Ted Seides > Quotes

“Offer Incentives to Get All-Important Early Wins For most start-ups, creating incentives for early investors is a sensible path. Whether through a seeder or founder’s shares, preferential terms can align the manager and early adopters to encourage growth. As the industry faces scrutiny on fees, the opportunity to offer something that clients are actively seeking is a win-win proposition. If a manager canvasses a wide range of potential investors, he will encounter both supporters and critics of seeding and discounted shares. Among the pools of capital invested in hedge funds, the fund of funds community tends to embrace founder’s shares more actively than others. In doing so, funds of funds have a place in the industry ecosystem by providing R&D for the industry. Except for the fortunate few whose brand allows a mega-launch, a start-up needs flag wavers in its corner to create positive signaling effects and branding. Both seeders and founder’s share investors can help.”
― Ted Seides, So You Want to Start a Hedge Fund: Lessons for Managers and Allocators