The Best Advice My Dad Ever Gave Me (for Demo Day)

As someone who has started a business in the finance space trying to leverage technology, I take some offense to this. My business partners and I have worked our asses off over the last several years to get to where we are today: billions of dollars in assets powered by our investment models. Trust me: asking someone to give you money to put in your strategies is not easy. Unlike the start-up space, there is no "minimum viable product," "traction" metric, or even "asset" that has some intrinsic value (like a unique algorithm or brand). You either have a track record, or you don't. New strategies don't, so it's all "trust." Sure, I can show a "back-test" or "stress-test" -- but everyone knows those are bullshit anyway.

You think you know stress? Imagine knowing that every day, your models are making investment decisions for billions of dollars. Sure, it's a drop in the overall pool of assets in markets, but it is enough to keep you up at night, worried about someone's retirement or someone's college fund. Drop a few more percentage points than the market? Goodbye hundreds of millions of dollars. Yep, that's going to happen at 50 when you start your "easy life" as a hedge-fund manager.

I'm not saying my stress is greater. I'm just trying to make the point that every business has its own share of problems, and to say that being a tech entrepreneur takes any more balls than being any other kind of entrepreneur is naive.

Can we please stop, as a community, with the "woe is us, the tech entrepreneur?" It's embarrassing. Starting a business is starting a business, no matter the industry. In fact, I'd argue that we live in a golden age for tech entrepreneurship that has never existed in another industry. Imagine trying to start a bio-tech business or a manufacturing business (well, arguably "outsourcing" could be the manufacturing entrepreneur's "scale"...). There are no "seed" rounds. The assets you have to raise are probably 100x what a tech entrepreneur has to initially raise. On top of trying to build a product, you probably have to manage building and factory development, understand legal regulations for your industry, and manage tons of labor.

We live in a time where you can roll the dice and start a business in the tech space with a handful of smart people, some elbow-grease and maybe $50k in a seed round. This is a golden era.

I respect the hell out of what you are doing -- starting a business is NOT easy -- but please don't say it takes any more balls than starting a business in any other industry. It doesn't.

The author, rightly, makes the point that finance, like most things, is primarily about trust. But that's about the most interesting thing in the article.

Capital introductions are hard, and everyone wants to cosy up to someone looking for a 'home' for their excess millions. It's an environment where a couple of dudes/dudettes with laptops and an idea might have a potentially successful hedge-fund idea but lack the credibility and track record to make the risk worthwhile for a potential investor. The investor could lose a lot of money very quickly if your idea is wrong. The chances are, that if your idea is 'right' they'll listen to you explain it (because you really will need to explain it in depth) and then go and find someone who they do trust to implement it for them.

My point is that, it would be very hard for me to gain sufficient trust from prospective investors to raise $200m because I don't have any contacts or access to the necessary capital.

However, the daughter of a financial advisor for high-net worth individuals is playing a very different game to me. She very well might easily be able to do, what I easily can not. So, for me at least, there's nothing of interest in this article. I'm pleased for Elle to be in such a great position and wish her well.

I'm beginning to come to this realization myself - having balls is one of the most important factors of having success (no matter what success means to you, whether it's social, financial or something else).

If you don't have the balls to do the things necessary to archive the things you want, with all your energy and will behind it, you simply won't archive it.

Most people doesn't even try to do the things they fear, just a small minority does. Of the small minority just a few tries with everything they have, most of them unfortunately holds back because of their fear of failure. A fear of failure is preventing them from giving it everything they've got.

For me, this story was most interesting because it demonstrates the impact of social class in America, something that's rarely discussed. Try to picture the same story if the author's father was a millwright or a construction worker.

Not at all a criticism of the author - we absolutely should work with the advantages we're given!

This might sound uncouth but that's the dad I wish I'd had.

I really liked this article. More generally, I think deliberately choosing to do the "hard" things first (whatever that means to you as an individual) has served me well in life. I wish I did it more often.

At a former company, in a large group setting, I was asked to identify what I thought was the biggest roadblock to the company's success. I hesitated to comment because I knew my answer would be controversial. But, taking the bull by the horns, I answered, "Fear." I felt (still do) that when people are nervous about their careers or how they will be perceived, then they tend to censor themselves, sometimes without even realizing it. If the company took a deliberate approach to making the company a safe place (safe to disagree, safe to take risks, etc) then it would be a major benefit and help improve both morale and performance.

The CEO immediately disagreed. She didn't like the idea that any of her employees (200+) might be feeling some form of fear. Trying to address an issue like that is hard because it implies that high-ranking employees and "leadership" types were acting in a way that caused fear. It didn't even have to be deliberate or conscious. She would've had to do a lot of soul-searching, a lot of questioning the actions of her direct reports, many of whom were friends, and a lot of listening to frustrated employees.

I think it's pretty common to avoid hard things. So I try to tackle the hard things first. I think I learn more and it gets me out of my comfort zone. And the benefits are normally much greater too.

    creating a hedge fund, or any kind of fund, was something i should be thinking about in my 40s or 50s when I wanted a more traditional role in finance with a lower risk/reward profile.

Many of the more prolific hedge funds were started by people much earlier in life. David Einhorn, for example, started his fund at 28.

I hate to be that guy bitching without offering any constructive criticism, but this was painful to read. At least I had the courtesy to stick it through to the end to be sure before I posted this. We deserve better than this drivel at the top of HN.

Some people are extremely competent but are risk averse, so they don't take the risk that's necessary for success. Others are risk tolerant but are not very capable, so they are unlikely to succeed despite taking the risk. The trick is to be in both groups simultaneously. So if you know in your heart of hearts that you are competent, then it is worth taking the risk.

successful trader:analyst with clever idea::successful founder:wantrepreneur

Cool read and all but I work at a hedge fund that is currently raising capital... It's nice that our parents always overestimate us

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