Richard Wilson: a small first investment and a larger capacity

Richard distinguished an investor's capacity to invest from the size of the first commitment they might choose.

A first commitment could be a test

While discussing minimum investment sizes, he said someone capable of investing more might want to begin with less. The first commitment could be smaller than the person's capacity.

He also described an administrative cost

Richard noted the work of managing many smaller investors. His discussion included share classes as one possible way of differentiating participation.

In Richard C. Wilson's words

"might want to test you out" (Richard C. Wilson, recorded Rainmaker Series module)

How to use this

Distinguish capacity from the proposed first commitment in meeting notes.
Record the administrative work associated with different participation sizes.

Questions and answers

What did a small first commitment mean in the example?

It could be a test of the relationship before making a larger commitment.