If don’t do THIS, investors will leave you last minute… – Natu Myers of Raises.com


So this is going to prevent you from losing all the capital that you’ve raised for your your deal, your private equity deal or your private equity fund before it’s too late. So we’ve seen somebody go through an interesting issue and, you know, you always want to and so might as well use this video to learn about how they’ve encountered this issue so that it prevents you from going through the same problem. And this would shave off, I guess it will prevent you from shaving off a few years of your life span being stressed last minute. So, you know, in a really in a really small local private equity fund in this one was a private equity fund in Canada. And for this one, what happened was people were very like the deal went through and everything at the end, but so people flaked on their commitments last minute. So because the problem with like people doing one off syndications and things like that is people flake sometimes last minute. And so dealing with that process over and over again can be a bit annoying. So then a lot of people who have done an A syndication for those who don’t know, it’s basically in grassroots English using the cap, using the equity capital of other people to use that money to buy houses and or types of real estate, you know, in real plain English. So in one of those deals, they had something called a capital call, and they put that in place because they had like a lot of capital raised. (why should investors invest in you)





And last minute when a deal was about to close, you know, I think a few investors in the deal flaked and disappeared. And because they flaked and disappeared, well, they said, oh, they came up with excuses last minute. And because of that, the deal needed to close or else like the person’s reputation was at stake. And the person probably took years after we built that reputation of the other investors that didn’t that already committed and the actual deal that was selling. And you’ll be just really a big mess. And there was a lot of flying back and forth to do due diligence on the deal and the sunk cost. So they have to make sure they got the thing done and the guy’s livelihood was depending on it. So what happened? What happened after the story? So then the the way that it was dealt with was in the next deal that the person did and the way that the person got the people is to have the investors put in a down payments like a 10% deposit to secure their spots for the amount of equity that they would want to raise. And when they put that down, payments in it will be nonrefundable. So an investor would put in, let’s say they wanted to buy like 1000 shares priced at like 1000. So basically they wanted to get they had to invest a million, for example, they would have to put like a 10% down payments, 10% of that million in a down payment. (why should investors invest in you)

And so they’ll have to put like 100 grand in for in that case. So that really prevented investors from flaking last minutes on their commitments because they had some commitment built in. If you read the book Child Deanie Influence, it’s one of the best books on influencing people ever in that book they talk about like the fact that if people take a small commitment towards an action, it can prevent last minute people dropping out. So that was put in place. So the number one and number two, for those who aren’t aware, a capital call is just when you say basically it’s letting the investors know, the investors that are subscribed saying, hey, we need this capital by this date, it’s kind of like you’re calling the capital capital call really simple, right? People like to make this stuff over complicated. So when that happened, you know, and then so that’s number one. Number two is when you have the capital call, it’s also good to raise more capital than you need because honestly, like if somebody wants to really raise like 8 million, they should probably try to like based on their experience and so on. And all these factors that we talk about in other videos and other things, if they want to raise 8 million and then they if they really want to raise 8 million minimum to survive further to get their things done, they would be advised to raise more than that. (why should investors invest in you)

You know, attempted probably like 3 million or an X like at least three times more than what they say that they what they actually need. Because the reality is that especially in a recessionary like a deflationary or sorry inflation area, they call it stagflation, but really like a recession narry environment. People are people are slower than usual. Even so, you want to just really emphasize and really go above what you think that you need. It’s just like Grant Cardone to an rule. You just want to go above what you think you need. You want to make the the timelines tighter than what you think you need. You want to make everything better and greater than what you think you need because it’s going to default to something worse. And there’s this quote It’s like, and I forgot who said it, but basically we don’t rise to the standards of our goals, but we just fall to the minimum of our bare standards, right? So if your minimum standard is really lifted high, then it will be hard to default below that. And the point I make. In practical and practical terms. Basically you’re reaching out to the investors and then they don’t commit. You have a lot of investors at Flake, even after the capital call and even after the 10% down payments, then what you can do is say, hey, listen, investors, the ones that flake, you know, they they go off, but then you actually raise the minimum you need. (why should investors invest in you)

So let’s say you raise 25 million in commitments and you have all those deposits down. If those investors go away, then it doesn’t hurt you because you’ve raised your minimum amounts, albeit it wouldn’t be as nice as a perfect press release because it would be a smaller amount. But at least you don’t actually raise don’t actually make the maximum what what you actually think you need. Like let’s say you need to raise 8 million don’t actually make that the offering maximum it things rarely very seldomly go exactly as you plan so you want to raise more than what you think you need. So that’s number two and I think that’s really it. There doesn’t have to be a third point for every video. So essentially, number one, consider consider creating a situation where you have an investor obviously compliantly put a down payment for them to secure their spot in the equity deal so that they have a small commitment that they’ve promised to make and then they’re just using the rest after the due diligence period to put in the rest of the capital. And that can reduce the risk of investors falling out at the last minute. Number two, to further prevent investors solid last minutes, potentially consider, I guess there are three points potentially considered make it non-refundable and make it non-refundable. So then it’s like they lose something and then you work with obviously the securities lawyers and, you know, companies like raises or different firms to make sure that it’s compliant and then you’re good because the problem is that regulatory bodies are usually really biased favoring the investors. (why should investors invest in you)

So you want to do it in a way that is obviously fair. So that’s number two. And I guess number two and one half or two B is you want to consider raising way more like at least three times to ten times more what you think you would need to raise, because especially in the recessionary environments at the time of the recording of this video or in a skeptical environments, you want to consider the fact that people may flake, people may go back in their commitments, and you just want to account for that. You don’t want to be one of those projects. There are a lot of projects out there that if they don’t raise their target or their targeted amounts, then they have to give all the investors back their capital and they won’t be able to originate any deals. So you don’t want to be in that situation and you also want to be in a situation where you’re telling everyone and putting press releases out that you raised like 10 million. And then really those are just commitments, but those are actually like capital that actually went into the escrow account and got wired. So with all those things, you know, I hope that this puts you in a right direction. If you’re somebody who is either either maybe you’re a sophisticated real estate or mergers and acquisitions person that’s looking to get into the private equity fund world with have a team build that for you. (why should investors invest in you)

Or maybe you’re just somebody who’s new to all this and then you don’t even know what what the basics are. Or maybe you’re somebody who has done this multiple times and you’ve been in the business. But either way, it definitely is a reality that you want. You always want to have that margin of error. And don’t be overoptimistic, just have the margin of error in in all facets and means to protect you. And even on the capital calls, you can put in like a little time, make it like a quick time delay and a timeline. It’s like, give them notice. Like, Hey, we need this capital, like let’s say an X amount of business days and the shorter and tighter and more upfront, you make everything you know, the better it will be if you say that, hey, listen, we’re going to make the capital call like we’re going to make it a month. Notice some people that will take two months to get back to you. If you make it two weeks notice, some people would take one month to get back to you. So everything is really people are usually slower than what you tell them to do. Things are usually worse than what you expect them to be. So then in terms of not in terms of everything, but just in terms of trying to motivate people to take an action. (why should investors invest in you)

so that if at worst case everything goes really gets really bad, you’re still you’ve still met your minimum standard and don’t put your minimum standard as the max that you want to do. Put the minimum standard as one of the things. That’s it just it’s like within it’s your own corporate strategy but always go out and raise even raise $100 Million and then get to 20 million. And then that’s your minimum standard raise to 20 million. Like say that you’re raising 20 million. But in. Really, your minimum standard is like 3 million. Don’t put your minimum standard out there because the minimum standard will always get eroded by the amount of work and the amount of effort it takes to get the deals to the finish line. And with all these things, I hope this provides a little bit of clarity. And and if you’re somebody you want to have a team, build your private equity fund for you and then you want to get out to market. Yeah, I had to raise this. I come, this is what we do. And and one way or another, you know, I trust that you’re going to get in the right direction. So with this, I look forward to seeing you in another video. (why should investors invest in you)




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