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Where to find seed investors
Posted: Fri Jan 11, 2019 3:13 am
by anonq
to add a little to prikolno.. payout structure is important but as he's saying more to it than that, how much of employee salaries are top or bottom line, what are the contractual draw down limits and gmv allocation... lots of trade offs
and thanks for the heads up on that, wasn't aware. I have a friend that has some employees invested that I was pretty sure weren't QP's and I guess that's how.
Where to find seed investors
Posted: Fri Jan 11, 2019 3:25 am
by Strange
> explicit 35/55 waterfall at 5 with a bunch of expense gotchas
Well, realistically, you can either manage a lot of capital or have high Sharpe, it's rare to get both in the same bucket shop. From what I've seen, a place the would let you run a fair amount of capital would have payouts that are fairly low (from 10 to 25 depending on the shop), some places would also give you a separate high Sharpe bucket that has a better payout. This said, my prior is that expected value in the medium term is still higher as a PM but I might be missing some important bits of the picture.
Where to find seed investors
Posted: Sat Jan 12, 2019 12:59 am
by prikolno
@anonq
Yes, and no problem, cheers.
@Strange
Yes, I see similar effects regarding size and capacity. To add to my earlier point, these are numbers at prop firms, given OP's background in MM. Obviously will be much lower if we're referring to a PM role at Fidelity. I would also more probably take the PM route if I had to start over in 2019, unless OP places a really strong premium on autonomy. Firms have become more operationally efficient these days.
Where to find seed investors
Posted: Sat Jan 12, 2019 5:06 pm
by gaj
> There's top tier prop firms that don't have a siloed structure, pay more base/guaranteed, foot more of the infra and development bills. Apply a discount on payout for these perks.
Curious about this kind of firms. Do they also have PMs? What's the payout structure like?
Where to find seed investors
Posted: Sat Jan 12, 2019 9:05 pm
by anonq
> Curious about this kind of firms. Do they also have PMs? What's the payout structure like?
pretty sure all of the following aren't siloed and don't have PM's in the traditional sense.. HRT, Quantlab, Rentech, Virtu
my understanding is that payout is typically discretionary with a higher base salary, I've known people who have made 8 figures at those places and others who got effectively screwed over.. so i guess as always very situation specific