Securing Hedge Fund Seed Capital

Securing hedge fund seed capital can be a tiring and confusing process.  To help make the hedge fund seed capital process a little easier to navigate, I have recorded the following video with direct tips and strategies for securing hedge fund seed capital.  If you are an emerging manager or looking to start a hedge fund, this video will be very valuable to you.

Video Transcript/SummaryThe strategies and tips provided within this video module include:

  1. Have a deep and well-experienced team and advisory board.
  2. Have a real track record that proves your strategy works.
  3. Have a consistent investment process that you follow every day.  This will show investors that you can consistently provide positive returns.
  4. Have a massive focus on transparency and governance.
  5. Make sure you have your basic marketing materials in place and professionally developed.  

In my hedge fund career, I have helped hedge fund managers get seeded and I have helped an institutional investor to find hedge funds to seed.  I hope that this video helps you get seeded if you are trying to seed your hedge fund.  

Transcript for Securing Hedge Fund Seed Capital

Hello, this is Richard Wilson and welcome to this short video on tips for getting seed capital. I’ve been working with hedge managers for several years now. I helped trained over 500 in capital raising and hedge fund marketing. And during that time I’ve helped managers get seeded. I had also helped an institutional investor that I’ve partnered with, find more hedge fund managers to seed and often times managers come to me and ask, “How can I get seed capital?”

And it’s a complicated question but there are some quick bullet point tips and pieces of advice that I could give you. They’re going to increase your chances of getting seeded and I don’t think many people share this type of information so I just wanted to create a short 3-minute video to hopefully help you get seeded if you’re looking to start your own fund.

The first tip is to have a deep and balanced team. If you don’t yet, get one before you apply for seed capital. Otherwise, you’ll be known as maybe that one-man shop which some people will still see the one-man shop but you’re going to increase your chances by a having a deep and well-experienced team and a great advisory board as well. The next tip is to have a track record in place, even if it’s only a 4 to 5 months. You need to have a real track record. Yahoo, you know virtual stock portfolios only go so far with real investors.

Another tip is to have a consistent investment process that you follow every single day within your fund because you don’t want to be seem as someone who gets lucky or has kind of transient skill that comes and goes from weeks to months. They want to have a very consistent rigorous and robust risk management investment process, that’s really important. You should be able to explain it at the 5,000-foot level so people understand what you do. There’s a static that says that 78% of institutional investors won’t invest unless they know exactly what you do. And you can bet that when you’re a small manager looking to get seeded and people are worried about you going out of business or not doing well possibility and they’re putting a lot of money in you, they’re going to really want to understand exactly what you do. So make sure that’s really clear.

The last two tips. Have just massive focus on transparency and governance, be over transparent, have more governance than your competition and just work on meeting with people and getting training on exactly what that means and how you can put it in place. And the very last tip is make sure you have your basic marketing materials in place. Make sure you have a PowerPoint presentation and a one-pager at the very least so you’ll look professional when you sit down with somebody and then you’ve thought through all the steps of launching you fund, you have the right service providers and partners in place, and really just present yourself professionally with your best foot forward, so you don’t look like you’re an unprepared person who just came up with an idea a month or two ago.

I hope you enjoyed these tips. This is Richard Wilson coming to you from Monaco and we’ll see you again soon.

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