Should You Scale Your Business With a Fund in 2026?

So I recently met with a business owner doing about $9 million a year, and the question was, should I launch a fund? And I have no idea how I wrote this with this huge gap right here, but the question is, should I launch a fund? He goes, I have a couple options. Option number one is someone wants to buy me. Like, I'm gonna get acquired. He goes, also, I want to scale. So what if we had this business that went out and we purchased a handful of our competitors or adjacent businesses And rolled them all together into this. He goes, I'm really considering this fund model since he heard me speak on stage. He's like, I would love to do this, but how do I decide, Bridger, like between should I just sell the business? Should I try test this out? Like, how do I know if I want to actually launch a fund? So in this video, I want to break down at least the framework I gave him of how I would think through and test your product of launching a fund well before you launch. And actually, you can do this in probably a couple weeks to figure out this question in your business right now. So we talked further. This guy runs a pool business, and I'm like, well, who would you acquire? He's like, first off, I'd buy some competitors. There's a few competitors that are massive, but also there's repair companies, there's service companies, there's chlorine, there's hot tub companies, there's these cool infinity pool companies. Like, we could buy a ton of these in our certain area and roll them together? And he was like, I think we could do extremely well. And I said, I think you're on the right point. Like, he goes, this group that's trying to buy us, they're gonna give us, I don't know, a 1 to 2x revenue. Pretty small multiple. But when you buy all these companies and build an empire, he goes, other people are, they're selling for, they can sell it for a 4 to 6x multiple. So when you pull these together and build this empire, empire, your multiple often goes up because of the economies of scale that you add to all these adjacent businesses. Now, if I was going to test this out, what I would do is this. I would follow what we call the Fun Launch Formula of actually testing this idea out. And you can probably do this in 2 to maybe 3 weeks. He could fully vet and test this out. So number one, if you guys have seen our previous videos on the Fun Launch Formula, You find a good what we call deal, or building out your thesis or idea or structure for your fund. So I said, "You've already done a lot of things." Yeah, I've already mapped it out. I said, "Great, map it out and let's do our risk control reward framework." So we're gonna see, can we get the risks relatively low? Can we get risks down and reward higher? And based on what metrics and what control features we can add to this, we're gonna drive this all into some kind of Excel. Like, we're gonna make a— it can be simple model, we can make an advanced model, but some kind of model that shows how this plays out over the next 3, 5, 10 years for a worst case, a best case, and a base case scenario of how are we gonna perform during this tenure. Then I said, what we're gonna do next, that's number 1. Number 2, and I'm like, you could do that this weekend. I mean, this isn't— it doesn't need anything fancy, but just start mapping and just, okay, if we, Did this much revenue here this month, month 3, month 4, month 5. Let's run through this. Number 2, what I told him was, okay, let's now frame out how a fund would work. So this is how, how much money do you need to raise? And we'll go back to that same model that you have. How much money you're gonna raise? How are you gonna pay investors? What's the split gonna be? When do they expect a return from? What, what drives the highest return? And we're gonna put all this down. Into a PowerPoint, and then he asked me, "Well, like, but what's your? How do I know if investors will like this? Like, I don't know. Like, what if I put stuff together and investors don't like it?" I said, "Aha! Like that's the perfect question because the next step we're gonna we're gonna run it. This is a this is all just modeling. It's just on a piece of paper. We're kind of drawing out what a fund would look like." I said, "Step three, go and actually pitch investors." Go actually try to raise capital. And he's like, what do you mean? And I said, well, you get this idea put together in PowerPoint. I said, go to step 3. And again, 2 to 3 weeks. I want you to go pitch 5 to 12 investors or mentors or people that you know in your space. I'm like, you can come pitch me. And what you're gonna say is, Bridger, you're gonna text me and say, Bridger, hey, I've got this idea for a fund. Do you have 11 minutes that I can run you through this. I want you to just rip it apart. This is a fund we're thinking about doing. I'd love to get your feedback on it. Most people, if they're, you know, somewhat of a mentor to you and they invest in funds, they're going to say yes. And so you go, great, let's hop on a call. So we're going to hop on a call and I'm going to run you through for 11 minutes on this pitch. And I'm going to say at the end, hey, like, what do you think? And they're going to say, oh, that was great, Bridger. Like, good job. Like, I'm so proud of you. And you're going to say, okay, great. Well, would you actually invest in this? Well, you know, my money, whatever. No, actually, I'm actually going to raise money for this. Like, can I put you down for $100,000? And they're going to go, well, you know, I don't know. And you go, what's holding you back? And then they will tell you the real reasons. They'll say, well, you know— no, really, like, be honest with me. Give me brutal, the brutal hardship of this. Say, well, you know what, your team over here, I just didn't— I just don't think it's a strong enough team. Or The structure of how I'm going to get paid back as an investor doesn't really make sense. Or, I'm not following your math on the worst case, best case, and base case scenario. And you go, wow, okay, thank you. Let's unpack that for me. And you get all this great feedback from them. And then you say, hey, I'm going to go try to fix a bunch of these things. Could I come back to you in a few weeks if I fix some of these things? And they can say yes or no, but hopefully they say yes. If you do this with 5 to 12 people, You're going to get incredible feedback. And what you do is you come back to step 1. You then redo your model. You then go to step 2. You restructure this. Then you come back to step 3 and you keep repeating this cycle. And people always ask me like, Bridger, well, when can I do legal? I got to do the legal docs, get it set up. I go, hold on. Step 4 is legal over here. And by the way, this is how we've launched 210 funds out of Black Card. We do this exact same process. Anyone can go launch a fund right now. You— I— we could call a lawyer, we pay some money, we can get you the documents built. But the bigger question is this: anybody can build a fund. Can you build a fund that investors want? Can you build a fund that investors are dying to have? Another example is like a website. Anybody can go build a website. It's not that hard. You have— you know, get the coder, you go to wix.com, whatever the thing is. You build the website. Can you build a website that people are dying to have the products and buy and check out and it's an amazing site? Same thing's true with funds. Anybody can build a fund. Can you build a fund that investors are dying to have? When you do this process, this iteration makes sure and ensures you that investors want your product. Our goal for each person that comes through, we want them to get about $2 million of verbal commitments. Meaning you get back to this investor and you go, hey, Would you put in $100,000 or $250,000 or $500,000? And they go, actually, yeah, you know what? You've solved a lot of these problems. Yeah, actually, if you guys get the legal docs together and stuff, yeah, put me down for $500,000. You go, great. I'm going to put you down for a verbal, just a verbal commitment between us once we get it all figured out for $500,000. What that does more than anything else just gives you confidence that you've built a product that is worth having. And then we can go to legal and figure all of it out. When you do this backwards, things get wonky. When you start with legal and then you go try to frame and deal and pitch investors, what happens is you have to keep going back to legal to adjust your documents. And what happens is you end up spending $50,000, $70,000, $100,000, $400,000, $800,000 on legal. When in reality, you should probably be spending $25,000 to $30,000 on legal. That's it. I've had friends literally spend $500,000 on legal documents because what happened was they built documents, they changed stuff, they go back to their lawyers and the lawyers charge them $1,200 an hour and they say, great, yeah, we'd love to change your documents again and again and again and again, and because they didn't do this process first. And then I'll say this lastly, most funds that start with this, most funds never launch. That's the truth of it. Most funds never launch. Most funds that get filed here, never actually launched because, and by launch I mean actually raise capital for their desired amount, because they didn't do this process of what they're doing here. So what we're doing for this YouTube channel, I'm gonna drop the frameworks that go into here of how to build a deal, how to frame it out, how to pitch funds, and actually legal and launching service providers. We're gonna be dropping all this on our YouTube channel over the next few weeks. So subscribe, follow, 'cause we're gonna be dropping and dripping this out over the next few months. Actually, not weeks, months. It's a lot of videos in here of building and launching your fund.