No you don't. But it permits you to communicate with retail investors. Many account managers have it.
No you don't. But it permits you to communicate with retail investors. Many account managers have it" Correct, you need a 7 do deal with OPM on the Equities end and a 22 to raise Capital for all kinds of Ventures, when your selling shares or taking a company public via an IPO. Some daytrading firms require the 7 due to the fact that the money is "Pooled" via a LP, LLC, etc, and everyone trades 'Everyone" elses Upfront capital so to speak.
If you're dealing with accredited investors you don't need a series 7. Yes, you do need one to solicit retail investors. Potential investors fill out a questionnaire and must be verified under SEC laws as an accredited investor, then more details about the fund can be disclosed. The SEC laws regarding fund raising for hedge funds/alternative investment pools require the solicitor to verify the accredited investor status. The difference between retail brokers and their ability to solicit for funds; the Series 7 allows brokers/traders to market their fund or services to anyone under the sun. Same applies for Direct Participation Programs and the Seires 22. Private equity firms and other alternative investment funds target accredited investors. You aren't going to find Edward Lampert or Steve Cohen under the Finra broker check.
Thanks ProfitTakgFool and all the others for your valuable insights into the HF business. Background: I've been trading futs part-time over a year and started off badly last year, making all the basic mistakes. So far this year has been profitable (up about 30%). I'm definitely not ready to quit my day job yet but may consider going part-time in order to learn more about trading. I had harboured thoughts of going into the HF industry and even doing an MBA first. (I come from a medical background) But since reading this thread, I think learning to trade my own account successfully, going the CTA route and hopefully starting my own fund seems to be the better choice. Hey, is there franchising in this business ? .... just asking
I am currently researching to start my own incubator fund like you did. I used to be a successful day trader for 5 years and want to take those skill sets to start my own fund with my own money. Mainly for 2 reasons. First, I want to get away from doing 100 trades a day and focus more on technical and analytical part of trading. Second, I want to preserve capital. I basically want to defer paying taxes until I withdraw money out of the fund. That can be let's say 10 years later when the returns have mutiplied pretax amount. I've spent some money buying these useless books that basically summarize what is needed but does not go into exactly how to do it other than hire a lawyer and accountant who knows what they are doing. They cost too much for me to absorb right now. My questions are: - How do I set up the firm so that the money I manage is tax-sheltered until the fund is withdrawen just like mutual fund? - Is there regulatory body that governs standards/restictions and requirements? - What was your minimum back office cost when you started your incubator fund? Anyone with info will be greatly appreciated.
Additionally, would it be possible to outsource almost everything, except trading the system, to some external service providers?