The $200K Education: How I Learned Fund Formation is a Scam

and Built LP Blueprint to Help People Lose Less Fast

WHY D.F.A. CAPITAL DIED:

A Punk Promoter's Guide to Losing Everything and Finding Your Real Business

I. The Setup: I Was a Schmuck Too

In summer of 2021, I was fresh off a divorce, and by summer 2022, I had the proceeds from the sale of my second home in hand.

I had recently left my startup job, my first where I held a finance job title (Venture Partner at a $5M micro-fund).

I'd been successfully self-employed for chunks of my career - 2006-2007, 2008-2012 - and I knew I could do it again.

I wasn't some naive wannabe. I'd been in sales since 1999, built a successful social media consultancy in 2008, and written a #1 Amazon bestseller on social media in 2011. I'd promoted 100 punk shows, made 100,000 cold calls, and now I had finance experience. Someone with my background should have been able to raise $30M, right?

I was a schmuck who completely fell for the meritocracy myth. I believed that if I just "did better, learned more, tried harder" I would attract LPs and succeed. I paid a fund admin company $10K for software and my attorney $3-6K for an LPA, thinking I was checking all the boxes that "real" funds check.

I even thought I was super smart because I approached Nathan Beckord (who had already built Foundersuite) about building a cool deal management and investor data product for investment firms called Fundingstack, with the idea that I could sell that product while building a VC firm. How naive I was! I thought I could bootstrap my way to success by working on two fronts simultaneously.

I was radically undercapitalized from day one, burning $10K a month with no other income, but I thought hustle and competence would overcome that. I should have known better.

II. The Meritocracy Lie in Action

The progress felt real. Over the next year, I managed to build a pipeline and bring in $2M in verbal commitments from actual LPs - not tire-kickers, but real institutional investors who understood the thesis (future of CRM, ERP and sales).

I tried three separate times to bring on a co-GP, knowing I needed more resources. The meetings were productive, the relationships were building.

This is exactly what the system tells you success looks like: good meetings, real interest, legitimate progress. I was doing everything the playbooks said to do. But here's what no one tells you: raising $30M takes 18-24 months minimum, and I was burning through $10K a month with no other income.

I wasn't failing - I was succeeding too slowly in a system designed to crush people like me.

III. The Reality: The System is Rigged

By month 6, I realized I needed an anchor LP. By month 9, I would have taken any LP willing to wire money. By month 12, I was putting personal expenses on credit cards - something I hadn't done in many years. The $2M in commitments felt substantial, but verbal commitments don't pay fund admin invoices or legal fees.

I had track record as an angel investor in companies like AngelList and Scout, equity stakes from advisory work, and real LP relationships. I was building something legitimate. But I was hemorrhaging operating capital with no team to share the load.

The system doesn't care about your thesis, your track record, or your relationships. It cares about whether you can survive 18-24 months of burning cash while playing their game. Most people can't. That's not a bug - it's a feature.

IV. The Punk Rock Wake-Up Call

I'd promoted over 100 punk shows in Palo Alto, Madison, La Crosse, Chicago and Milwaukee. Every show needed four things: a venue, bands, a crowd, and money upfront to make it happen. Miss any one element, and the show dies.

But here's the thing: I'd been listening to Give 'Em Enough Rope by The Clash since I was 11. I knew systems were rigged. I knew the house always wins. I knew that the people selling you the dream are the ones making money off your failure.

Yet I still fell for it. I still believed that if I just worked harder, networked better, pitched more convincingly, I could beat a system designed to exclude people like me. The punk rock kid who knew better became the schmuck who thought he was different.

V. The Collapse: Why This All Matters More Now

While D.F.A. Capital was slowly bleeding out, I helped another GP polish their fundraising deck. They raised $30M in 3 months. Got solid results for the largest Christian PE/VC fund in the world on a different project with my team.

As I watched them succeed where I was struggling, it hit me: I was better at helping others navigate the system than playing it myself.

But here's the bigger realization: the VC model is beginning to collapse, and AI is ascending fast. I realized that all fund managers are going to lose. It's just a question of who wants to lose the least fast.

The game is ending. The question isn't how to win anymore - it's how to survive the transition.

VI. The Solution: LP Blueprint as Survival Tool

After D.F.A. Capital died, I didn't disappear. In early 2024, I started Lead Zeppelin, performing demand generation for GPs. I figured if I could get meetings, I could help other GPs succeed where I'd struggled. But getting meetings wasn't it. GPs would get in front of LPs but still couldn't close. I saw they were saying and doing things that LPs just didn’t need or want.

By October 2024, Substack kept bugging me to launch the paid version of my newsletter. When I put a $25 monthly subscription on it, people started paying me immediately and logging into my Discord immediately. There was real and immediate demand for what I was building. I wasn’t bullshitting GPs.

But there was one problem. I noticed that a lot of the people who were enrolling in our Mastermind (what we now call Capital OS Premium) were also undercapitalized - just like I had been. They were falling into the same trap.

The breakthrough came in June 2025 when I realized that LPs didn't want me to work with any GP that wasn't raising according to ILPA/Kauffman Fellows guidelines (you can request to review this doc if you’d like). So a few months ago we began enforcing an Operating Agreement that's aligned to those standards.

Beginning August 1, all subscriptions are $100/month or $1k/year and we will only work with institutional grade funds.

All LPs in our directories will only be $1M+ checks as well. We are shifting to an institutional-only focus. We’re doing this because we can’t help fund managers who are undercapitalized attract LP capital. LPs are not interested.

This isn't about being elitist - it's about being realistic. If you can't afford $100/month, you probably can't afford to raise an institutional fund. And if LPs don't want to work with undercapitalized GPs, it doesn’t help LPs or GPs for our team to facilitate those conversations.

We are not trying to lower the capital requirements for institutional fund formation - because that would be setting people up to fail.

We are trying to solve the problem that happened to me. We are trying to show people very clearly that if you want to raise a $100M fund, you need $2M cash in a garbage bag and 7-8 people. Period.

A lot of what I do when I'm working with my GPs (and SVPs of IR) is helping them get real about their feelings about money, LP pain, and asking very difficult questions and having difficult conversations.

The punk rock approach isn't just about seeing through the system - it's about confronting the uncomfortable truths about your own capacity and resources.

If you don't have that, don't start. Save yourself the $200K education I got.

It wasn't about meetings. It wasn't about decks. It was about standards.

LPs wanted to see GPs who understood the institutional framework, not just guys with good ideas and hustle. That's when Lead Zeppelin became LP Blueprint. A blueprint is a set of standards and frameworks that are proven to be effective.

VII. The Lesson: Lose Less Fast

I spent $200K learning that fund formation is a scam designed to make schmucks like me believe that merit matters.

Under-resourced doesn't equal scrappy - it equals dead.

You can have the best thesis, real LP interest, and legitimate progress, but if you can't survive the 18-24 month fundraising timeline, none of it matters. You will crumble and die out there.

The solution isn't better decks or more coffee meetings. It's understanding that the system is rigged, the game is ending, and your job is to lose less fast than everyone else.

LP Blueprint doesn't help you win the old game - it helps you survive the collapse. Because I learned the hard way that the house always wins, but sometimes you can walk away with your shirt.

VIII. Why Was This So Painful To Write?

I've been putting off writing this story for months because I was carrying shame about something that wasn't actually shameful. I didn't realize it for a long time.

I'd internalized a narrative that I was a failure who couldn't execute - a 44-year-old who got laid off when that first finance company shut down after six months, couldn't raise a fund, couldn't make it work. The pattern felt damning even though the reality was much more nuanced.

But writing this forced me to confront what actually happened: I had $2M in commitments, a legitimate track record, and lots of real LP relationships. I wasn't failing - I was succeeding in a broken system designed to crush people like me.

The hardest part of writing this wasn't reliving the financial stress or the failed meetings. It was letting go of the shame story I'd been telling myself and acknowledging that maybe, just maybe, I wasn't the problem. The system was.

And now, my team and I help other brave people navigate the collapse while losing less fast.