What types of business models exist for startups in this industry? What path gets you to 'Big Money' the fastest? We were recently advised to focus on R&D (our strength) and not on production systems (let others trade the money). Just looking for some ideas... Here are some possibilities: * Sell/lease trading systems to hedge funds * Trade through a prop firm * Raise and manage AUM directly * Sell to Fund of Funds * Hire management with track record and access to capital * Distribute fund through a broker or other channel such as Citi's Consulting Group Are there any others? What havenât we considered? Thank you for your ideas and input!
You can sell luxury goods and services to profitable traders. (You're selling supplies to the miners, not mining for gold yourself.)
A possibility... although I had an epiphany the other day on this subject. Why not pursue all of the above? Why not try them all and see which ones work - diversify
Diversification is cool except when it means you can't effectively compete in any of the areas. I would pick what you think is the best biz and make a go at it. Limit your losses if you fail so that you can try another biz after. Set milestones that will measure whether you are failing or succeeding. If you can only make one shot, you're better off putting the money away than betting the ranch on one biz.
Bloomberg did not make the BIG money through trading....well, he might have or might not, but its clear that he made money by selling those terminals to traders.
Yeah, I agree. My thought on this came after a discussion I had with someone who worked for a very successful executive (raised about $4.2 billion for their research facility). I was told that this executive was working on many different strategies at the same time because he didn't know which one would work (but wouldn't tell anyone he was doing this). When one did come through, he looked like a genius. So I'm probably going to have many different types of discussions with different types of people to see what comes through. However, my guess is that trying to convince someone to give me a billion to manage (directly) won't work so well
The biggest money in the industry is made through hedge funds of course. 1. Market Some sort of "hedge" fund. 2. Raise major cash. 3. Charge a crazy "performance" fee. 4. Make a big bet 5. Hope bet works out. 6. Collect sick money. 7. Try it again the following year. 8. Bet doesn't work out. 8 Retire with hundreds of millions.