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Starting an investment business - Page 17

post #241 of 273
Like I said at the outset, this was always bound to be a dull discussion.

Was the Maroon 5 show as wonderfully awkward as I've heard?
post #242 of 273
Thread Starter 
Quote:
Originally Posted by Cantabrigian View Post

Like I said at the outset, this was always bound to be a dull discussion.
Was the Maroon 5 show as wonderfully awkward as I've heard?

I skipped it -- went directly out to the clubs that night instead with some guys from Rothstein and Lazard. I heard they were pretty good, actually, but that the crowd just had no idea who the fuck they were or what was going on.
post #243 of 273
You started this up yet?
post #244 of 273
Thread Starter 
Quote:
Originally Posted by idfnl View Post

You started this up yet?

We just engaged a law firm to begin doing the docs. We plan to be ready to accept funds on July 1st. Whether we have any funds to accept at that time is up in the air, however.
post #245 of 273
Quote:
Originally Posted by NameBack View Post

We just engaged a law firm to begin doing the docs. We plan to be ready to accept funds on July 1st. Whether we have any funds to accept at that time is up in the air, however.

I'll kick in 20. See how you do with it, go from there.
post #246 of 273
Because I know nothing of this, I am curious, if you strike it rich with this, do these kind of things end up with the creators being recognized (beyond some arcane network of people), or will you just be raking in the money while the big machine of finance rolls on anonymously?

Or is it?

"All I want is money, fuck the fame I'm a simple man"
post #247 of 273
Quote:
Originally Posted by NameBack View Post

We just engaged a law firm to begin doing the docs. We plan to be ready to accept funds on July 1st. Whether we have any funds to accept at that time is up in the air, however.

...Don't you have to be registered with the SEC first to call yourself an active fund?
post #248 of 273
Thread Starter 
Quote:
Originally Posted by nahneun View Post

...Don't you have to be registered with the SEC first to call yourself an active fund?

Only if you manage $100mil or more.
post #249 of 273
It seems odd to me that you couldn't start this at a prop shop. Skip the expensive legal fees, hone the craft and play with OPM. Seems like if the strategy was that soild every prop shop would be fighting over you. You could establish this there, get a track record then spin the thing off to your own fund without having to give up anything. Also, every one at those conferences has the deepest pockets in the world, that is until it is actually time to cough up real dough and the alligator arms come out. People at top established funds are facing severe headwinds trying to raise money. Good luck with this, but you should really consider the prop shop route.
post #250 of 273
Quote:
Originally Posted by Beckwith View Post

It seems odd to me that you couldn't start this at a prop shop. Skip the expensive legal fees, hone the craft and play with OPM. Seems like if the strategy was that soild every prop shop would be fighting over you. You could establish this there, get a track record then spin the thing off to your own fund without having to give up anything. Also, every one at those conferences has the deepest pockets in the world, that is until it is actually time to cough up real dough and the alligator arms come out. People at top established funds are facing severe headwinds trying to raise money. Good luck with this, but you should really consider the prop shop route.

This is what I said. But what do I know? I'm merely a professional trader.

Seriously, they already have the infrastructure / low latency networks that you'll need and many should be able to put you on a 50 / 50 split. And even if they don't give you 50 / 50 (usually the better prop firms give you less of a % because they are dedicating more to resources / developers / infrastructure), you should still beat out the 2 / 20 because the 2 won't be jack and you should get at least 20 from a prop firm if properly negotiated.
post #251 of 273
Thread Starter 
Quote:
Originally Posted by deepitm View Post

This is what I said. But what do I know? I'm merely a professional trader.
Seriously, they already have the infrastructure / low latency networks that you'll need and many should be able to put you on a 50 / 50 split. And even if they don't give you 50 / 50 (usually the better prop firms give you less of a % because they are dedicating more to resources / developers / infrastructure), you should still beat out the 2 / 20 because the 2 won't be jack and you should get at least 20 from a prop firm if properly negotiated.

We're not against this at all -- we're currently talking to a prop shop that I met at SALT. We just don't have a particularly good network of prop shops -- we wouldn't really know where to start. But, yes, it's something that we're pursuing concurrently with seeking investors for the fund.
post #252 of 273
Quote:
Originally Posted by NameBack View Post

We're not against this at all -- we're currently talking to a prop shop that I met at SALT. We just don't have a particularly good network of prop shops -- we wouldn't really know where to start. But, yes, it's something that we're pursuing concurrently with seeking investors for the fund.

I agree with the previous posters on this point. The hardest thing for a new HF is getting seed money and then additional asset-gathering. Getting hit with the high up-front capital costs of setting up a fund makes it even harder. Getting some solid performance numbers under your belt at a prop shop, without having to make a significant capital investment in your infrastructure and counterparty relationships is a good idea. You can then spin out into your own fund, and it is likely the prop shop would happily seed you. Even a best-in-class new hedge fund, backed by one of the most respected global banks in the world, can struggle to raise assets from new investors.
post #253 of 273
Thread Starter 
Still searching for anchor investors, but we did raise about $60,000 for startup costs for the fund, which should cover everything and then some. The lawyers have started work on the documents, we're making our final decisions on administrators, accountants, and prime brokerage, and the fund will be ready to take investors' capital on August 1st.
post #254 of 273
That's very impressive. Mazel Tov.
post #255 of 273
Thread Starter 
Thanks morde! We're pretty excited.
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