People have been asking me about what exactly EID Capital is and where I plan on taking it in the future. So, to answer these questions, I spent the past week or so, fueled by copious (I'll say excessive) amounts of caffeine and very, very little sleep, typing away to organize my thoughts. I believe I'm now at a point where I can answer these questions.
Below, you'll find a rough outline of my vision for EID Capital, with target completion dates, goal completion metrics, and pertinent confidential information withheld. Suffice to say, there's going to be a lot of dope sh!t coming soon at EID Capital!
So let's cut to the chase, I'll begin with what I'm currently working on (*Starting Today*) and then outline my vision for the years ahead (*Vision Realized*). Without further ado, I present the vision for EID Capital.
Enjoy!
EID Capital's Vision Outline
*Starting Today*
Current Initiatives:
1. Wealth Management/Financial Planning (Friends and Family Only)
2. Retain Outside Counsel (Already Sourced)
Will assist in Future Growth Initiatives and Potential Moonshots.
Private Alternative Investments
EID Capital - Real Estate Fund-of-Funds
EID Capital - Speculation Management (Moonshot)
EID Capital - Venture Capital (Moonshot)
3. Update Website and Headshots (DIY with Adobe Generative AI Editing)
4. Recurring Content Schedule (Organic Marketing/Engagement)
Monthly Market Update
Monthly Newsletter
Quarterly Market Commentary
One-Off Blog Posts
5. Wealth Management/Financial Planning (Open to Acquaintances)
6. College Education Funding Service (Flat Fee, One-Off Service)
Future Growth Initiatives (Listed from Short-Term to End State):
1. Leveraged ETF Portfolio Management Services and Permissions
Option to allow Leveraged ETFs in Investment Portfolios for liquidity management and/or return enhancement goals.
Portfolio Strategies and Manager Permissions:
Liquidity Management Strategy
Long-Term Return Enhancement Strategy
Tactical Beta Management Permission
Client Suitability is dependent on Beta Strategy, Target Portfolio Beta, and Maximum Portfolio Beta allowed.
Management Fees: Complimentary to Current Wealth Management Clients
2. Options - Account Permissions
Option to allow Options in Investment Portfolios for risk-management or return enhancement goals.
Speculative strategies that require margin are disallowed.
Management Fees: Complimentary to Current Wealth Management Clients
3. Wealth Management/Financial Planning (Client Focus: Oil & Gas Industry)
5. First Hire (Chief of Financial Planning)
Hire a 'Chief of Financial Planning' that shares my personal philosophy (see 'Why Not Start Big, Bigshot' below).
Would take over and have complete autonomy to manage and grow the Financial Planning business segment as they see fit.
Mentally, with four personal qualified individuals in mind, the position has already been filled. It's my job to "Give them an offer they can't refuse."
6. Wealth Management/Financial Planning (Open to General Population)
7. Private Alternative Fund-of-Fund Investments and Private Fund Consulting
Private Alternative Fund-of-Fund Investments for qualified EID Capital Clients (Accredited Investors)
Private Fund-of-Fund Investment Strategies:
Buyouts
Venture Capital
Natural Resources
Credit
Secondaries
Private Fund Managers: Two Fund-of-Fund Managers (already sourced)
Private Fund Consulting (e.g., Manager Due Diligence, Deal Analysis, etc.)
Management Fees: TBD, but probably Complimentary to Current Wealth Management Clients
Private Investment Consulting Rate: TBD
8. EID Capital - Real Estate Fund-of-Funds Series (Rule 506(c) Private Fund)
Investment Strategy: Invest in Best-of-Breed Real Estate Managers
Real Estate Manager Target Product Types: Multifamily, Industrial, Office, Retail
Investor Base: US Based Taxable Accredited Investors, no UBTI sensitive or ERISA investors, (Fund I only, keeping it simple to start)
Target: $50,000,000
Min: $25,000,000
Max: $100,000,000
Minimum Investment: $500,000 (GP may accept lower amounts)
Maximum Organization Costs: TBD, and will need Industry Contacts and Outside Counsel assistance.
Term: 12 Years + three-one year extension at GP description (LP vote after)
Management Fee: 1.00% on Committed Capital, No Fees after Year 10
Preferred Return: 10%
Carried Interest: 5%
Distribution Waterfall:
100% LP Return of Capital;
100% until 12% LP Preferred Return;
100% GP Catch-up until 95%/5% LP/GP Cumulative Distribution Split met;
95%/5% LP/GP Distribution Split thereafter.
*Vision Realized*
Maybe I'm dreaming too big, or maybe I'm not dreaming big enough but, in either case, that's the dream as it stands today. I'm excited to get moving, leveraging my 9-ish years of institutional investment experience and virtual industry rolodex I've build along the way, to accomplish these goals.
As you'll see, most of these initiatives will be completely complementary to current 'Investment Management Clients', sans the 'EID Capital - Real Estate Fund-of-Funds Series'.
Why Not Start Big, Bigshot?
Now, some might suggest that I could pursue the vision in reverse order, starting with raising a real estate fund-of-funds . Here's why I'm not doing that,
I'm not optimizing for profits, I'm optimizing for independence and a fulfilling life.
Despite journeys usually ending with a treasure at the end of the road, the prospect of riches isn't why I've had very little sleep since the start of the year. Instead my motivations,
starts with working with people I love and then extending access outward by social proximity,
building EID Capital 100% my way (for better or worse) without any outside pressure or influence,
and leaving a positive impact on my client's lives and society at large.
If I were to reverse the order of my initiatives, it would require raising outside capital by selling ownership stakes in EID Capital and raising fund capital from high-net-worth individuals or institutions I don't know.
Raising funds from strangers and relinquishing control over my business would contradict motivations #1 and #2 mentioned above, respectively. Instead, I'm willing to take the gradual approach by slowly building a client list of individuals and institutions I enjoy working with, and then having them invest in the management company or private real estate fund-of-fund (prioritizing happiness) before seeking external capital (prioritizing profits).
In conclusion, despite the lighthearted tone of this conversation, raising and managing a fund is incredibly, incredibly, one last time, INCREDIBLY, challenging endeavor, demanding substantial resources.
Simply stated, I don't have the necessary resources (time, money, and attention) to pursue the massive undertaking of raising, managing, and closing a private fund, soup-to-nuts, at this point. This is why considering an investment in the management company, requiring me to relinquishing some explicit or implicit control, becomes necessary.
Alternative Paths, Baseline Vision Options, or Organic Growth Opportunities (Intrapreneur Hire)
You never really know how initiatives will pan out until you delve into the nitty-gritty. If a goal doesn't work out for whatever reason, it's always useful to have the option to pivot or explore completely different paths if you find yourself facing a dead end.
Also, it's beneficial to entertain other business segment ideas, especially when the current vision is thriving and you want to continue innovating and pursuing exciting opportunities. But, I realize there are only so many hours in a day. If I choose to pursue the opportunities listed below, I'll likely bring on board someone with an entrepreneurial spirit to collaborate with, with the intention that this individual will eventually take charge of that business segment. Given that these initiatives fall outside the current scope of EID Capital's goals, it may be a while before I make such a hire.
I suppose if you, reader, are itching to strike it on your own and think one of my ideas sounds cool, feel free to steal the idea and get going! I'd love to help YOU when my capacity opens up and you're on your way to achieving your dreams!
1. The "Misfit" Wealth Management/Financial Planning Firm
Target Clients: Startups, Entrepreneurs, Creatives, Professional Athletes
Intrapreneur Hire: Wealth Manager/Financial Planner or Tax Professional with Target Client Experience. They will likely need to either currently or have formerly been in the Target Client Industry or Network.
2. The One Stop Institutional Shop
Private Equity, Real Estate, Venture Capital - Primary Fund Series
Co-investment and Direct Investment Optionality
Speculation Management (see 'Moonshots' below)
Outsource CIO Services
Intrapreneur Hire: Higher up at Private Equity, Real Estate, or Fund-of-Fund Company. Hedge Fund type for Speculation Management.
3. The Capital Content Creator
Wealth Management/Financial Planning Firm
Startups, Entrepreneurs, Creatives
Investing as a Subscription Offering Back Online (see Investing as a Subscription description below)
Create Edutaining Classes on Personal Finance Topics by Collaborating with Specialists/Experts and leveraging Thinkific's Platform.
Assists clients in understanding the ins-and-outs of a specific topic that they're unfamiliar with and/or has no previous experience in.
Examples: Real Estate Broker (Purchasing Your First Home), Wedding Planning (Planning a Wedding), Travel Agent (Planning a Vacation), Personal Shoppers (Buying Luxury Goods), etc.
Institutional Investment Professionals Interview-Style Podcast (Private Equity Associate, Multifamily Real Estate Firm Founder, etc.)
Intrapreneur Hire: Young, Energetic, "Positive Vibes" Wealth Manager/Financial Planner with Content Creation Experience.
"Would be Dope" and Moonshots (No Order):
Similar to the list above, the "Would be Dope" Wealth Management/Financial Planning idea (below) was just me thinking, "That would be so cool to do but I'm not currently qualified to do it and don't have the time to become qualified to do it at the moment".
"Moonshots" ideas followed the thought process, "I could probably do this eventually, but it doesn't compliment or cleanly fit with the current vision. Maybe, down the line."
"Would be Dope" - Wealth Management/Financial Planning (Client Segment Focus)
Entrepreneurs
Startups
Professional Athletes
Creatives
Moonshot #1 - EID Capital - Speculation Management
"Investment" Management for Risk of Ruin Portfolios (i.e., Portfolios with chance of an Unrecoverable Drawdown or Total Loss).
Venture Capital-like payoff structure with heavy reliance on expected value decision-making and utilizing the Kelly Criterion.
High Client Suitability Bar:
25% Savings Rate Minimum (including company match).
Debt-Free (Mortgage excluded) and Credit Check Requirement.
Funds must be purely discretionary and not expected to meet any specific funding goal.
Relevant speculation experience (e.g., Digital Asset Investors, Bettors, Poker Players) may be required.
Even if client meets all stated criteria, EID Capital can reject candidate based on "feel" of client temperament and behavior (both in cool and stressed states.)
May create 'Speculation' educational materials. Client may have to read and pass a test to qualify for service.
Must sign additional 'Speculation Agreement'.
Management Fees: Tiered, Starting at 2.00% AUM.
Moonshot #2 - EID Capital - Venture Capital
Direct Investment (EID Capital LLC Principals and qualified EID Capital clients) to start. Maybe a 506(c) Private Fund down the line.
Mentorship, assist in raising outside capital (i.e., non EID Capital affiliated individuals and entities), and provide non-capital resources (e.g., vendor network and recommendations, industry contacts) to maximize odds of startup success.
Management and Performance Fees: No Freaking Idea, Probably in the 1.00-1.50% range with carry split. Will need Industry Contacts and Outside Counsel assistance.
Content Ideas (Range of Current Initiatives to Moonshots, No Order):
Here are some general content ideas I was brainstorming on and subjects I think it would be cool to talk about. Some are easy to do and will likely be implemented within the quarter. Others will require a heavier lift and probably won't come to fruition at all.
My content creation style generally falls under three categories:
Creating content I'd find interesting if I saw it,
creating content for my close friends, who are not in the investment industry, in an informal, conversational style, as if I were chatting with them at a bar (very casual and not at all professional), and
creating more technical content for a fellow investment professional who I believe would find a topic as intriguing as I do.
If you've seen content from other investment firms, you've probably noticed that they have a vastly different tone and style compared to what you've read so far in this post. That's deliberate. I want to create content that I personally find cool, using a "Barstool" type style. It's not only more enjoyable for me to write this way, but it also provides insight into who I really am (warts and all). Additionally, this style will acts as a self-filter, helping to weed out potential clients who might find it "unprofessional" and for whom a professional relationship wouldn't work out anyways, ultimately saving everyone valuable time.
Finally, I'm not big into creating content for the general masses. It's just such a slog to do. I've found when creating for the masses, it's a near guarantee that there are reams of content on the topic already. I mean do we really need another post on how much you could save if stopped drinking Starbucks ? Kill me.
Anywho, below is the content list, let me know what you think!
1. Recurring content discussing EID Capital's journey over time (The EID Capital Diaries: Five Things I've Learned Since Going All-In On EID Capital)
2. Recurring 'Speculating Wildly' segment where I speculate wildly on the long-term impact of emerging products and services (Speculating Wildly: AR Will Disrupt the Real Estate Market). It's called speculating wildly because, well, I'm speculating wildly (and maybe borderline irresponsibly.)
3. Repurposing Blog Posts as YouTube Videos. Then Imbedding Repurposed YouTube Videos into Blog Posts.
4. Collaborate with Experts in Creating Edutaining content/classes on Personal Finance topics (e.g., Real Estate Broker (Purchasing Your First Home), Wedding Planner (Planning a Wedding), etc.)
5. Podcast interviewing various Institutional Investment Professionals (e.g., Private Equity Associate, Multifamily Real Estate Firm Founder, etc.). Least likely to happen.
6. Periodic Livestreams (quarterly market commentary, Q&A sessions, etc.)
On the Backburner - The 'Investing as a Subscription' Service
Yes, EID Capital currently offers the 'Investing as a Subscription' service, but it will be shutting down soon. The initial idea behind starting the service was to get young people to start investing early, capitalizing on the power of compound interest, while keeping it affordable. This was driven by the fact that younger generations face a more challenging financial landscape than their parents' before them.
As far as the service offering, clients paid a $30/month fee for one account only and received the following:
An EID Capital Investment Portfolio, offered through robo-advisor Betterment, that best fits their risk-tolerance and funding goal.
A monthly livestream, that included a market update and educational seminar. At the end of the presentation, there was time left over for clients to ask questions.
If a client couldn't make the livestream, were too shy to ask questions on the livestream, or the question involved sensitive client-specific information that would be inappropriate to ask publically, they had the ability to directly contact EID Capital at any time.
At this point, the opportunity costs for me continuing with this offering are too great. It needs a lot more work on automation, likely through a platform like Zapier, as well as a ton of targeted marketing to achieve the scale necessary for success. To illustrate, it took me at least 10 hours each month to create relevant and engaging market commentary that wouldn't put clients to sleep, along with scripting the educational content. That's time I simply don't have right now.
It sorta breaks my heart, because I believe this service could greatly benefit a segment of the population that desperately needs it. I still think it's a great idea and it's something I may consider reimplementing in the distant future. Who knows, maybe I'll eventually hire someone who will be dedicated to its success.
If you're interested in implementing something like the 'Investing as a Subscription' for yourself or at your firm, I'm happy to be a resource!
Parting Thoughts
That's all I got for now, and I don't feel like writing an outro. If you'd like to connect, please don't hesitate to reach out! I love collaborating with others, even though I currently lack the financial resources to provide compensation.
For now, it's time for me to catch up on some much-needed sleep and tackle my existing workload.
All the best!
Scott L.
Because Lawyers Gonna Lawyer
Disclaimer: This blog post is for informational purposes only and does not constitute a solicitation, offer, or recommendation to buy or sell any securities or investment products. The information provided herein is based on the future plans of EID Capital, LLC. It should not be construed as an endorsement or commitment to offer any specific investment products or services in the future.
EID Capital, LLC reserves the right, at its sole discretion, to modify, amend, or discontinue any investment products or services mentioned herein, including but not limited to the economic terms associated with such offerings. EID Capital further reserves the right to make changes to the availability, characteristics, and economic terms of any future investment products or offerings without prior notification. These changes may be influenced by regulatory requirements, evolving market conditions, and various other factors.
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