Experience vs Numbers—Which Matters More for Funding?

Question

Do you think experience carries more weight than numbers when securing capital?

Would love to hear perspectives from both newer and seasoned investors.

Doug Smith · Answer

That's like saying what's more important, the heart or the brain. Both are very important. When we look at a deal, we know that new investors don't know what they don't know and, despite honesty and good intentions, often get themselves in trouble by missing things. Also, if the numbers don't work on a deal, they don't work. I would contend that it's not an either/or. At least for us, we're going to consider both as very important.

Benjamin Aaker · Answer

What's required? Your deal has to have the underwriting. If the numbers don't work, the money won't come. Experience is very important too. You didn't say where the money is coming from. Most lenders will want some experience, but if the terms are right, might take some additional risk in someone who doesn't have a lot of experience.

Pierre Guirguis · Answer

In practice, it’s not experience or numbers, it’s how the two interact.

Strong numbers can get a newer investor in the door, but they’re usually underwritten more conservatively. Lower leverage, more liquidity required, less tolerance for execution risk.

Experience doesn’t replace weak numbers, but it does buy flexibility. Lenders and capital partners are more willing to lean into edge cases, tighter timelines, or unconventional structures when they’ve seen someone execute before.

Where deals really get stuck is when numbers are thin and experience is light. In that case, no amount of storytelling closes the gap.

The cleanest executions I see tend to have one of two things: either very strong fundamentals, or a sponsor with a track record that reduces perceived risk. Having both just widens the margin for error.

Mike Klarman · Answer

Even if a complete rookie comes in with the deal of the century, you may not get funding.  But an experienced investor can submit just an ok deal and get approval so I'd say in todays climate showing exits without delinquency or foreclosure goes a very long way.  More so than finding that unbelievable deal.  Because even if you did find that deal, it can wind up being a sh!t show and then the fact that it was great matters no longer.

Think about you have your last 100k on earth.  Two investors both willing to pay you 12% on your capital.  One has 5 exits and a clean record but his property is just ok, the other is a complete newbie with an outlier property and high hopes.  Who you lending to?

Samuel Awosolu · Answer

Hey Michael,

I can tell you it depends on the type of capital you are trying to secure. Private and hard money lenders would prefer the investor have experience, a track record, good systems in place, risk management, and the ability to execute. They like it if you have taken deals full‑cycle. To them you would be considered low risk and are likely to get funding for your deals with standard to favorable terms.

If you go the traditional banking or the institutional route. They care more about credit, in some cases your debt to income, reserves, and whether the deal cash-flows. You could be brand new or a 20 year vet. If the numbers don't meet or fit their guidelines. They won't fund it.

Experience vs Numbers—Which Matters More for Funding?

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