raising funds

[promagma]

A prop firm is YOUR money on the line. Yes, can trade with 50k or 100k but the profit or loss is in your pocket.

Anyone who has 100k will probably be too smart to give it to you, and you are too "green" to understand why. So your "solutions" are

Find someone dumb
Or go the prop route

I got started at a prop firm with 5k of my own money and 100k buying power.

 

[Spearhead]

As an aside, after watching several episodes of "American Greed" on CNBC, I'm always bewildered by the large number of people willing to give money to scam artists without doing any due diligence simply based on their "charm" or "honest appearance". Anyway, I suspect that raising $100K would have as much to do with your personal charisma and sales ability as your trading record, if not more so.

What would it take for me to give $100K to the OP? I think it's really tough to answer as far as having a well-defined set of criteria, but to borrow a line from Steve Jobs, "I'll know it when I see it."

 

[Spearhead]

Quote from traderwann:

where to get the initial $100k?

I'm not particularly knowledgeable about this subject as I've never had to raise money myself. However, had a couple of thoughts anyway. If you're not interested in prop trading which some on the thread have suggested, you could try and open an account on covestor. I believe the minimum size for a portfolio manager account is $20K. You'd have a semi-official track record and could even attract some investors to follow you, although management fees there are real low. I don't know that you could use your performance numbers there in an official way, but I'm sure you'd make a better case for yourself at least to family and friends.

$100K is not a lot of money, so I agree with one of the previous posters who suggested hitting up family and friends first. Also, if I were a potential investor, I don't think I would be interested in being your seed money. I'd want to put $100K in where you already have $1Million of your own money on the line. Regardless of how successful I think your strategy is, I'd be worried about you taking crazy risks with my money.

Anyway, it would be pretty interesting to see how some successful hedge fund managers started out. I would think most of them worked in the industry beforehand and are starting out with a pretty healthy bankroll. On the opposite side of the spectrum, I would think needing $100K right from the start is not a recipe for success.

 

[heech]

You know, after having done this for a few years... the other question is, why does anyone ever *want* to raise $100k?

Let's assume you meet the right combination of rich/dumb, and bring in a check for $100k. If you do the math, assuming 2/20 and "reasonable" (somewhat sustainable) returns of 25% a year... you're going to make $7k a year off of that $100k you manage to raise. (And that's ignoring the audit/tax/admin expenses you will subsequently have to pay for.)

I mean... really? All that work and ass-kissing and hand-holding for an extra $5k a year? Unless you're raising $5 million at a time, IMO, it's all pretty pointless.

 

[Martinghoul]

Quote from traderwann:
What the h**k?! I said right in that post it is NOT a story. It is real. It actually happened. Ignored again! Is it a conspiracy if it is actually happening? lol

Well, you used the term "story", not I. I didn't realize from your description that it's something that actually happened. Moreover, even if it did, in fact, happen, it doesn't really mean anything, other than the existence of random dumb luck, i.e. a matter of a lottery ticket that I have alluded to a number of times.

Martin -- what do you need from a discretionary trader then? Let me guess, you need years of live results. Ok. How do I get that? Around and around we go. It seems like you ENJOY telling someone you wouldn't touch them instead of enjoying coming up with solutions. I prefer solutions. I try. No one else here does, they prefer to shut things down. No progress. Lost opportunity. Etc. It's quite sad. Perhaps the way I think may lead to the results I'm getting?

Dude, you have seen many different people give you a whole bunch of answers. Different "solutions" have been offered. None of them seem to be to your liking. Nobody is trying to shut you down, you have to stop thinking like this. What you're being told is a reflection of reality as people have experienced it. That you don't like it and find it too negative is neither here nor there.

 

[heech]

Quote from traderwann:

For exactly like I said, it's not an actual solution, it's out of frustration for being stuck. The point is to find a solution. I tried. I suggested something. I said that was ignored. Now you ignored my saying it was ignored. If what I suggest can't work, why? How to mold it? In what direction? What are the obstacles? Just saying, there's ALWAYS a solution, just a matter of finding it.

Some day, perhaps years from now, you'll be self-aware enough to laugh at your own posts in this thread.

What's your solution for my dream of dating Megan Fox? And no, I don't want a three year plan. I want a SOLUTION!

 

[Swan Noir]

I'm really not saying that or even anything even remotely similar. What I am saying is that there are a great many intangibles that go into a wise investment decision. The biggest of those bring the person who needs to make the proposition work. Those that have known you all your life are actually better equipped to evaluate you than anyone else. Your assumption that all you approach are operating with equal amounts of information is simply wrong -- dead wrong.

Thomas Edision who I am told holds more patents than any other American -- including a few very important ones -- might have seemed just another scatterbrained inventor to a stranger that was approached by him to invest yet might have had an uncle that realized he was in the presence of a genius.

Don't make the mistake of over valuing your method/system and under valuing yourself. And remember that I did not suggest you approach friends and family tomorrow. What I did suggest is you give it more time and only approach them if you really believe in what you have. That is a long way from suggesting that you go out there to hustle anyone ... a very long way.

Quote from traderwann:

Thank you for your post. Unfortunately what you are saying is that I must take advantage of my friends and family because anyone intelligent who knows what they are doing would never do it. Did you realize that? I'm not here to take advantage of anyone. If it is a solid offer to friends and family then it is even more solid to someone with experience, intellectual resources and greater capital resources.

 

[FrankSlaughtery]

Quote from heech:

You know, after having done this for a few years... the other question is, why does anyone ever *want* to raise $100k?

Let's assume you meet the right combination of rich/dumb, and bring in a check for $100k. If you do the math, assuming 2/20 and "reasonable" (somewhat sustainable) returns of 25% a year... you're going to make $7k a year off of that $100k you manage to raise. (And that's ignoring the audit/tax/admin expenses you will subsequently have to pay for.)

I mean... really? All that work and ass-kissing and hand-holding for an extra $5k a year? Unless you're raising $5 million at a time, IMO, it's all pretty pointless.

+1. anyone wanting to start their own hf should write this down 100x. unless you're able to raise a significant amount of money right off the bat you would be working for negative money for years meaning you'd be paying the fees heech talked about out of your own pocket. the only way to raise a lot of $ up front is to have a great pedigree/track record.

 

[newwurldmn]

I think everyone who is talking to you is smart and experienced.

But since those aren't the right answers for you, here's from someone who is relatively inexperienced in this field (but wants to be experienced eventually)...

1. Write a business plan
2. Get the legal structure set up. There are lots of rules around taking money from other people. Some of these rules are relaxed if you aren't taking compensation or if it is just family money.
3. Look for investors
a. Look around for companies that will seed new investors. You can find this through news articles and general web research.
b. Ask everyone who will listen for capital.
4. Pitch to them and see if they will back you.
5. Trade and manage your business.

With some web research you can attempt to do all five of these.

You will be starting a money management business. Not just trading anymore. But that is required unless it's just friends and family money.

 

[traderwann]

Quote from heech:
Let's assume you meet the right combination of rich/dumb, and bring in a check for $100k. If you do the math, assuming 2/20 and "reasonable" (somewhat sustainable) returns of 25% a year... you're going to make $7k a year off of that $100k you manage to raise. (And that's ignoring the audit/tax/admin expenses you will subsequently have to pay for.) I mean... really? All that work and ass-kissing and hand-holding for an extra $5k a year? Unless you're raising $5 million at a time, IMO, it's all pretty pointless.

I know exactly where you are coming from. I mentioned exactly that already.