I did something like this. I gambled on taking a substantial pay cut in return for a lot of equity. The equity ended up worthless, but I don't regret it and would probably take the risk again given the chance.
In terms of what to expect, probably a base that is 10-20% lower than at an established shop, and probably no guarantee.
Stage 0 Hedge Fund?
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Student
- Posts: 0
- Joined: Thu Jan 01, 2004 12:00 am
Stage 0 Hedge Fund?
I think that it is predominantly a three part equation. Personally, I jumped into a Stage 0 Hedge Fund about 2 years ago and have encountered a few setbacks that I hadn't planned on. I think it would be best to evaluate:
How long you (personally) can wait without monetary success?
How is the fund in term of marketability? (current AUM, Future AUM prospects, company stability, and are the numbers right for big ticket allocations) Time involved in marketing is one of those items that I think is always underestimated in Stage 0.
How is the fund in terms of infrastucture? (how good is the product, how risky is the strategy, how much money is the company willing to dedicate to making sure that you do the right things straight out of the gate ie. paying for good admin., custodian, lawyers, accountants ect.)
I am a 21 year old student graduating in May, so please take above suggestions with a grain of salt.
How long you (personally) can wait without monetary success?
How is the fund in term of marketability? (current AUM, Future AUM prospects, company stability, and are the numbers right for big ticket allocations) Time involved in marketing is one of those items that I think is always underestimated in Stage 0.
How is the fund in terms of infrastucture? (how good is the product, how risky is the strategy, how much money is the company willing to dedicate to making sure that you do the right things straight out of the gate ie. paying for good admin., custodian, lawyers, accountants ect.)
I am a 21 year old student graduating in May, so please take above suggestions with a grain of salt.
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orbital
- Posts: 0
- Joined: Thu Jan 01, 2004 12:00 am
Stage 0 Hedge Fund?
A re-revival:
I'm a grad student and know ~ nothing about phynance. One of my professor's has a good friend who's starting a fund. This good friend has expressed some interest in hiring me. I have three questions for the phorum:
1) For a fresh-out, is working at a young hedge fund a smart move? Personally, I feel as if now would be a good time to enter a risky venture, as I am at a place in my life where I can stomach risk.
2) What questions should I ask the founder? Honestly, i enjoyed meeting him, and he's clearly a smart guy. I get the sense that I could learn a lot from him.
3) Why do you think he'd hire someone fresh out of grad school who knows nothing about phynance? Does this behavior seem absurdly strange? Should I be worried?
thanks
I'm a grad student and know ~ nothing about phynance. One of my professor's has a good friend who's starting a fund. This good friend has expressed some interest in hiring me. I have three questions for the phorum:
1) For a fresh-out, is working at a young hedge fund a smart move? Personally, I feel as if now would be a good time to enter a risky venture, as I am at a place in my life where I can stomach risk.
2) What questions should I ask the founder? Honestly, i enjoyed meeting him, and he's clearly a smart guy. I get the sense that I could learn a lot from him.
3) Why do you think he'd hire someone fresh out of grad school who knows nothing about phynance? Does this behavior seem absurdly strange? Should I be worried?
thanks
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Student
- Posts: 0
- Joined: Thu Jan 01, 2004 12:00 am
Stage 0 Hedge Fund?
I started working for a stage 0 as a sophomore in college for the same reason as you, being so young I can stomach the risks and the rewards are tremendous. Having worked for an upstart here are some questions I would have asked in retrospect.
1. Learn as much about how the fund generates returns as possible. Are these ideas you think are sustainable and do they mathematically make sense?
2. Find out who their data provider is. Are they reputable? Is their information "clean"?
3. The major reason that many hedge funds fail is that they don't have sufficient marketing infrastructure to raise funds and in an industry where nothing comes cheap, being sure you have enough seed capital to work with and enough connections to bring in money without a 3-5 year real time track record is essential.
4. Find out who their administration service provider is (I gather based on this fund being stage 0 that they will be outsourcing as much as possible). Are they reputable?
Good luck! In the end its all about having a sustainable product that meets the needs in (terms of strategy, risk and reward) of your target investors and your ability to quickly get enough fee generating money to float and not sink.
1. Learn as much about how the fund generates returns as possible. Are these ideas you think are sustainable and do they mathematically make sense?
2. Find out who their data provider is. Are they reputable? Is their information "clean"?
3. The major reason that many hedge funds fail is that they don't have sufficient marketing infrastructure to raise funds and in an industry where nothing comes cheap, being sure you have enough seed capital to work with and enough connections to bring in money without a 3-5 year real time track record is essential.
4. Find out who their administration service provider is (I gather based on this fund being stage 0 that they will be outsourcing as much as possible). Are they reputable?
Good luck! In the end its all about having a sustainable product that meets the needs in (terms of strategy, risk and reward) of your target investors and your ability to quickly get enough fee generating money to float and not sink.
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Nonius
- Posts: 0
- Joined: Thu Jan 01, 2004 12:00 am
Stage 0 Hedge Fund?
I'd also reduce the risk of working for crooks. As hedge funds and their managers are lightly regulated, it's relatively easy to set up a fraudulent hedge fund. Check their backgrounds heavily.
Chiral is Tyler Durden