Lessons learned from starting a fund

[Chris Seveney]

Wanted to share my recent experience regarding a fund we just closed on for the purchase of performing and non performing notes. Love to get people’s feedback as well for those who have also done a fund what lessons they learned and recommendations

1. Plan plan plan. Make sure you and your attorney who is creating the documents take the time to complete everything. Back and forth with my attorney took several months. While there could be boilerplate PPM’s out there you want to make sure you customize it to meet your goals and objectives

2. Do an investment summary and make sure it is professionally done. This is your marketing piece for a fund and it should look good and also be informative with short and sweet information. It shouldn’t be a book

3. Invest in your fund. This was the #1 question that was asked of me, “are you investing in your fund”

4. Keep the terms simple. Having crazy preferred returns with multiple hurdles will only confuse investors. People enjoy things to be easily understood.

5. Dont set your minimum investment amount too low. What is too low is for you to decide and depends also on overall size of fund. For something around $1M I would not go less than $20k.