|
Coming from the tech/startup world I have a pretty good understanding how to get a business off the ground (a successful exit is a different matter) in that space. If I think I have a better way to do online marketing attribution or alerting on abnormal server performance, there's a clear path to turn that into a company. It involves writing the initial version of the software, filling for an LLC where you trade a little bit of cash and the IP for your founder's shares. Depending on the exact nature of the business raise somewhere in the ballpark of $200k from a friends and family or angel round to pay for AWS fees and maybe an employee (who also gets a bunch of equity) or some marketing. Then go try to sell your SaaS offering to potential clients. If I have a better way of picking stocks or valuing options and want to launch a hedge fund (or other buy side firm), what's the equivalent story look like? What's the bare minimum for pre-funding organizational expenses? By funding I mean raising AUM. I think I need to raise both investment funds and equity in the "firm" itself. How are those split? Presumably the firm's assets and the portfolio are segregated, but I really have no idea. Am I thinking about this correctly at all?
|
#
?
Jul 17, 2017 01:11
|
|
|
|
| # ? Apr 23, 2024 15:41 |
|
|
Are you an accredited investor yet?
|
|
#
?
Jul 17, 2017 03:42
|
|
|
Pryor on Fire posted:Are you an accredited investor yet? Yes
|
|
#
?
Jul 17, 2017 05:25
|
|
|
Are you doing prop trading or a hedge fund?
|
|
#
?
Jul 17, 2017 21:31
|
|
|
I'm pretty sure the answer is bitcoin
|
|
#
?
Jul 18, 2017 06:01
|
|
|
ohgodwhat posted:Are you doing prop trading or a hedge fund? Let's go with hedge fund. I assume the answer for prop trading is, "just start trading your portfolio," but if not I'm be curious how it differs.
|
|
#
?
Jul 18, 2017 13:03
|
|
|
http://www.investopedia.com/articles/financial-theory/11/how-to-legally-form-a-hedge-fund.asp
|
|
#
?
Aug 24, 2017 17:03
|
|
|
I mean bare minimum start up costs for a legit (read institutional investors will look at you) fund are around $500,000. Most of this is legal cost related as getting the fund structure in place, filing the right forms, and getting a fair LPA in place is not cheap. You will want to engage several service providers including an admin (10 bps of AUM expense), auditor ($$75,000 minimum depending on investment complexity), legal counsel, etc. To start marketing, you need an audited track record. Institutional investors will want to see a few years of successfully managing capital. Your $200,000 in family money is meaningless. When I worked at a start up hedge fund, the founders were in for over $5mm in capital and that only got them off the ground with ~$150mm in contributions, this is considered a highly successful launch mind you,
|
|
#
?
Aug 25, 2017 04:11
|
|
|
FWIW, I have a friend in NYC with a very small fund (a bit over $5m AUM). He said that he still needed to raise more capital (I think he said another $5m) before he could really work with larger institutions. He went out on his own after having 1 year of IB experience and something like 3-4 years of experience working at a hedge fund.
|
|
#
?
Sep 22, 2017 22:00
|
|
|
KernelSlanders posted:If I have a better way of picking stocks or valuing options If this is true, why do you need outside investors? Just raise the money yourself from you amazing stock picking skills.
|
|
#
?
Sep 25, 2017 00:07
|
|
|
Fozzy The Bear posted:If this is true, why do you need outside investors? Just raise the money yourself from you amazing stock picking skills. The better way is him earning a fee, not actually picking things that have better returns.
|
|
#
?
Sep 25, 2017 18:46
|
|
|
Elephanthead posted:The better way is him earning a fee, not actually picking things that have better returns. In the sense that it lets him de-risk by risking other people's money, sure!
|
|
#
?
Sep 25, 2017 21:53
|
|
|
|
|
#
?
Sep 25, 2017 22:31
|
|
|
Fozzy The Bear posted:If this is true, why do you need outside investors? Just raise the money yourself from you amazing stock picking skills. leverage baby
|
|
#
?
Sep 26, 2017 07:45
|
|
|
|
| # ? Apr 23, 2024 15:41 |
|
|
This seems like a really promising thread, keep us posted.
|
|
#
?
Sep 28, 2017 13:14
|
|
