Ok so basically I'm graduating, and will hopefully have a job when I graduate in a month and a half at a boutique HF/PE shop. However, I want to start on the side a small firm that is basically a hedge fund, except I'm planning on starting with 10k and may have some other close friends/family that will throw in money as well and although I will do some trading, it will only account for probably 40% of revenue etc. Let's assume the firm I'm working for has no problems with me doing this...I don't want to publicize this or make it my main job, I just want something that I can 1) have on my resume and 2) can track my returns as a business. The other parts of revenue will come from lending (hard to explain, but generates about 8% a year), sports betting (looking at 30% return a year), as well as some fixed income. I basically want to create a hybrid fund, but have it registered as a legit business.
What are the legal steps that I must take to do this? Are there any SEC regulations that I have to abide by or anything? I won't be doing any marketing or trying to get new clients unless they approach me, and will only keep it to friends and family.
I also want the very least startup costs as possible.
Appreciate any help you guys can give.
Also I know the returns sound ridiculous, but just disregard that, and focus more on the legal steps I must take. I'm not looking to try and argue about the validity of my business plan, just how to make it legitimate. And I also understand that generating a % of returns off of small amounts of money isn't nearly the same as doing it with millions.
You are going to get crushed by fees on your trades with that little money trying to execute an active trading strategy... say you take $1k positions and pay ~$10/trade, you are giving up 2% on every buy and sell... how are you going to account for this?
Well I've been using an active trading strategy trading options using a broker for 3.95/trade. Like I said, the trading wouldn't be the main aspect. I'm not going to be taking on too many $1k positions on the trading front if my starting capital is 10k.
get a lawyer.
(there goes 20 percent of your capital)
i'd say the sports betting strategy is the most solid here
As I said before, I'm not worried about the strategy or anything, just purely what i need to do to register and such. And yeah, I'm not willing to pay a lawyer to file some forms that I'm sure I could do myself.
http://www.fwallstreet.com/article/170-how-to-start-your-own-hedge-fund/
I am also interested in this, but with 30k
Anybody have anything more than that guide? Interested in what state I would need to do this for legal reasons with sports betting (if it matters if I'm in Vegas or not) or if I can get in trouble betting online, since I'm pretty positive it is legal, as long as I'm not TAKING bets, but making them...Also best for taxes etc. I'm located in NYC currently, but also have a house in new england so either one is fine.
you're sure asking for a lot of legal advice to not hire a lawyer...if you're confident that you can just fill out the forms yourself, why dont you just head over to the library and check out some books?
I have a professor here that offers us free law consultations and such (he's a pretty damn good, and relatively well known lawyer) but I would prefer to go to him once I have some knowledge as I'm sure he wouldn't want to, nor have the time, to walk me through the process.
http://www.cnbc.com/id/36218041/Sports_Betting_Hedge_Fund_Becomes_Reali…
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