Seed capital providers for HF launch?
I’m an analyst at a well regarded L/S HF. I am close to a PM who has his own track working at another respectable SM L/S HF. We have a pretty similar investing style, have known each other for a long time and there is mutual alignment. We are both in our late 30’s. The two of us want to partner together and launch (he will be the CIO, and I would be a Co founder). We’ve put together the material (presentation, track,, initiating portfolio) that we would need but don’t really know where to start. Like we happen to know a handful of seeders, who we will speak with but there are a lot of other seeders we’d like to get in touch with, but have no connect with. We’ve interacted with lps at our funds, but we can’t obviously talk to them because of non competes. We were thinking of approaching the cap intro teams at the prime brokers that we work with, but that leaves us at the risk of the word spreading, and we would not want that because both of us are in great seats, and worst case this doesn’t work out, we can continue to work at our current places (gotta support the family so can’t just quit) till the time we find an LP, and we aren’t in a hurry. Now we could reach out to seeders we don’t personally know via , but not sure if thats the best approach? Any advice here? Like if I reach out to BAAM without a reference, they’d probably not respond? Both of us have a strong pedigree - ivy education (which obviously matters less these days) and working at very well regarded shops (like objectively well regarded shops from which multiple people have spun out) and we also have my friend’s track record. How do people start engaging with external investors when they are still employed elsewhere. Also, is there a list of seed capital providers that someone can share? Like we happen to know a few but I’m sure there are a lot more. We know a placement agent willing to help us but the terms quoted sound quite ridiculous, like they want a revenue share on a retainer. If we are going to take seed capital, which would anyway take up a revenue share, why would I engage a placement agent who also wants a revenue share to introduce me to seeders/ other lps. We can get in touch with a lot of people through our existing network, but we can’t approach them at this stage, or at least until we have visibility over the first 50mil, because that’s again quite risky. Like even at 50mil, we’d struggle to despite massive cut in comp but at least once we have some visibility into the first cheque, we can go all out with our network including seeking our employers support, because we will be certain of quitting. Bit of a chicken and egg situation. Purposely keeping our backgrounds a bit vague because it’s a small world :)