. So explain now the deal. Like, so if I'm investing in you, Am I investing in the company? Am I investing into patents? Are we investing in a franchise? Like, what are we actually buying and investing into? What's the— give us the deal and then we're going to run through it right here. We're seeking $3 million to establish the lab that the capstone design team at the University of Utah is going to set up the blueprint for. And we're looking to put some equity into that. That'll be an initial investment. Whoever comes in with that will have an opportunity to participate more as the company grows and splits into divisions for continuation maintenance products. We'll keep it simple for this, but thank you very much. Okay, so hold on, am I correct? $3 million investment to buy the lab, the lab equipment to produce, and then that's going to dovetail into the full company, right? Is that correct? Good summary. Everyone got that? Okay, we're gonna do this together. Thank you, Jerry. Congrats, by the way. It's a very cool business, it sounds like. That sounds very interesting. We're going to double-click. I'm going to come back to you in a second. Okay, so let's just, with the basic knowledge we know as of 45 seconds, what I like to do here, I like to put down all the risks that are associated with this potential deal. Things that we can control, if you can see here, and things that we can't control. Both are important. Just because you can't control it doesn't mean it's not a risk. Both are important. We're going to run it through and see how sensitive we are to these risks, and then we're going to drive a worst case, a base case, and a best case scenario out of them. Hopefully this makes sense. Let's start with the risks on your business. I know it's going to crush, the upside's amazing if it all works, but walk me through, maybe yell out crowd, what are some risks associated with this investment? We'll bucket them into things that we can and can't control. Operator risk. Perfect. Yeah, and that's something we can control. So operator risk, like who's the actual team behind it? That's a risk. Are they going to actually produce? Are they going to work hard? Like what are they going to do? Keep yelling about what else? What are their risks? Sales? Yeah, can they actually sell this thing? What else? Yeah, unknown competition with like that are also developing. Is there a lab at BYU developing the same thing or at Utah State? You know. Do we know those around the whole country, around the world? Is somebody else going to come and disrupt us? Keep going. Yeah. Yeah. Will you know, will women actually adopt this? Now you mentioned you think so. There's cases that show that, but it's still a risk, right? Adopt. So I'm trying to write and draw at the same time. It's pretty, it's pretty fun. Fun challenge for me. What else? Operator risks. These are some good ones. Sales, underwriting comp, you know, adopt. Am I— did I spell that adopt? Oh, I did it wrong. Adopt adoption risk. Let's go things we can't control. What are some risks that we can't control that are still important? Yeah, recession. What if we dip into a recession right now? What else? Supply chains. Yeah, what if we hit this trade war like we talked about earlier? Supply chain is just fractured. We can't even sell overseas. There's just all global trade just halts. What else?

Regulations.

Yeah, regulations. What if there's some new laws that come out that, you know, for whatever reason there's some glue on here that hurts some, you know, ecosystem and whatever, and we can't use it anymore? Okay, uh, regulators, um, wars, you know, like we can go down the list. We could do this for an hour. Like there could be a war could break out. I mean, we could have, uh, uh, anyways, a lot of stuff that can happen. Okay, sound good? Give you a sense. I'm gonna go quick through this, but you would do this on your own deal. Then what we do next is say, okay, let's look at things that we can and can't control. Let's run it through a sensitivity matrix and let's see what drives out, pending all variables are the same, how it drives a worst-case, base-case, and best-case scenario. Okay? And let's see if we can minimize some of these risks. This is what I would do on a deal, like if I was working with you. I'd say, all right, Jerry, let's look at operator risk. How can we mitigate that risk as a company?

Any ideas?

As far as running the lab, make sure you have expertise.

And that's where I have the Capstone Design Team brings an amazing degree of expertise, state-of-the-art. Expertise. You got the University of Utah. But also, like, is it just you that's gonna be managing the money, or do you have partners? One of my principal partners who will probably be the president of the new— he'll start a new entity this week. He used to be at Nu Skin, so he has decent experience. So you got a partner with really good experience. Yeah, that does really well. Yep. Cool, that'll help all those. And then we can go down sales risk, adoption risk. So we're gonna see if we can minimize some of these risks, and then we're gonna go through and say, okay, Let's run a worst base and best case scenario for us. Let's go back to your partner. Might be interesting. So, if we run a best, like you land, like your partner just crushes it, best case scenario, we do what? Like we're a billion-dollar company or like what's the best? Well, again, I really appreciate you giving me input so quickly off such a brief, and I can answer in detail every one of the points brought up because I've done I know, yeah, we know, yeah, and we're going really quick here. We're going, yeah, kind of a simple example. Yeah. So best case, you know, and we all, if you land the right partners, we're hitting $1 billion. Our base case, kind of in the middle where we think all things being equal, where do you guys end up in a couple years? Kind of base case. Oh, you know, I tell people if it failed miserably, we'd be maybe $10 million, $20 million, $30 million. Okay, so let's call it $10 to $20 million is kind of our base case. Worst case, I mean, it goes to zero, right? Probably. Yeah, I don't think it could. You don't think it could? So what is the worst case then? Do you have patents and stuff you could sell off? Like, let's say— and we're talking partner risk here— let's say your partner dies. Let's say, you know what I mean? Like, let's say you get cancer, partner dies, whatever, we got to dissolve or wind this thing down. What is the worst case scenario that happens with this tech? Can we sell the patents? Like, what's kind of our worst case here? You know, somebody's gonna always run with it and make money with it. Worst case is I die and don't get to watch it. I mean, it's really— But as far as an investor, I'm investing in this business. What's my dollar amount worst case, you know? Is it zero? Or do you think there's actual, like, no, there's hard value here that the worst case we'd still— yeah, we have liabilities too. Is it $50 grand is our worst case, you know? All right, I'll throw like $50 grand in here. Does that sound okay?

I'm gonna be the pessimist.

Okay, well, this is what— this is what— this is healthy to do. So then we run through each one. Okay, what if a supply chain issue hits us? We're gonna run the same thing. So how sensitive are we to that? And maybe we're not sensitive. You know what, we don't need supply chains because we do everything, you know, here in Utah, very local. And, you know, it's still all this— we're not sensitive. So you can— if someone asks you that question, no, we're not sensitive at all to supply chain. We've already determined to not go to China after checking out China and we do want to keep it in Utah and we do want to keep it within the bounds of the United States. Yeah, okay. So great, you've already mitigated that risk. So anyways, is this making sense as an analogy here? So you run through your own deals with this because this is what investors will ask you. How sensitive are you to recession or regulators? Oh, we already ran a sensitivity matrix. You want to see it? This is what we think. This is our worst case, base case, and best case scenario based off of that. This helps you do a lot of deep underwriting on your deals. Sorry, I'm pointing at this when I should be pointing at this. To how to do this. Is this making sense? So, when I'm underwriting a fund, back to Ginger's question, how can I look at their worst base and best case scenarios and how sensitive are they to these risks and do they actually have asymmetrical risk in this offering? Or is there no asymmetrical risk? Have they underwritten this thing wrong? Right? Do they actually— like me flipping a house has no asymmetrical risk at all, right? Yeah, hand. I'm just curious about the sensitivity matrix. Would you guess it or do you put the data in? Most— so what we'll do usually is put this in an Excel spreadsheet. It's much easier. You know, a business like this, you're probably guessing a little bit more. A real estate fund though, not as much. You can plug in rent rolls, operating costs. I mean, you can plug in and do a full— essentially, it's your pro forma. And you're running a pro forma for a worst, base, and best-case scenario. When launching a business, you can still do the same thing, or buying a business. Okay, what are my current operating costs, my risks there? How sensitive am I to these effects in the market that happen? If you're running a crumble store, you know, you can do— you could run most of those pretty well through this. Any follow-ups to that? Does that make sense?

Yeah.

Yeah, usually you're gonna spend some time building out a big Excel spreadsheet. I'm kind of doing it by hand here, but you really— and you're trying to put as many hard numbers as you can into this model to really try to find Kind of what it is. Great. Anything else, Ginger? Is that helpful? Okay, I like it. Let's do this. Let's do a couple of these fast here. So, team. We had a question on team. Who asked that one? I think it was over here, right? In a fund, I see these 3 distinct roles in a team. So, there are your expert investor, your fund— what I call— this is your person that's amazing at doing the certain deals. You have your fund manager and you have what I call the money raiser, a person that's very good at raising capital and meeting people. This could be 3 people. It could be 10 people. It could be 2 people. But each one of these roles need to be solved. Now, double-click on me. What specifically— maybe this— I'm gonna ask the group your question because a lot of people had partners in here. Maybe go a little bit deeper on this, finding partners, finding team. So the problem was one of, uh, part of our group, he manages basically event and wedding buildings, and he's having a hard time finding people that will run each facility because he has a kind of people he's given equity to and they're just not getting the, the vision and the output that He would like. Um, and so just that part, um, like for myself— Yeah, yeah, um, so everyone hear that okay? So managing multiple locations, is it your question? Whose question is it then? Somebody else in our— in your group had this question. Anyways, we won't call on them, we'll keep them private for now. But running different locations, different teams, hard time building those sub-managers, that second tier of management. Uh, who else has done this in this room? Who else has built like a secondary management sub-teams? Yeah, do you want to answer this question? You're hitting the same thing. Are you guys partners? You guys are with your Crumbl stores? So you have a leader of a Crumbl store. Share this real quick. Yeah, what have you guys— just give us what's happened so far and where you guys are at with that process. So we have made our lives a lot harder by— we are across 4 different states for 12 locations. So, we have multiple management teams for 4 states, but it's a pretty small portfolio, right? And so, now, it's where we are being approached by, you know, funds that do want to invest in us, like Shadrach was mentioning. And the thing that we're tripping over is, okay, how do we standardize this so that we can, you know, scale? And how— so, if a deal comes across our table, that we can actually give investors that opportunity. So, I was actually just leaning over to him. I was like, how would you answer Who's the fund manager? Who's the money raiser? And who's the expert investor? And I think honestly in a lot of ways we're trying to answer this question right now so it's an easier story for us to tell as we go fundraise for this. So a couple of questions here on— let's start with— stick with this first and we'll kind of hit both these I think for a second. So building a second tier of management. How do you incentivize? Anybody can go hire people. I've done the same thing. You can hire. How do you actually really get a quarterback that's incentivized? incentivize, it's gonna go crush it and not go start a competing business too? Because in some businesses, they're like, well, screw you, I'm just gonna go start a competitor. How do you give them enough economics that they're gonna stay with you but not too much where they're taking the whole business? How do you properly incentivize? Anybody else want to answer this question? Anybody got any ideas that have done this before? It's the holy grail question. It's a hard question. That's why I'm like, I don't want to answer it. Just kidding. I know, but I know there's some experienced operators in here that have done this. I always look to incentives, right? Incentives drive behavior very directly. Incentives drive what people do. Oftentimes in my business, we have about 60 employees. When there's an employee like moving around doing stuff, I always look and I always go back like, what's the incentive? And I'm usually like, crap, it's my fault. I've given them an interesting incentive. They're incentivized in a certain way that probably encourages Maybe it's not that they probably should stay with what they're doing, but might give opportunity for this other behaviour that I don't like, right? And we've had some operators that crush it. We've seen a lot of success with— you guys have given up equity, you said?

Yeah.

We found a lot of success because it's hard to give up equity. It's so permanent. Like, well, what if they're not good? What if they just don't work 6 months from now? We found a lot of success in doing what we call rev shares. Anybody done these before? So a revenue sharing agreement, it's— or phantom equity is what people call it. And then later on, it can convert to equity. But for example, let's say we're looking to do a new deal together, a new side business. Great, let's do this. We're taking a lot of risk on you as the operator. I want to see that you can prove it, prove yourself. So what we're going to do, we'll do a rev share. We'll give you whatever the number is. Let's do it 60/40. 60% is going to stay with the management company, like the parent company, and 40% is gonna go to the new person in the form of rev share. So, 40% of the revenue after fees, or let's call it net distributable income, will go to you as the person. It's just like equity, but if you quit, if you leave, if you don't show up to work, this can get taken away. Furthermore though, if you stay and do well, if you're here for 2 years, this will convert to full-out equity. Or if we sell the entity at any time, that converts to equity on a sale. So it acts just— if you're with us, it acts just like equity. If you sell, you get the upside, you get everything. But if you quit, it just goes back to the parent company. That's helped us a lot. We've— with Funnel Launch, we've done this with a number of our people that have been high-level people. We've had a few people quit or move on and their equity came right back. Their phantom share came right back to us. Very useful. Yeah, go ahead. It's it's also good for them. Yeah, they have less lesser liability. They're like, well, I'm not. Yeah, it's interesting question. Do they get the tax depreciation of the asset underneath it if they're not?

Probably not.

I don't know, actually. Anybody answer that question? Anybody know? Yeah. You can write a contract. Just put it in the contract that they get part of that depreciation. Yeah. Yep. I mean, you can also do a vesting period.

Mm-hmm.

All the way up.

Yep.

Where if you have to keep it up, worst case scenario, they pay you 40%, I quit. Yep. Yep. Yep. So that would be one way to do it. Thank you for the answer. I'll share one other example. I think my dad is here. My dad, I told some stories about, is here. Mr. John Pennington. Stand up, John. Clap it up for John, everybody. He made it. We can give John the mic here in a second. I think you shared this with me. Within a fund, everyone wants, especially with your capital raisers, this is a great thing to do with capital raisers. Everyone believes They can go raise you a ton of money. Like this person, oh dude, I could raise you $15 million like no problem. Okay, great. Or I could raise you $100 million. So what we've done a few times in our firm, we've done something like this. We've said, hey, okay, great. We're trying to raise $50 million. We're going to give you 25% equity to this person right here, okay? Contingent on them raising this $50 million. And we're going to set timestamps. And it's— this is gonna work like a reverse vesting schedule. If you raise the $50 million, great, you get 25%. However, if you raise $25 million over the next year, your equity is gonna work pro rata backwards. You're gonna get cut in half. So, you go to 12.5%. Does that make sense? If you raise $0, you know, zero, you just don't do anything, we can cut you all the way down to like 1%. Something like that. That'd be a reverse equity. And actually, that's been very useful in the capital raising space because it's like, hey, just earn your spot and you got 12 months and 18 months and 24 months. Yeah, you had a hand and then we'll go here. Do they get put on the GP status for that? Yep, so that's how you get around the owners. That's why you do that. You get the owner's exemption there. So, they're an owner on the fund. They really are a 25% owner on the fund. So, they get the owner's exemption which doesn't allow them for licenses. They don't have to have a license to Some situations they can raise without a license. Yeah. They're a partner. They're with you. They're a full functioning partner with you. Yeah. Their main responsibility is to raise capital. They also have other responsibilities. They're on your team. They're gonna help with all facets of your startup business. So they're a partner with you. Their main role is to raise capital, and if they don't raise capital, they get cut back over time. Mm-hmm. I believe so. Yeah, I believe so. Yeah. So yeah, you give— and then, sorry, then we're talking about the owner's exemption. This allows someone, if they're like— I'm allowed to pitch my fund and sell a security because I'm an owner of my fund in some states or some situations without a license because I have what's called the owner's exemption. However, if I hired you to go sell my fund for me and sell a security for me on my behalf and I'm gonna pay you a fee or a commission for doing so, you have to have a license to do that. And so that'd be the difference. You had a question back here? Yeah. Same thing? Okay, cool. Answered that. Alright, feeling okay? Those are a few examples of stuff you could try back to incentivizing people in the right way. We've seen rev shares have been very useful. Underwriting that, that person is hard. Like we said, the holy grail question. Yeah, Dad, go ahead. You want to grab this mic real quick? We'll put it— we got people on Zoom here so they can listen in.

So on the clawback on that, on the 25%, what we found years ago, and I taught this years ago, is if you give that person the 25% day 1, They go home and tell their spouse, hey, guess what? I'm a 25% owner. I'm an equity owner, right? And they walk and talk the first day as an equity owner. Most people would say, well, when you raise $1 million, we'll give you 0.5%. Then when you raise $2 million, we'll give you 2%. They would step into it. And that situation, when you put it like that, it doesn't— well, the person doesn't go home and tell the person, their wife or their spouse, hey, I've got my 1% owner. But they do when they're a 25 or a 5% owner. And so the next day they walk and talk and act like they are, which they are, 5% owner. So there's a claw back. They get clawed back. So what I'm trying to say is you want the person, the psychology, the next day they're out like, I'm an owner, dude. You should invest in this, in this fund. And that's, that's the ownership thing. And the thing about it is they will never— these are salesmen. These are marketing dudes, ladies. They will never tell their spouse there's a clawback because in their mind it's irrelevant. Of course they're going to raise the $50 million. So why would I tell my wife there's a clawback? I am a 25% owner or whatever, whatever it is I am day one. And so that's why it's worked. Now, I have used the clawback now with friends who are getting married in a prenuptial agreement. Okay. It's the same type of, same type of thing, you know. The woman doesn't want to leave her job. He's retired. This guy's retired. He wants to travel the world. He wants to marry the woman who's in her 50s. She's in a great C-level position. But if she— she's not ready to retire. But if she quits and goes and gets married and gets divorced in 2 years, she can't get her big C job back. So it's a big risk to her. So she won't sign a prenup. This is actual couple stories. And I told my partners, I said, listen, guys I knew, Listen, do a clawback. Say if we get married, then, you know, if we get divorced the first year, I owe you $100,000. Second year, $200,000. $300,000. Up to 10 years. And after 10 years, there's no, there's no prenuptial gift. It's a clawback, right? Kind of a situation of clawback. So you walk and talk. So both of them got married, right? And one had a divorce 2 years in, and the other one has been married, you know, for a long period of time. But they were not going to get married Because neither one of the wives— and they were older women, great career women— couldn't sign a prenup because the risk was too big. And some of the guys are raising capital for you. Most salesmen are hired guns. Most people treat salesmen as hired guns. I'm gonna hire you, you're gonna do some work, and I'm gonna let you go. I'm gonna hire you, and they just kind of bop around to companies selling, right? If you find a great salesman, a great marketer, you want to keep that person. You want them in your Fund 1, Fund 2, Fund 3. But you don't know if they're good. Like you said, you give them the percentage, then you claw— if they don't do good, then you claw them back and then try the next one, claw them back again. Then they got to go. But if they succeed, then you found a gem and you've changed the psychology of a salesperson to, I am an owner now, not just some hired gun. So that's Well done.

Clap it up for John Pennington, everybody. Well done. Well done. Hopefully, that's somewhat useful on partners. Okay, we'll move through some of these as well. Let's touch on— well, actually, Dad, we got you here for a minute. This is a good question I think that you can answer. I was going to share your answer, but you can answer. This is the question around— Joe asked this— small investors versus big investors. Do you want to explain your question again, Joe? Yeah, sure. Struggling with— we've got a big fund right now that's coming in at $270 million and struggling with pitching the need of GP. So we got an investment into our GP and that's a $10 million ask that we're looking for. And when the big money's coming and we just got $35 million on another fund. They're looking at us like, you don't need us. Why do you need us on this small stuff? But that's what we're needing to raise right now for our operational capital. To summarize, the mix of— and so you're raising $10 million for the GP to like be— to bind to the actual GP. Okay, so you're raising— if I drew it out like this, you've got— this is your GP. You're raising $10 million. And it's a percent per million. Okay. And then you've got a— you're a limited partnership. You've got about $250 million committed to this thing. $270? $270. Sorry, I keep saying $250. $270 coming in from one check writer, right? Furthermore, are you trying to raise small people here on this, or is that going to capitalize the whole—

It'll be their own fund.

It'll be a single investor fund. So, you're now wondering on the $10 million. When we have that big money coming in, they look at all of our agreements and things that we've accomplished thus far and they're going, you don't need to prove that. Who? Yeah, who's they? Explain they. Yeah. Who do we go to? This group, this $10 million here. They're like— so, you're pitching me right now and I'm like, why do you need my $10 million? You got $270 coming in.

Right.

So, answering that question.

Right. Cool.

Well, and answer the question. Why do you need the $10 million actually? Because we need operational capital. We need to hire a couple engineers. You need $10 million to do that though? Well, so part of our problem is we're needing to lock up locations too. So we just locked down Ohio. That cost us $2.5 million. And we're building out a $2.2 billion power plant. So the expense is massive. But why are you doing that out of the GP? Why wouldn't you just do that out of the LP? Why wouldn't the LP be the one who buys the land? Why don't you raise $10 million in the LP? And then that can get the LP going and get this started and then the $270 can come in later and you could be partners in that fund. We like having the funds in-house so we can use them however we want. To be in the GP? So, now they're partners with you in the GP? Right. We can use the funds however we want.

Okay, interesting.

What do these guys think? The $270,000?

They're fine because they want us to find them a power plant that they can own.

They'd rather have you guys do all the upfront work and they're like the last check-in that like capitalizes it. Interesting. Okay.

Is the fund— is the fund gonna reimburse once this is up and running? This is spent, you buy some assets. Are you gonna put that in the fund and have the fund reimburse you?

So one nice thing about the fund is we do have a 2% management fee. So on the $270 million, we'll get our first $70 million in a month. We do get the 2% management fee of that whole $270 million. So that helps us too. That goes back into the acquisition.

Yeah, yeah, but you get that yearly, 2%. On a quarterly basis, you get half a percent every quarter? No, we're doing the full 2% right off the gate.

Yeah, I wouldn't do that. You wouldn't do that? I mean, it's good for you. I mean, they require that. Okay, well, I guess you can take it. But most funds take 0.5% per quarter. There's been a few funds around here that have taken like 5% up front. They take their— that's what they do. We should consider restructuring to 0.5% every quarter. That's what most funds do. There's been a few funds around here that have done, uh, hey, it's 2% management fee over 5 years, and so we're just gonna call it 2 times 5 is 10, we're gonna charge 10 upfront. I'm not gonna say any names.

No names.

No names, 'cause we're streaming here. That's what they've done, and a lot of people signed up for that and they didn't realize what they were signing up for. They're like, it's a 2% management fee. I'm like, well, no, it's 10% day 1. So you invest $100,000, you really only invested $90,000 day 1. Oh, she's doing the whole— so anyways, most funds are 0.5% standard, it just helps you grow. If I was to read— now, you've obviously thought through this a lot. Bringing people into the GP seems interesting. What are your thoughts on that? I would almost bring them into the LP or set up a parallel LP, like another LP here, because you want them to be limited partners. It's way better if they're limited partners when you're raising capital from them. They have an LPA, PPM. It's better for them too, I think, because at $10 million, you're gonna have— how many people are gonna come in on that? I mean, we've done— the smallest amount we've taken is $100,000. So, you have a possibility of taking 100 investors here. That's a lot of people in your GP. I would do it in your LP. I would set up even a parallel LP, and this could be phase 1. You raise $10 million here, and this gets the land ready and does all the permits and stuff. We could pivot still at this point, right? We've raised almost— Can you guys see this okay? Sorry, I keep standing in front of it. We've raised almost $5 million up to $10 million, so we could still pivot.

Yeah, you can go. Sure, you can always go back to them because you haven't really gone into operation. You can go back, you can have this fund reimbursed. This, this is called a parallel structure, okay? This could be a 3, one investor, right? And this could be a 3. So you have 99 investors here and one investor here. They both— these 2 funds invest pro rata into all of your assets. And when the GP— a lot of times GPs start their funds, they go out and buy assets, and then when the fund actually launches their first closing, the GP will take their assets they purchased, put them into the fund, okay, and take a piece of the LP position. And now the fund— the funds own the assets, not just the GP.

Look behind you here. Yeah. On that screen, that's exactly what you're explaining.

Yeah, there you go, there you go. Yeah, parallel. But the, the, the key, the key, the key here is if you don't do that, the GP isn't correctly aligned with all the LPs. And so you have to correctly align the GP's interests with the LPs so there's no— so there's less conflict of interest, right? So let's say the GP held on to Like, let's say, let's say a big huge copper mine, and the GP took the middle square of the copper mine where the mill is and then let the LPs own all the land around it, right? And then the, the copper mine goes bankrupt, right? Well, the GPs are going to keep that, and they're going to try to sell the middle piece because there's a conflict of interest, right? But if you can— you can't eliminate conflict of interest, you can just diminish it as much as possible. And that's what I think Bridger's saying here, and that's what I'm saying too.

Can you share one more? I think it's the original question I thought you were asking. And you've shared this before. When you've brought in big investors as well, you've had to have the little investors still. Even when you guys have raised like a billion-dollar fund, you have to bring in little investors. Explain why.

So, you're gonna raise a billion-dollar fund. So, you're offering— here's a billion dollars. And we do a parallel structure. One's a 3 and one's a 3. And so what happens is institutions, they take 5 to 7 months to do due diligence. But you need to, you need to go now. You can't wait 5, 7 months, right? And you got 5 or 7, uh, big institutions, and they don't fly out to see you unless they can give you $30 million. And when they give you $30 million, they don't want to be more than 30% of your fund. So you got to have a closing of $100 million just to have that one come in. Okay, so that's number one. And number 2 is we've always, you know, we always kept all the small investors, you know. And so what happens is in the first 3 to 4 months, all the small investors come up, come in, and we get to $75 million. And then in month 5, all the institutions start calling back, hey, how's it going? How's it going? And we said, yeah, we were already $75, $80 million. And they're going, oh crap, we need to hurry up and get in 'cause you're gonna be oversubscribed. And so the, so if you raise a billion, you know, $85 million is high net worth individuals, but they're the catalyst. You understand what catalyst is, right? A catalyst isn't the engine. A catalyst gets the engine going and then the engine takes off and does all the hard work, but the engine can't move without the catalyst. The catalyst seems to me is all your little investors come and we tell them, listen, if you wait to the 4th closing 6 months from now, you're not getting in. Because when we have a dude that's going to give us a $30 million, $80 million, $170 million, We're gonna oversubscribe. You're not getting in. So you better get your— you high net worth, you better get in the first 3 or 4 months. Because if you wait to month 4 and that gets them going, yeah, I gotta get in, I gotta get in, and they get there, you get $75, $80 million. And then, aha, all these guys come in and then you hit a billion. That, that's how we've used it as a catalyst. And, and right in between there are our family offices. You know, you have the high net worth, you have family offices, you have institutions. Institutions take a long time to do due diligence, a long time. But once they do, that's great. If they call you back in 5 months and you've raised zero, they go, well, we're still looking at it, I'm going to give a few more weeks, we'll call you. But they call back and you have $85 million, they're going to hurry up, and in one more month they're going to start writing you checks.

Is that helpful at all? It always— yeah, first check's the hardest check. It always is. No one wants to be the first check. Everyone wants to be the last Check in, right? Yeah, well put. Thank you very much. Okay, do we still want to hit these? What do you guys think? How are you guys feeling? Still still hit a few. Let's do this. We've been sitting for a while. I'm good to stay for. I know we're coming up on noon here in a second. I'm good to stay for a few minutes and answer questions. Then we went a little bit long on some of these. I don't know if anybody if y'all want to stay. We can do whatever. Let's do this though. Stand up for me. Just stretch out. High five two people. Say hello. There's bathrooms back here, there's drinks, there's shirts. Talk to people for a second, we'll do like a 2-minute, 3-minute break here, and then we'll keep going. Sound good?

Yeah.

3.5 minutes each.

2.

I got it.

All right, y'all, you guys are welcome to grab merch if you haven't. It's all free. Just take, take some if you want. If anybody wants, I can stay on the whiteboard for a few more minutes and we can just whiteboard questions out if we missed stuff, or just network and hang out. So I'll be up here. Just come find me.