Selling HF LLC with accounts
Hi, I want to valuate my business to sell my LLC based in Delaware, I started it to act as an investment manager for a hedge fund. It is taxed as a C-Corp. And was formed in March 2017. It has a brokerage account with TD Ameritrade with full margin and options privilege. It also has some domains it dosen't have any revenues, just my personal trades. It also has accounts with FINRA and NFA and a catchy name, great virtual office with manhattan address and phone number. Also has some accounts on investor network platforms. So there is that.
Also if I were to have an equity partner to take the firm forward what would be the valuation, especially when I will be working on it too, and I have a pretty decent knowledge and connection in the HF world. I really want suggestions, help maybe?
Thanks
your LLC is worth zero. Its actually worth less than zero because you must pay registration fees to the state every year.
I mean it's true that $300 has to be payed to the state and $50 to the registered agent. But I have accounts with FINRA and NFA. Also it has full trading authorization with TD. Also it has been aged for more than a year, also has a catchy name and great virtual office with manhattan address and phone number. Also has some accounts on investor network platforms. So there is that.
Also if I were to have an equity partner to take the firm forward what would be the valuation, especially when I will be working on it too, and I have a pretty decent knowledge and connection in the HF world.
Its worth zero. Sorry dude.
Thanks for your input, man. Appreciate it.
when starting a fund, the order of operations is
1) have an investing strategy 2) create a track record of executing that strategy 3) convince investors to invest in you and your strategy 4) create the legal entities so that you can accept investor funds.
seems like you skipped to step 4, and forgot about steps 1-3
Yes, That is correct. The LLC that I created was originally intended for personal trading then the HF idea came along and I was working towards it but my financial situation got not so good. I have come up with a great backtested strategy in the futures market. But as I didn't have the margin for trading even a single contract in live market, I couldn't build a track record, to market my fund to investors. I am looking at two situations- 1. Selling the LLC and using the proceeds for building a live trading track record in personal account for the strategy. OR 2. Getting an equity investor in the LLC to keep the LLC alfloat and build the track record in the LLC itself. Thanks
Get a job, and save your money until you have enough capital to trade. There is really no other way to go about it. I know a guy who drove for Uber to make enough $$ to trade. Only took him about 2 months.
or code your strategy on a site like quantopian....its free
I really doubt if quantopian would be able to keep my code confidential, also it didn’t have futures data when I used it.
You should know that a backtest has no real value. A backtest trades on the same dataset that was used for specification of the trading strategy. It's like me saying "I can solve the Riemann Conjecture... assuming someone gives me an outline of the proof." So before you even stick to your strategy, do some real forward tests. That's the only way you can find out whether or not your strategy works. I could easily construct a program that perfectly predicts all in-sample data points. The problem arises when predicting out-of-sample values.
Out of sample data tests could not be conducted by me due to the linited availabilty of data set and platform, but it has smooth equity curve and limited drawdown with nice Profit factor in the last 18 months. Also it has a built clause for accounting for 1 tick slippage and $8 a contract commission on both sides of the trade. The thing is that I don't have the margin to forward test the strategy.
But all of this is meaningless in a backtest.
Thanks for your input. Appreciate it.
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