Attracting new capital

Discussion in 'Professional Trading' started by sealion33, May 31, 2011.

  1. I have a question to people who have outside investors.

    What kind of information do you usually need to provide to outside investors to make them interested you? Do they want to see audited results for 1, 3, 5 years? How much capital do you need to put in to make live results respectable? (For example nobody will care about your track record if you just trade with $10k).

    How much of your own capital do they want you to put in 10%, 20%, 50%?
  2. rmorse

    rmorse Sponsor

    As a general rule, if you're looking to raise millions, fund to funds, family offices and wealth investors are looking to invest in a strategy or a hedge fund that has audited statements. They want to see your worst day and your best day. They like to see your average monthly returns, but they are concerned about risk. So your draw downs are important. The longer the better, but a full year should be enough to spark interest. Then the next problem. No body wants to be the first million, unless they know you. Few want to be a large percentage of the fund. There is safely in numbers. If they are 5% of a $50mm fund, they feel others have done their due diligence too.

    Very difficult to raise "real money" starting with less than $250K. But I would think with less than that, it become harder still.

    Good luck....
  3. Thank you. This is what I am seeing right now too. It is time to find rich relatives. :cool: