Tuesday, February 28, 2023
What I've Learned From My Interview With Casey Baugh ($340M AUM)
Recently I had a very nice convo with a good friend of mine, Casey Baugh.
He's a well stablished fund manager who quickly raised hundreds of millions through his network alone.
From all the things I learned from him, here's the most honorable mentions...
1) Money will find great deals
If you pick great deals and tell the story properly, making people easily understand the value of the deal...
People will almost always write a check.
2) 90% of your competition is bad
There's a bunch of bad funds and bad thesis out there. Investors losing money, too much speculation, etc.
It's not hard to stand out and raise capital in 2023.
3) Face more rejections
Most people are afraid to hear "no".
Success comes to those who embrace the "no" as a part of the game.
4) Take asymmetric risk
The key is not to take any risk, but asymmetric risks.
Those are risks that you see can generate you the biggest return with the lowest amount of risk.
It would be "low risk, highest reward" scenarios.
5) Compound matters
If you can, and if makes sense to your fund, stay on deals as long as possible.
Deals that get you compounded returns in the long-term.
Now, out of all of this points, I think we should extend on why you should care about asymmetrical risk:
As a fund manager, you know that playing it safe can only get you so far...
To make real money, you need to take risks.
But not just any risks - you need to know about asymmetrical risk on the positive side.
Asymmetrical risk on the positive side is when the potential gains are much greater than the potential losses.
It's the kind of risk you take when you invest in an emerging market or an early-stage startup that has the potential to skyrocket.
However, why is this important?
Because if you can identify and manage asymmetrical risk effectively, you could potentially make some serious cash for your clients.
So how do you do it?
Diversify your portfolio: Just because you're taking a risk doesn't mean you should put all your eggs in one basket. By diversifying your investments, you can spread the risk and increase your chances of hitting it big.
Do your research: Investing in high-risk, high-reward opportunities requires a lot of research. You need to know what you're getting into, what the potential risks are, and what the potential rewards could be.
Keep your finger on the pulse: Things can change quickly in high-risk investments. That's why you need to stay on top of things and be ready to make changes as needed.
So there you have it...
Asymmetrical risk on the positive side can be the key to high rewards for fund managers.
Just remember to diversify, do your research, and stay on top of things.
P.S. if you haven't gotten your Fund Launch LIVE tickets yet -- do so soon!
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