Hello, I am starting an alternative investments investment firm and have been searching for clients online. I wanted to reach out to the community in case there are some tips from veterans when it comes to building your clientele.
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Comments (40)
If you are looking for clients online then the probability you succeed is asymptotic towards negative Infinity.
Watch out guys we got the next Bobby Axelrod here. He's starting his own investment firm (no clients yet, but is currently looking online) and the whole buyside industry should be shaking in their boots
Needlessly rude comment
Ok, I'll bite. At best, you're trolling, and at worst, you're an idiot. I'll give you the benefit of the doubt and say you're somewhere in the middle, which is ambitious but naive. You need credibility, and even with credibility, it's going to be tough. No one is going to give a 25-year-old barely out of college shit unless you've proven yourself to be a generational investing prodigy. If you're asking this question to random people online, you're not. You need to get a job, build some credibility for a decade or two, meet some people in finance that respect you, let some time go by so your college buddies can get rich and give you some money down the line, and then leverage those relationships.
Even with credibility, it's going to be hard af. Steve Schwarzman was a big swinging dick at Lehman Brothers, and he became an MD at 31 years old. He even saved Lehman at one time by quarterbacking a sale with American Express. When he left with Pete Peterson, he thought all his relationships would follow him to Blackstone from Lehman Brothers because he was the same person just without the Lehman Brothers name. It didn't happen, and he faced 450 rejections. That's after doing everything he did at Lehman Brothers. You have even less credibility than Steve.
Also listen to what Shkreli says in the following clip:
https://youtu.be/lwZ4XqN_4S8?t=473
Being successful in a large firm like Lehman Brothers or a big fund protects you from the risks of an entrepreneur, and many investors aren't going to have the confidence to back you when they don't know if you're capable of being successful on your own even if you have a great track record at a large firm.
With all that said, get a job, build a track record, build some relationships, get some credibility, and learn about the industry so you won't have to ask questions like this online. If you survive for a decade or two then maybe someone will give you some money to manage for them.
he's a real one🤍 - thank you for sharing 🤍
I appreciate your reply, but it does not take a genius to know how to make money, nor do you need to work for a firm for 10 years to have a chance in the industry. I take it you are in your 30's or 40's.
Do you think I am trying to raise millions? If so, you probably do not know that it does not take much money to build million-dollar businesses. At the end of the day, millions of dollars is not a lot.
Thank you for your input, but I am no idiot. Kindly keep your limiting beliefs to yourself to not discourage others who are confident within themselves.
P.S. It is 2023, and everything is done online. Good day.
Maybe not the best strategy to solicit advice and then push back as if you already have it all sorted. Would be interesting to know how you're handling all the non-investing aspects of this venture (e.g. regulatory compliance, fund/investment administration, reporting, etc.). These are all things that require some thought and planning prior to soliciting clients.
It's good you have confidence but it's unclear what it's rooted in. If you weren't interested in sarcastic responses (despite the one you've chosen to respond to being sincere) you could have elaborated a bit your post... I know being young is something I'll have to overcome but I've been in X seat for 3 years and have learned a good deal about the business. I've got all the infrastructure taken care of and have my value proposition set. The final piece is sourcing clients. My thought process is X, does this make sense or should I think about something different"
In any case, you should get comfortable with people challenging your ideas. Don't be defensive under the guise of confidence.
Well then it sounds like you don't need us. Google "how to find clients for my investment firm" or better yet ask chatgpt
If you have nothing to show in your history (track record) then you must turn the lens to the future. Build a game plan in detail and pitch that. Exactly what you plan to use the money for. If you dont have connections then you will have to use LinkedIn or Twitter or any networking site to cold email. You will need to send hundreds if not thousands of emails. Good luck. I hope the world is cruel to you early so you can fail early and succeed later. You'll find out who you really are.
If it doesn't take a genius to know how to make money, then why are you on here looking for clients? You are clearly smart enough to do all of this without any assistance from this (or any) community.
Listen man, I understand you are drinking the online get rich quick kool-aid, but unfortunately in the real world that is not how it works. Miracle1111's response is accurate. You aren't starting some business that provides a unique b2b service or coming up with some revolutionary idea. The investment business is a completely different world than just starting a regular business. You are in the business of managing peoples money, there is no room for error with investor money. The successful people in the investment world that are raising funds, are people that have done their time working on complex problems in business. People that have started successful businesses, worked in complex businesses, or advised complex businesses. If you have done none of those things, what do you know about business? If you manage to raise money to buy a business, how will you know what to do to make it better? To be a successful investor that raises funds, you have to be able to generate significant value and give a concrete reason why people should invest in your fund.
I do not think you have to work in the corporate world for half your life to be able to attain this edge, but you have to do something that will build credibility and experience. Some very successful people in this field are entrepreneurs who started a business or 2, grew them to be very successful, sold them, and figured out they could just buy under performing businesses in that industry and improve them.
You actually do need millions… if not hundreds of millions depending on your fund structure.
100m x 1% management fee (even that is high) = $1m before overhead, fixed costs, etc.
Math is hard, I know…
Isn't your advice a bit contradictory? You say (correctly) that working in a big firm means that you don't face the same challenges an entrepreneur would and hence people become skeptical of your future performance when you step into the entrepreneur world from the corporate world even if your corporate performance is good. But then you turn around and tell OP to get a job and work for a few decades and try to leverage connections and relationships and create a fund. You're telling him to go on a path that you showed in the first part of your response is very difficult to pull off successfully which makes no sense.
Array
I like your moxie, send me your wire instructions
Joe Hunt from the Billionaire Boys Club did it at 23/24 years old! Look up the A&E documentary on YouTube and you'll find out how he did it and what happened.
It's hilarious nobody is discussing infrastructure. You can't just go out and accept dollars, you'll need to be registered presumably as an RIA, you'll need compliance, you'll need outside audit, you'll need counsel. You're looking at tens and more likely hundreds of thousands in cost to get set up.
OP, it's great that you have big ambitions and goals, and I suspect that you posted on this forum to get perspective around your goals.
I'd advice that you consider the advice you've been given here as a form of "market feedback" , because WSO is predominantly used by people in the financial industry for the most part.
If you can't convince people here that you can handle Other People's Money, you may have to reconsider your strategy, because you are seeing first hand how "potential online clients" are responding to your offer.
The main questions you should ask at this point is "How can I build credibility, what regulations could possibly hinder me, what other specialised knowledge should I try to obtain in this period?".
Once you're able to answer those, I'm sure your question around how to find clients online would either be rethought or abandoned totally and replaced with an approach that may guarantee a higher success possibility.
The world is changed by dreamers, so you could be one.
The world has also crushed majority of dreamers, and you also could be one.
I wish you all the best.
FinTech!
If you're looking for investors online, you've already lost...
Listen to the good advice here.
If "it doesn't take a genius to know how to make money", well I guess LPs are just so below-average dumb that they cannot make money on their own. Another good reason why they should invest with you as a non-genius who knows a lot about making money. Makes sense!
First of all, someone's IQ is not what gives them the ability to make money, it's the knowledge. So, enough said about whoever typed this comment. Second of all, LPs can be busy with their main business looking for someone to help them diversify. Your comment just shows how closed-minded you are. Kick rocks. Your comment just comes from a place of envy or jealousy. You must be a troubled individual. I will pray for your poor soul.
I did not realize the knowledge part, which I'm sure you have a lot of as a 25 year old. My apologies.
I would put the whole thing together when you pitch your competitive advantages: "not a genius, don't have high IQ, but do have approximately three years worth of industry knowledge"(assuming you even have a bachelor's degree). Yeah, I was wrong, this might actually work!
Anything's possible. Being able to raise money and being able to run money are not necessarily the same thing, but your team really needs to be able to both at least reasonably well or it's going to be a problem. But no one would typically say they are starting an investment firm if they don't have seed money. In other words, if you don't have a client you aren't really starting an investment firm. You could maybe say that you are trying to raise money to start a firm.
FWIW, I own and run a such a company. In other words, I managed to do what you want to do. It's an insane experience and I cannot imagine doing it at 25 years old, but I don't think I would even want to knowing what I now understand. This is not something for the faint of heart. The road is littered with the corpses of those the blew up before you. You deal with very smart people every day who are nice to your face but will eat you alive if you turn around for second. And I have to deal with all kinds of weird very adult situations that I think would have traumatized me in my 20s.
If you want to do it, what you should do is find some folks who know how the industry works, and work with them for a few years. If you're any good, the moment will come.
You are absolutely right. Thank you for this valuable comment. I understand this is something for the think skinned. I believe I built real-world experience at a young age, and I learned how to deal with people. I also managed to learn the lesson at a very low cost to myself. I am confident with my strategic way of thinking that I can build this regardless of my young age. Now, that's not to say that I won't learn anything along the way, on the contrary, I will learn many lessons. At the end of the day, if someone hopes to learn everything before getting started, then they will end up never starting. Everything in life is an investment, and you can mitigate your risk with the proper strategy. Life is an investment portfolio in itself.
This guy spent too much time on Tiktok
I actually don't use TikTok, but from the sound of it, you probably use it since you know what the effects are from using such a garbage platform.
Bro TBH I don't know what you were expecting for responses, a list of guys with money and their emails?
If you can't take critical questions from strangers on the internet with a level head, how do you expect to handle the ones asked by people you're asking for money?
You said it yourself, you don't know what I was expecting with my post on this forum. Therefore you are assuming I was expecting a list of emails? Level-headed? A level-headed person does not assume. I think your comment is more directed at yourself than it is at me. My post is very clear and straightforward; tips on building clientele. Speak of being level-headed with yourself.
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