How many names do I need to raise a first fund?
Friends & family · Video 7 of 8 · 0:30 ·
More than you think. In one example pipeline, 20 names lead to 12 conversations, 6 requests for documents, 4 people who say they're probably in, and 3 who wire money. Start early and log every step: who, when and what you shared. Under Rule 506(b), that log is your record of a real relationship with each person before you pitched them.
Everything here is for educational purposes only and is not legal, tax or investment advice, or an offer to buy or sell any security. Laws and thresholds change and depend on your facts, so talk to a qualified attorney before acting.
Key facts
- Most people on a first list won't invest.
- Keep a log of who you spoke with, when, and what you shared.
- Under 506(b), offers go to people you have a pre-existing, substantive relationship with.
- The log documents those relationships.
Transcript
Operator: Twenty names. Three checks. Here's where the other seventeen went.
Founder: Only three?
Operator: Say, twenty names. Twelve say yes to a conversation.
Operator: Six ask for the documents.
Operator: Four say they're probably in.
Operator: Three actually wire.
Founder: So I need more friends.
Operator: Or start earlier. And log every step: who, when, and what you shared.
Founder: A spreadsheet? Really?
Operator: Under 506(b), it's your record of a real relationship with each person before you pitched them.
Founder: Okay. Twenty names.