Raising money for CTA --an idea

Discussion in 'Professional Trading' started by foo, Dec 27, 2006.

  1. foo


    I am just throwing this idea out there to get some feedback-----

    I am starting a CTA trading program shortly and, I just happened to see the Seinfeld episode where Kramer gets an intern for Kramerica last night and, it gave me an idea.

    I was thinking to get an intern to sell my program/fund and or network some money leads. Try to hire some young guy with some connections that wants to learn the business side of a fledgling CTA program.

    I believe the only test he would have to pass is the series 31.

    The way I picture it is that, I would show him the ropes nice and easy (forming a corp., futures and options, infrastructure compliance,etc.) and he can be selling it (the fund) at the same time while he is learning about the business. He would be compensated per account he brought in.

    I would imagine finding a well networked college kid that would be interested in this line of work would not be that hard.

    Feel free to shoot holes in it or throw out more ideas to build on.
  2. a well networked COLLEGE KID??? How many 20 year-olds do you find with great connections?

    I think you mean a college kid with a rich daddy..
  3. Why is someone who is networked better than you going to be your intern rather than you being his?

    It is not a bad idea but I think it might be hard to find someone who can actually deliver the accounts and will work for peanuts.

  4. foo


    I did not mean that the entire business depends on this kid but rather is it a good idea to bring in an intern at all? For my situation it is a matter of logistics---I would be able to cover more ground in an a different tightly knit city but, I was looking for a more generic discussion.

    The more people pounding the pavement the better, in my opinion.

    You are right optioncoach---that would not hurt.
    A college person with well connected parents but, I am an equal opportunity interner.

    I hope one day to have the money falling in the door but, that is not the reality for this new CTA so, what say you---interns--worth it or too much hassle.

    Just brainstorming here.
  5. Surdo


    Unless you sell it yourself, don't waste your time.
  6. Since I too will be running a CTA program in the new year, I've done some research on obtaining clients. What I've found is investors don't want to be sold anything. They like to "discover" talent on their own. They're interested first in a return of their investment, then a return on their investment, and finally they want assurance the ride won't be bumpy. A marketing approach I'm doing is to sell financial planners and futures brokers. These are trusted confidants that will give the investor the inside info. "feel" they're looking for. Also, I've made it a point to contact reporters for the WSJ, and NY Times and make myself available to be quoted on "hedge fund" articles. Hopefully being found in some articles will get investors to do a google search so they can "find" me. My broker has already assured me that I'll be busy as soon as I'm registered.
  7. What is the upper limit you plan to deal with?
  8. foo


    Good points ----what kind of arrangements do you have for compensation on the referrals from the brokers?
  9. I worked at a futures brokerage where we tried to work an IB(Introducing Broker) program to sell accounts for a fast-talking CTA from California.

    For a number of reasons it didn't turn out as planned, one of the main reasons was the large account minimum that he required. There were also questions about the validity of his performance numbers.

    We found it a lot more challenging to find accounts in that range in our area.

    A kid needs to really know what he is talking about to open large accounts IMHO.

    Do you think it could be done on a remote basis? Or would in-house be required?
  10. Maverick74


    Let me offer you some advice. This game is all about credibility. A 20 year old kid has no credibility. You think some rich guy is going to let a 20 year old college student talk him into investing in a CTA? Come on. You can't be serious.

    You need to find the opposite. Find a guy in their 40's or 50's who has been in the industry for 30 years who people trust and respect. Then you need to earn his trust and respect and then he can help sell you. Yes, it's going to cost you, and it should. You get what you pay for.

    If a 20 year old came up to pitch me for a fund, I'd hit him. Then I'd ask where you were located, and then I would hit you. LOL. Sorry man, I would have to do that on principle. :)
    #10     Dec 27, 2006