PRO-TIP Incentivize Investors to Put in More Cash

If the minimum is 50 grand or a hundred grand, that’s what an investor is going to put in, especially a first-time investor in your fund. It’s just human nature. They’re going to put the minimum. So giving them that little carrot to give them a little bit better terms, if they give you more money or maybe some perks, that’s a structure that I think works very well. And those are sort of at the same level. It’s not like a preferred equity where somebody has got sort of a first in first out, but they are different classes of units or classes of shares in a particular syndication. And they just have better terms. Like if the regular terms might be an 8% PREF and 70-30, but if you put in 250, then you’re going to get a 10% PREF and you’re going to get a 75-25. So your IRR will be a little bit higher than everybody else. And if you put in 500 grand, then you’re going to get 12% PREF or whatever you want to do, but you’re constantly giving them a little bit more of a carrot.