Capital Raising Mistakes to Avoid: Richard C. Wilson, Ep 16
Capital Raising Mistakes to Avoid | Ep 16
First-time capital raisers and emerging fund managers who want to avoid common early mistakes.
Said on the call
"It is a mistake to be cheap on technology tools that will help you move faster and more efficiently with investors, or be seen as more professional."
"If you run an investment company and you don't have capital raised for investments, then you don't have much of a company. You really have ideas with no money behind it."
"It's a big mistake to dissipate your energy too early."
Summary
Starting a first fund at 5 or 10 million dollars, then stepping up to 20 or 30 million and later 50 to 70 million, is the core advice in module 16 of the 100 Million Dollar Rainmakers series. Richard C. Richard says first-time raisers often aim at a billion dollar deal or a 200 million dollar fund. He compares that jump to Michael Jordan moving from basketball straight to baseball.
The talk also covers focus and presentation. Richard warns against chasing five niches or twelve investor types at once, and against having no partner working full time on raising capital. He lists smaller errors too, such as cheap technology, unprofessional email addresses, missing pitch decks, foreign deals, hard-to-explain deal setups, and handshaking at conferences to sell the best deal anyone has heard.
Facts and figures
- Richard suggests first funds of 5 or 10 million dollars, then 20 to 30 million, then 50 to 70 million.
- He warns against trying to raise a 200 million dollar first fund without a standout background like Steve Schwarzman had at Blackstone.
- He names five niches and twelve investor demographics as examples of a scattered approach.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Capital Raising Mistakes to Avoid | Ep 16. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around fund structuring choices, offering documents and cross-border deal considerations. Do not use AI to write your own legal agreements.
The 5 big lessons
- Step up deal and fund size. Richard says people with no raising history should not target a billion dollar deal. He suggests raising a smaller amount first and growing from there.
- Start with a small first fund. He suggests a 5 or 10 million dollar first fund, then 20 or 30 million, then 50 to 70 million. A 250 million dollar first fund is possible but most people fail at it.
- Niche down early. Chasing five niches or twelve investor types at once scatters energy. Richard says to build momentum in one or two areas and drop what works less well.
- Put someone on raising full time. Many partnerships have people on deals and financing but nobody focused on raising capital. Richard says an investment company without raised capital has ideas with no money behind them.
- Look professional and keep it simple. Spend on CRMs and technology, use a professional email address, and have a pitch deck or one pager. Keep your offering easy to explain and talk to a professional about any unfamiliar deal types.
- 1First fund: 5 to 10 million
- 2Next fund: 20 to 30 million
- 3Next fund: 50 to 70 million
- 4Then larger funds
Related questions
- How do I value an early-stage company with no revenue?You value it on proof instead of earnings.
- How do I negotiate valuation with an early investor?Start with a valuation you can defend with traction and numbers, then expect the investor to push back.
- How do I raise capital from Middle East investors?Start with a warm introduction from someone the investor already trusts.
Questions about this video
How large should a first fund be?
Richard suggests starting with a 5 or 10 million dollar fund. Then move to 20 or 30 million, and later 50 to 70 million.
Why does fund momentum matter to investors?
Richard says people would rather invest in fund four than see a fund one stay open for years. They like to see smaller funds filled and how each vintage performed over time.
What helps build trust faster with investors?
Richard points to the three trust curves. Doing deals with people who already trust you, know your industry, or can visit the asset locally builds trust faster.
Put this into practice with the ready to raise checklist. See all capital raising mindset resources.
