Start Your Own Fund in 2026: The Exact Formula Successful Fund Managers Use

After running 3 funds, helping hundreds of others launch their funds, investing into 10 funds in the last 18 months, this is the new and improved Fund Launch Formula. Now, this formula covers whether you're doing hedge funds, private equity funds, venture capital funds, real estate funds, private credit funds, and even other wonky, weird funds. This is the way that entrepreneurs are launching investment funds right now. Now, this video today is specifically to people that are building and launching their own investment funds. Now, if you went online and you up some blog or ask chat, most groups are going to tell you to jump to the middle of the Fund Launch Formula, which I would say, err, don't do it. But they're going to tell you this. They're going to say, go hire a lawyer and a lawyer can start helping you with a fund. Well, if you actually go look this up, most lawyers charge anywhere from between $30,000 to $100,000 to set up a private investment fund. This is primarily due to lawyers, first off, having to teach you about funds. I always say you don't want your lawyer to also be your teacher because it's a very expensive teacher. They're oftentimes billing you $800 to $1,200 an hour to teach you about these funds. Secondly, many fund managers, as they're building their fund with a legal team, go and change their fund as they talk and work with investors. They want to update and iterate on their fund. And every time you make a change order, lawyers happily will bill you an extra $5,000 or $10,000 to make that change. And finally, the last reason is most Most funds actually never launch, meaning they go talk to a lawyer, they start paying legal fees, and then they figure out the fund idea they had wasn't all that great and they actually don't want to launch the fund or investors didn't like it, but they're stuck with a massive legal bill. Hence why the Fund Launch Formula was developed and is so necessary for people to launch funds. This comes from helping not dozens but hundreds of fund managers launch their funds. What we found was this model did not work very well. What worked well was the Fund Launch Formula, what I'm about to describe to you right now. This is how entrepreneurs go and build funds that investors want. When you launch your fund, you want investors begging to get into your fund. Your first close is raised and oversubscribed, and you can do that through the Fund Launch Formula. Let's go down to the first side over here of the Fund Launch side. There's 3 distinct keys of this side. Number 1, with the Fund Launch Formula, we're going to focus on your deal and strategy, which seems pretty obvious. Let's work on finding an actual deal. actual underlying asymmetrical risk that you're going to have in your fund. After we have a deal identified, we feel like we've gone through the hard work of putting this deal together. We're then going to go and start building out the frame and structure of your fund. Again, this is happening all before you go to lawyers. You're not going to lawyers yet. We are working through what's your waterfall structure? How are you going to pay back investors? How much leverage are you going to have on your fund? What partners are involved, etc.? This is all in your frame and structure. Now, most people at this point are like, okay, Bridger, I got a good deal. I got a good frame and structure. Let me go talk to the lawyers and build my fund. And I was going, hold on, don't do it quite yet. What you want to do third is come down here and actually start getting verbal commitments from investors. What you're going to do is take that deal and strategy, take the frame and structure, put it into a preliminary pitch deck or marketing materials. Go find people that are mentors to you and go ask them not for money, but ask them for advice. What you're going to do is take all of this to a mentor and say, hey, I'm looking to put a fund together. Can I pitch you on this fund for 12 or 15 minutes? And can you poke all the holes you can in this thing? And what you do is you go and get advice from them. Go find people that invest in funds and see what they say. If you can see from this, my beautiful graphic here, it's a circle. What happens is they will actually give you advice and you go, wow, that's actually a pretty good point. You know what? I'm going to go tweak my deal or I'm going to find new team members to be on my team with me, or I'm going to go change my structure. That was kind of a weird structure that I put together. Can I come back to you in a few weeks and see if I've tweaked some of these things? And you're going to keep working with people that you see as mentors, coaches, whatever. To gain advice on your fund. Now, there's an old saying that I absolutely love in capital raising. When you ask for advice, you generally get money. When you ask for advice from these people, eventually they will say, hey, are you actually raising this fund? This looks pretty good. Can I put some money in? You say, well, it's not legally set up yet, but when it's set up, yeah, I'll come and talk to you once it's ready. Furthermore, this doesn't burn your relationships with people that you know. The hard thing about raising money is like, I don't want to go pitch all these people I know and be trying to get money out of them. Don't go ask them for money. Go ask them for advice, and they will naturally bring up if they want to give you money. But you actually want the advice. The second part of this phrase is if you do want to go ask for money, generally you don't get money. You get advice. People on your first fund, people are like, hey, I'm not giving you money, but here's a bunch of advice of how you should change things. And it oftentimes ruins the relationship that you're at. So go ask for advice, not money. Once you do this loop enough times, this will gain validation on your fund and your fund idea. The reason this is a so Circle is because you'll do this over and over again until you receive validation on your fund idea. You have a number of individuals that are saying yes with that deal and structure and that frame. I would love to invest. Then and only then we cross over into the legal formation stage. To me, this is the easiest part of actually putting together a fund. I walk into a lawyer's office. I go, hey, I want XYZ with a drink and a side of fries. I know exactly what I want because I've been working on my frame and structure, my deal and strategy. And I validated that with a number of real-world people, investors, mentors that love this fund idea. They want me to build this. So I work with my lawyers for a little bit. We put together the fund. They helped me put together my Form D, my Form ADV, other compliance docs. And then I launch. You can see my line here. I launch and we are live as a fund. Woohoo! We are in. And now we hit this new side of the fund launch formula. Now we're on the fund management side. Step number 1, we're going to actually go officially to the capital markets. We're going to go and try to a first close. So I'm going to go back to all of those mentors I talked to earlier and say, hey, fund is now live. We're closing at the end of the month. We're getting capital commitments in, letters of intent. Sign here to subscribe to the fund. We're doing a closing. Once we hold a closing, we're then going to the next phase of the fund management side. We're actually going to go and buy these assets. So asset management, we're buying the crypto or the real estate, or we're investing into the apartment building. That's the asset management side. And we're starting to grow these assets. And then finally at the bottom, we are doing firm management, meaning we are building building out our team. We're building out interns, associates, other people on our team as we continue to raise capital, as we buy more property and/or more assets, and we continue to build the firm. As you can see, it's a circle here because you're doing this forever. This is what small fund managers are doing. This is what large fund managers are doing for the rest of eternity. You are doing these 3 things: raising capital, buying assets, and building out your team. The reason this fund launch formula is so beautiful is because it allows you to iterate and work with investors to gain validation to eventually launch. This is what I use to launch my hedge fund. This is what we use to launch my GP Stakes private equity fund. This is what our students and people in our program have used to launch hundreds of funds at this point. Now, I'm going to zoom up here. You can see this is a complex version of the Fund Launch Formula here. I have a lot of sub-frameworks within all of these factors of how do you build a team? How do you find asymmetrical risk? What is your edge? How do you go and actually raise capital? Who you're raising from? What are the legal structures and formations? How do you build an investment committee? How do you get in the room, connect in the room, close the room. How do you build out your fund waffle? How do international feeder funds work? That's all contained here and on the rest of this channel. We have other videos on that. But in a nutshell, this whole formula is how entrepreneurs build funds that investors want, that last, that people are actually begging to have. This helps you get over the hump of the big just call a lawyer and have your lawyer help you. You don't want your lawyer to also be your teacher. Now, here's the biggest secret of all. You don't need to have a Harvard degree or work on Wall Street for 20+ years to do this or play in this game. I didn't have all those things when I launched my fund. My other mentors that you've seen on this channel didn't use those things when they launched their funds. Even some of the largest fund managers today, people like Stephen Schwarzman, launched his fund at 20 years old, did not need all those accolades to do this. What you do need, though, is a great opportunity, a clear structure, investor conversations to iterate and work with, and the willingness this to follow the process, to see it through. Funds are about building a product that investors are excited and begging to join and get into. If you can nail that, you can launch a fund no matter where you're starting from. So not too bad, right? The Fund Launch Formula is pretty darn simple. Find a great deal and strategy, go and frame and structure that deal, get capital and verbal commitments, then cross-validation to your legal formation, launch your fund, and then move into the fund management side where you're raising more capital, you're buying deals, doing asset management, and building out your team forever. When you follow this order, you build a fund investors actually want and avoid the heartache and mistakes that hold most aspiring fund managers back. If this video was helpful to you, please share this with someone you know and check out the other videos on our channel and also like and subscribe so you're notified every time we drop a new video. Thank you so much for watching. I'll see you in the next one. Bye-bye.