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CRE Insights Blog

Investment structures that will sweat for you at every meeting

Hello, this is Richard C. Wilson, founder of the Family Office Club, and I want to do a quick video here on innovative structures. If you have a bland two and 20 normal blind pool structure, or a structure that looks like all of your competitors, I’d highly encourage you to innovate and come up with some structure that gives you an advantage in the marketplace, some structure that makes you more aligned, either more performance fee-based, or low fee, or no fee, a way to structure co-GP investments, JV equity investments, a way to have different share classes, anchor investors, seed investors. If you’re just going at it the plain vanilla way, your structure is not working for you. It’s not helping people lean forward. So I’d put a lot of time and thinking in that, because oftentimes people put a couple hundred hours into figuring out their investment strategy, but then they wrap around that a plain vanilla or insultingly high fee structure that doesn’t align you with the investor, so then you have to be creative and make up a new structure on the spot when you get in front of a sophisticated investor who’s honest enough to tell you that they don’t like your structure even though they like you and your team and your strategy perhaps. Many times in this industry, the most busy investors are not even going to take the time to give you feedback. They’re going to archive your email, not respond to the voicemail, and move on and work with the ones who have figured out how to offer investments more productively, in a better structure, to them as a potential investor. So I’d really encourage you to dig into this area. We don’t have time to go into each structure, that’s a full one-hour webinar worth of topic to cover. But I’d encourage you to work on your structure, make it more unique, make it innovative, and make it a strength of your firm rather than a me-too, also-ran that sounds like everybody else’s structure in the marketplace. If you want to learn more about this, please check out familyoffices.com and capitalraising.com.

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Richard Wilson

Richard Wilson

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