How to Raise Capital?

Quote from FXTRADER40:

Regarding the auditable track record, I would be interested to know what this means exactly. I have looked a little bit at the admin side (e.g. accounting systems), but this takes huge time as well. I have no live experience. If I set this up on a smaller scale, most of the costs/time will be identical to if I did it with a lot more of OPM (e.g. computer systems, office space, accountant, etc). Example: test this out on my own with 100K and make 50K (50%). After expenses, I have nothing left over. Hence my goal to get more working capital. Example: test it out with $1M, and make only 200K (20%) = better!!! Then grow it really large!
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So you programmed your system in 6 months.

And you have no "live" trading experience.

But you want other people's money to trade? Uh, okay....


Also, I found this extremely puzzling....

"Example: test this out on my own with 100K and make 50K (50%). After expenses, I have nothing left over."

WTF are you talking about?

If you trade 100k of your own money and make 50k, what expenses are we talking about?

You already have the system. Just buy a new, dedicated computer at home and remotely access it while at work or buy a laptop to run your system while you are working.

Since it's quasi-automated, you shouldn't need to babysit the system all the time.

Just trading with your 500k, if you can make even 20%, that's extra 100k for your family...in addition to whatever you are making at your current job....

Do that for at least a couple of years and keep growing your 500k to whatever.

Build a track record first before even thinking about asking others' money.

People are not going to give you money based on your "untested" 6-month old trading system.
 
It's all self marketing. You gotta whore yourself with marketers, buy suits, work on public speaking, get polished, and someone will be dumb enough to throw a few mill your way.

Quote from FXTRADER40:

I have developed a quasi-automated no-touch system that gives me roughly a 50% return per year. Meaningful drawdowns are infrequent, and always hedged. The system is fully backtested over a 5 year period. I have about $500K of my own money which is actually enough capital start trading. My problem is the other costs associated with setting up the system and business. I figure that it will take about $200K per year to run the business. This means I quit my current job (software engineer) and dedicate all of my time to starting up the business. I pay myself a $100K salary per year, and the other $100K goes to operating costs like office space, computer systems, legal, accounting, and most important of all.....marketing and sales!! This is my biggest problem. I do not want to sweat it out for 5 years in some crummy office in some crummy town. So the main question would be how does one attract investors to such a business? Initially, I just really need normal business loans to pay for the operating costs. Of course the next or concurrent steps are convincing other people let me manage their money. At the moment I have no network to draw on, as I am in the software engineering business, not in money management or trading comercially. Most of the private equity news letters seem to focus on businesses that make a physical product or provide a service. As far as starting a hedge fund, this appears even more daunting, as the capital requirements are usually above $5M. Any advice on how to get this seed capital for operating costs and a feasible strategy for getting people to let me manage their money?
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If this system is as you say. use your 500k to run for a year. have an acct audit it and if is as you say you should have no problem sellilng a system that make 50% ayear. Just do not break the rules of offering this
find a lawyer who has done this before.
 
Quote from FXTRADER40:

I have developed a quasi-automated no-touch system that gives me roughly a 50% return per year. Meaningful drawdowns are infrequent, and always hedged. The system is fully backtested over a 5 year period. I have about $500K of my own money which is actually enough capital start trading. My problem is the other costs associated with setting up the system and business. I figure that it will take about $200K per year to run the business. This means I quit my current job (software engineer) and dedicate all of my time to starting up the business. I pay myself a $100K salary per year, and the other $100K goes to operating costs like office space, computer systems, legal, accounting, and most important of all.....marketing and sales!! This is my biggest problem. I do not want to sweat it out for 5 years in some crummy office in some crummy town. So the main question would be how does one attract investors to such a business? Initially, I just really need normal business loans to pay for the operating costs. Of course the next or concurrent steps are convincing other people let me manage their money. At the moment I have no network to draw on, as I am in the software engineering business, not in money management or trading comercially. Most of the private equity news letters seem to focus on businesses that make a physical product or provide a service. As far as starting a hedge fund, this appears even more daunting, as the capital requirements are usually above $5M. Any advice on how to get this seed capital for operating costs and a feasible strategy for getting people to let me manage their money?
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something doesn't seem right here..
ok so 100k for bills, why do you need office space/marketing if its returning 50% consistently.

Yr 1 400k*1.5 - taxes =530000
Yr 2 430k*1.5 - taxes = 570000
etc etc.
 
Quote from FXTRADER40:

I have developed a quasi-automated no-touch system that gives me roughly a 50% return per year. ?

This sounds like a gadget in one of Dr. Seuss' books...
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Quote from Tracy McGreedy:

It's all self marketing. You gotta whore yourself with marketers, buy suits, work on public speaking, get polished, and someone will be dumb enough to throw a few mill your way.
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Dear Tracy,

Thank you for your reply. I think you understand what my issues really are. So the question is:

--what marketers....how do I get on their radar screen?
--public speaking....to what audience?
--based on the lousy average returns of most money managers with verifiable track records, who appear to be getting money thrown at them regardless of lousy performance, where is this dumb money.....it clearly has to exist somewhere....
 
how is it "quasi-automated" and "no touch"

anyhow, a hedge fund cannot market itself or advertise. You can have one offering but you cannot consistently sell to others.
 
Quote from FXTRADER40:


.......
A good analogy would be how a professional pilot trains in simulators, and then flys for real. If you know he avaiation industry, you know that simulators have come a long way, and now comprise a large portion of pilot training.
.........
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Yes, for procedures only.
But experience is still a "must".
If you know the aviation industry, you know that airlines want "real time" in your logbook.
Otherwise, every guy who's good at videogames can be an excellent pilot.
Same applies for trading.
 
Quote from 9999:

Yes, for procedures only.
But experience is still a "must".
If you know the aviation industry, you know that airlines want "real time" in your logbook.
Otherwise, every guy who's good at videogames can be an excellent pilot.
Same applies for trading.
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It's called "battle tested", and until the O.P. gets real, this thread is but another to be thrown alongside all the "I'm 20 and how do I get started in trading" threads.

Clearly this guy is just another programmer with a self-percieved "edge".

Good Luck!
 
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