The Pitch fund is raising their Fund I in public
A few weeks ago I wrote about the process of fundraising for a fund using Reg D 506(c)... aka raising in public. The piece focused mostly on the mechanics of raising in public.
Well, recently I got the chance to interview Josh Muccio, co-founder of The Pitch and emerging fund manager. Josh is in the midst of raising his first fund, and he's using 506(c) to do it.
I got on a call with Josh to get a little more context about what the experience is like to raise a fund in public. Not gonna lie... I expected a pretty dry conversation about how annoying the paperwork is.
I was wrong.
Instead, I heard a fascinating story. And Josh gave me the green light to share it with all of you. Here goes...
*By the way, I think I have to disclose that I’m an angel investor in The Pitch media company. Although I would 100% write this article even if I wasn’t.*
Josh and his co-founder (and wife) Lisa started a podcast back in 2015. They called it The Pitch.The idea was to bring in early-stage founders to pitch to a panel of investors. Those investors would give candid, real-time feedback to these founders... then have an opportunity to invest.
And the whole thing would be broadcast to a global audience.
Two years later, they finally got the attention of a certain venture-backed podcast studio, Gimlet Media. The Pitch was acquired by Gimlet in 2017. Josh and Lisa produced 8 more seasons of The Pitch under the Gimlet Media umbrella. Then, in 2019, Gimlet was acquired by Spotify.
By this time, Josh and Lisa had produced over 60 episodes of The Pitch... each one featuring a different startup. And the applications from hopeful founders who wanted to get on the show just kept flowing in.
You know who didn't care about The Pitch's growing audience? Covid. And during Covid, Spotify opted to pause production on a number of podcasts, including The Pitch.
In 2022, after 2 years of watching The Pitch collect dust, Josh and Lisa did something a little unorthodox. They bought the show back from Spotify. And in November of 2022, Josh and Lisa launched Season 9 of The Pitch.
But instead of showcasing a tech startup founder, this episode featured Josh and Lisa Muccio, co-founders of The Pitch, pitching The Pitch Fund.
The Accidental VC
Josh and Lisa started The Pitch because they wanted to democratize access to capital for early-stage startups.
They had always planned to build in angel investor access... giving listeners in their audience the opportunity to invest in the startups featured on the show. But they never considered starting a fund, themselves.
It wasn't until one of their VC panelists suggested it that they began to consider putting "The Pitch Fund" on the roadmap.
At the time they heard this suggestion, The Pitch was part of Gimlet Media, and raising a fund wasn't part of Gimlet Media's master plan. So Josh and Lisa shelved the idea. They kept the idea on the shelf until they re-gained ownership of the podcast, and started pitching VCs for funding as a media startup.
The problem is, VCs don't really like investing in media companies (this is why).
Most of the VCs that Josh pitched weren't that interested in investing in the media business. But when Josh explained the 3-year plan for the company – a plan that included launching a fund – investors' ears perked right up.
See, The Pitch gets a constant influx of applications from founders who want to pitch on the show. They have built-in dealflow that most VCs spend their entire careers chasing. They also have a massive audience of investors and potential buyers that the startups are marketing to, just by being on the show.
That dealflow and that exposure? That's the stuff of LP dreams.
After hearing this same feedback from investors over and over again, Josh and Lisa started re-thinking their 3-year plan for the media company. Maybe launching a fund shouldn't be a long-term goal. Maybe it should be their next step.
Josh goes on The Pitch
After deciding to take the leap into venture capital, Josh did something he thought he'd never do. He pitched his own company on The Pitch.
Josh had always said he'd never go on his own show. He was terrified that if he was horrible at pitching to VCs – the very thing he's supposed to be an expert in – that the credibility of the show would be compromised.
But when a founder cancelled his podcast appearance last minute, Josh and Lisa felt like destiny was calling. And they decided to fill the spot themselves. Best part? They completely winged it.
"Episode #101: Josh Pitches The Pitch" was broadcast to the world in November 2022. It was the season premiere of season 9. And in this episode, Josh and Lisa pitched their media company to the investors on their show while simultaneously pitching The Pitch Fund to listeners.
They were only able to do this because he had filed Reg D form 506(c), which allowed them to fundraise publicly.
When I asked Josh to explain the paperwork process for me, I expected some lengthy, boring explanation. But what I got was far simpler: Josh used AngelList. AngelList makes it crazy easy to set up a fund, and to raise under 506(c) with basically the press of a button.
Anyway, since The Pitch had a massive audience of listeners, and had spent years building trust with this audience... and since their audience was full of investors... the fund got a lot of interest from listeners.
Within 7 days of broadcasting the podcast episode, 83 hopeful LPs had applied to contribute $1.5m in investment for The Pitch Fund.
Converting the applications
For The Pitch, getting applications from investors wasn't the hard part (lucky ducks). The hard part was actually converting those applications into LPs.
The applications made it seem like these investors were 100% ready to sign on the dotted line. But when Josh sent them the link to complete the process, most investors went dark.
Ugh. Conversion rates. Not just a founder headache. A VC headache, too.
Josh and Lisa quickly realized they couldn't rely on their reputation as podcast founders and hosts. They had to get on the phone with these investors and actually close them.
Where the fund's at now
One year and a lot of phone calls later, The Pitch Fund just passed about $2m in funding from LPs. They've deployed checks into 7 different startups, all of which are companies that pitched on the show.
And while Josh and Lisa don't aggressively market the fund on social media anymore, they continue to get interest from LPs just through their listeners.
See, every time The Pitch invests on the show, they get a new influx of applications from potential LPs. And for Josh, this is ideal. He'd rather have an LP base that comes directly from his audience rather than pitch a bunch of strangers. And not just because pitching strangers is exhausting and hard.
Josh wants to raise from his listeners because the listeners get the inside scoop into why each investment decision is made.
The education and transparency that The Pitch LPs get is pretty unique. And the result is that The Pitch Fund's LP base has morphed into a community of investors who engage more with the brand than is typical for a new fund.
We don't all have a podcast with hundreds of thousands of listeners. But this asset – their audience – is what's made fundraising for The Pitch Fund doable. So if you're reading this and thinking about raising a fund sometime in the next few years, now is a great time to start building an audience.