Want to raise capital faster? Here are 3 proven ways to create urgency with prospective investors, so they get off the fence and write you a check.
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Learn how to launch your own private fund or real estate syndication with Fund Playbook. In each episode, Jimmy Atkinson shares insights on syndicating deals, raising capital, and entrepreneurship.
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Episode Transcript Summary
Raising capital can often feel like a slow, frustrating process, especially when investors show interest but fail to commit. In this episode of Fund Playbook, Jimmy Atkinson and Andy Hagans discuss how to use urgency and scarcity to encourage investors to act quickly. By applying these psychological triggers, fund managers can speed up capital raising and avoid wasting time on hesitant prospects.
In addition to urgency, the discussion covers market trends, asset classes that are easier or harder to raise capital for, and the costs involved in setting up a securities-compliant fund.
The Psychology of Urgency
Most investors procrastinate—even when they’re interested. A small percentage will commit immediately, while others will pass outright. However, the largest group consists of those who remain undecided, often indefinitely.
Urgency works because it forces investors to make a decision. By giving them a reason to act now, fund managers can convert interest into commitments and close more capital, faster.
Three Proven Strategies to Create Urgency
- Deadlines – External time constraints that force action.
- Scarcity – Limited availability that increases demand.
- Timing Incentives – Rewards for early investors.
Each of these techniques works because they align with natural human behavior, encouraging prospects to act before they lose out on an opportunity.
Using Deadlines to Drive Action
Deadlines provide a built-in reason for investors to act. Some deadlines are inherent in the investment structure, such as:
- 1031 exchanges – Investors have 180 days to reinvest capital gains.
- Opportunity Zone funds – OZ investors must reinvest gains within 180 days.
- Year-end tax planning – Many investors allocate capital before December 31 for tax benefits.
For funds without built-in deadlines, sponsors can create their own by:
- Setting a fund closing date (e.g., “We’re closing this round on March 31”).
- Limiting capital raises to specific rounds (forcing investors to wait if they don’t commit).
- Clearly communicating that the opportunity won’t remain open indefinitely.
Deadlines help investors prioritize your fund instead of delaying indefinitely.
Leveraging Scarcity to Build Demand
Scarcity increases perceived value and drives urgency. Some ways to implement it include:
- Capping the capital raise (e.g., “We’re only raising $10 million in this round”).
- Framing the opportunity as limited (e.g., “Only $1 million left before we close”).
- Highlighting demand (e.g., “We’re already 90% subscribed—act now”).
Even smaller funds can use scarcity to their advantage. Smaller, well-managed deals often perform well, making them highly sought-after opportunities for investors who value exclusivity.
Timing Incentives to Reward Early Investors
Timing incentives encourage investors to commit sooner by offering additional benefits for early participation. Common examples include:
- Bonus shares – Investors who commit early receive additional equity.
- Discounted pricing – Early investors get in at a lower valuation.
- Preferred terms – First-round investors may receive higher preferred returns.
For example, some funds offer a sliding scale of bonus shares—investors who commit in January get a 4% bonus, those in April get 3%, and by October, the incentive disappears. This gives investors a tangible reason to act sooner rather than later.
Case Study: Effective Use of Urgency in Marketing
Aspen Funds successfully implemented urgency in an email campaign by:
- Using a clear deadline (“Last day before we go public”).
- Offering a 5% discount on shares for early investors.
- Stating limited availability (“Capped at $15 million, first-come, first-served”).
This approach ensures investors understand that waiting too long means missing out on exclusive benefits.
Market Trends: Which Asset Classes Are Easier or Harder to Raise Capital For?
The discussion also covered current trends in fundraising and which asset classes are attracting the most investor interest in 2025.
Easier to Raise Capital For:
- Private credit – High interest rates have made private credit more attractive.
- Multifamily (selectively) – While some markets have cooled, demand for housing remains strong.
- Self-storage – Recession-resistant and historically strong performance.
- Hotels – The sector has rebounded significantly since the pandemic.
- Build-to-rent single-family communities – High demand due to affordability challenges in homeownership.
More Challenging to Raise Capital For:
- Office buildings – High vacancy rates and structural challenges in urban office markets.
- Certain development projects – High construction costs and difficulty in securing financing.
- Venture capital – Too many funds chasing fewer deals, making it harder to stand out.
Fund managers should focus on asset classes that align with investor demand while ensuring deals pencil out in today’s economic environment.
Costs of Hiring a Securities Attorney for Fund Structuring
Raising capital legally requires compliance with securities laws, which means hiring an experienced securities attorney to draft proper documentation.
Typical costs include:
- $2,500–$5,000 for basic LLC formation and structuring.
- $20,000–$30,000 for a complete private placement memorandum (PPM), operating agreement, and subscription package.
Trying to cut corners on legal costs is not advisable—a well-structured offering reduces liability and increases investor confidence.
The Importance of Being Credible
Urgency and scarcity only work if they are real and enforceable. False deadlines or artificial scarcity can damage credibility and erode investor trust. Fund managers must follow through on their commitments—if a round closes on June 30, it should truly close, not quietly extend.
Final Takeaways
- Investors naturally procrastinate—urgency helps them take action.
- Deadlines, scarcity, and timing incentives can speed up fundraising.
- Clearly communicate urgency in emails, pitch decks, and investor calls.
- Keep credibility intact by only using real deadlines and incentives.
- Certain asset classes, like private credit and build-to-rent housing, are attracting strong investor interest.
- Raising capital legally requires a securities attorney—budget at least $20,000–$30,000 for legal fees.
- Fundraising is a long-term process, but urgency can help shorten the timeline.
The next Fund Playbook live stream will take place next Thursday at 3 PM ET. Be sure to subscribe and join the conversation!