Emerging MAnager Challenges

No site dedicated to helping emerging manager stockpickers would be complete without a little reality check about the challenges involved. Some managers are fortunate to become successful over time with patience and tenacity. But many bootstrapped firms go through very challenging years before they become successful, and some firms - many, even - never make it to sustainable scale. My goal on this site is to be encouraging of what is possible, but realistic. I don't want people to set out on this journey lightly. Raising capital from people you don't already know and have a pre-existing relationship with tends to be very hard, especially if you don't have a track record and/or investing career history. You should consider the challenges and gauge how committed you are to starting a fund, and how challenging it may be based on your own unique circumstances and the success others have had from a similar set of starting circumstances.

The best defense against this is to start with i) enough initial capital from friends and family and ii) a very low cost structure for your firm, so that you can avoid being reliant on raising capital in the early years. Of course, that is not possible for a lot of people who simply don't have enough personal/family/friends capital to get going.

NeckarValue blog post by Frederik

This was a very thoughtful piece written and shared on twitter by Frederik (twitter handle @neckarvalue). Frederik candidly addresses the challenges of being an emerging manager. In addition, he says, " I would like to offer some advice on two issues: understanding the allocator’s perspective and gaining clarity about what it is you are trying to build: a business or a practice. "

https://neckar.substack.com/p/attempting-the-impossible

Twitter post and thread by Dan McMurtrie, Tyro Partners

Dan is an emerging manager with a well-deserved following on Twitter, who is very open about the challenges of being an emerging manager. The following two Twitter threads help illuminate the difficulties. While I don't see eye to eye with Dan on every single point based on my own experience (which, notably, does not include starting an investment fund!), I would highly encourage anyone setting out to read them.

https://twitter.com/SuperMugatu/status/1376571643330445317

https://twitter.com/SuperMugatu/status/1383961145095049220

Interview with Dan McMurtrie

I thought this interview with Dan McMurtrie was excellent. Thank you to Value Hive podcast and Brandon Beylo for having him on. The emerging manager topic comes up just after the 2 hour mark and page 37 of the transcript (though I'd encourage you to start from the beginning as the whole interview is great), and it continues to expand upon the challenges and dynamics of being an emerging manager.

Transcript: https://macroops.substack.com/p/value-hive-transcripts-dan-mcmurtrie

Audio: https://open.spotify.com/embed-podcast/episode/3xRzgGnYZQFMQLLB0JmEmn

A site dedicated to helping emerging manager stockpickers

Emerging MAnager Challenges

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