Starting a fund / raising capital

Page 10.

Thanks, I'll read up.

 

So I guess I must be a Registered Investment Advisor for IB's friends and Family account. So some basic reading up on this says I need to pass the series 6 or 7, or hold some various designations, including CFA.

I am already at level 3 of the CFA but since I haven't studied at all for this year's exam, it looks like getting CFA will happen next year in August at the earliest.

Any other simple alternatives to managing money without being an RIA?

 

No exemptions apply to you, even though you're just starting out?

1) Trade off-shore money only.

2) Trade non-securities.. like futures!

In terms of what you're doing though, sounds like you'll have to jump through the regulatory stuff eventually. (And I believe you'll have to do state-based filings for every state your investors live in too... nightmare.)

 

I actually misread. It says you don't need to be a RIA unleses you are managing more than 15 accounts

 

Yes, but check your state laws as well. Here in TX, it is 5 or less, even if IB states 15 of less.

 

I wonder, is operating under a managed account structure just as useful for building a track record as operating under a fund structure?

In 5 years, can I present an audited track record saying I managed X about of dollars producing Y returns under various managed accounts? And this would be just as good as if I managed those same amount of dollars and produced the same amount of returns under a fund structure?

 

Not going to read through this whole journal but take your profits, spend the small amount to set up incubator fund, and let the numbers speak for themselves. If u r achieving these type of returns on an audited basis, investors will throw $$$ at u.

You can still trade your other $$$ in separate account.

 

Many have recommended IB's friends and family as the easiest way to start up and I am beginning to agree. However, what legal structure should my investment management company be operating under?

Sole proprietarship, LLC, LLP, etc? After some basic reading, sole proprietarship seems simpliest and I don't see what advantages the other structures confer..

 

LLC. Limited liability issue aside, you don't have to give out your personal social security number when people start having you fill out a W9.

 

So what statute is allowing the person trading the family and friends account to be paid via a performance fee since the investors are non accredited? How is this structured legally?