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Starting an investment business

post #1 of 273
Thread Starter 
Hey all,

I'm in the process of starting my own business -- a money management fund built on an investment algorithm that I've been building with a good friend of mine who is a stats PhD student.

We have a timeline for building a track record on both a portfolio simulator and then a relatively small-money test fund, and we are confident we can raise seed-capital to operate for at least the first year, but I wanted to ask if anyone here has ever started their own fund.

Are there any specific places to go for rounds of fundraising, just how huge is the legal headache, how long before you turned a profit -- any advice would be welcome. Thanks.
post #2 of 273
Quote:
a money management fund built on an investment algorithm that I've been building with a good friend of mine who is a stats PhD student.

Good luck.

P.S. Are you serious?
post #3 of 273
Thread Starter 
Quote:
Originally Posted by harvey_birdman View Post

Quote:
a money management fund built on an investment algorithm that I've been building with a good friend of mine who is a stats PhD student.

Good luck.

P.S. Are you serious?

Haha, yeah we're serious. Our returns in backtesting look that good. We've had it looked over by a professional trader who verified that our methods and assumptions checked out, and we're confident we have access to enough funding when the time comes.
post #4 of 273
post #5 of 273
Thread Starter 
I'm surprised there aren't more professional traders on this board.

Anyway, we're taking our model "live" on an investment simulator going forward. We finally nailed down an alpha build today -- it validated at a 200% return from january 1st 2010 through today. icon_gu_b_slayer[1].gif
post #6 of 273
Quote:
Originally Posted by NameBack View Post

I'm surprised there aren't more professional traders on this board.
Anyway, we're taking our model "live" on an investment simulator going forward. We finally nailed down an alpha build today -- it validated at a 200% return from january 1st 2010 through today. icon_gu_b_slayer[1].gif

?
post #7 of 273
Quote:
Originally Posted by harvey_birdman View Post

?

I think he's saying they simulated it with the market conditions from Jan 2010 until now and it gave them 200% ROI?
post #8 of 273
I believe in you.

PM me when you are going public.
post #9 of 273
I believe in you.

PM me when you get sued.
post #10 of 273
Isn't this the way Bernie Madoff got his start?
post #11 of 273
will you allow SFers in under the table in small amounts?
post #12 of 273
Good luck,

Just so you know, many traders get their clientele from real world connections, family, friends, colleagues etc..

Best way is to get a name start getting investors and for fundraising. Maybe look for a round of angel investors and pitch your plan to them. (I don't think its often they would invest in something like this, but you might find someone within a group that may be interested)
post #13 of 273
Quote:
Originally Posted by NameBack View Post

I'm surprised there aren't more professional traders on this board.

Have you seen how professional traders dress?

There's probably on average 1 guy per firm that would have any interest in being a poster here (but they typically don't have the downtime/ability to post while working like so many posters here).
post #14 of 273
Quote:
Originally Posted by NameBack View Post

I'm surprised there aren't more professional traders on this board.
Anyway, we're taking our model "live" on an investment simulator going forward. We finally nailed down an alpha build today -- it validated at a 200% return from january 1st 2010 through today. icon_gu_b_slayer[1].gif

So... what data did you use to build the model? Surely not the same data you validated it against?
post #15 of 273
Talk to a lawyer, get a prospectus and show the numbers clearly and make sure they can be verified. I'd be interested in investing as well if you will take smaller amounts (don't know how much you are trying to raise...)
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