Starting an investment business

Discussion in 'Business, Careers & Education' started by NameBack, Oct 19, 2011.

  1. NameBack

    NameBack Senior member

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    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.
     


  2. Harold falcon

    Harold falcon Senior member

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    Good luck.

    P.S. Are you serious?
     


  3. NameBack

    NameBack Senior member

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    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.
     


  4. VelvetGreen

    VelvetGreen Senior member

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  5. NameBack

    NameBack Senior member

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    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. :slayer:
     


  6. Harold falcon

    Harold falcon Senior member

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    ?
     


  7. deadly7

    deadly7 Senior member

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    I think he's saying they simulated it with the market conditions from Jan 2010 until now and it gave them 200% ROI?
     


  8. bringusingoodale

    bringusingoodale Senior member

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    I believe in you.

    PM me when you are going public.
     


  9. Grenadier

    Grenadier Senior member

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    I believe in you.

    PM me when you get sued.
     


  10. Dakota rube

    Dakota rube Senior member

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    Isn't this the way Bernie Madoff got his start?
     


  11. otc

    otc Senior member

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    will you allow SFers in under the table in small amounts?
     


  12. Saturdays

    Saturdays Senior member

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    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)
     


  13. otc

    otc Senior member

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    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).
     
    Last edited: Oct 22, 2011


  14. volatility smile

    volatility smile Senior member

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    So... what data did you use to build the model? Surely not the same data you validated it against?
     


  15. stevent

    stevent Senior member

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    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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