great thread.
its a nice idea to want to start your own firm. in technology startup land that is arguably easier than it has ever been.
in asset management, it is harder than it's ever been.
in the vast majority of cases it makes more sense to grow in an existing firm...
its a nice idea to want to start your own firm. in technology startup land that is arguably easier than it has ever been.
in asset management, it is harder than it's ever been.
in the vast majority of cases it makes more sense to grow in an existing firm...
https://twitter.com/NeckarValue/status/1379873670567460865
Every small fund business has to replicate an institutional operations and compliance infrastructure, regulatory registrations, market data, technology, cybersecurity, investor relations, bookkeeping, billing, ... its expensive, hard work, and risky if you screw up
Institutional investors generally have very little interest in business+operational risk, as opposed to market risk. It typically takes at least 3-4 years of operation at scale before large institutional investors will seriously consider what you have to offer as a firm.
On the other hand, firms like Millennium will fund your whole cost base and run all those ancillary services for you while paying you quite well on your upside. In most cases that's going to make more sense as a goal.
And long run it is much easier to spin out of a larger place with their backing and the backing of large institutional investors who know you from there, than it is to bootstrap a tiny new thing from nothing.
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