It doesn't makes sense financially to start a fund. Here's how we did it.

For a normal finance professional, starting a fund is an enormous task.

The startup cost for a complex fund can easily rack up to $300K+ USD including legal, tax structuring advice.

FYI - Getting the best advice is worth every penny in a complex legal and tax environment.

Once you solve all the legal and tax hurdles, you also need to figure out a way to find investors.

With SEC's June 2026 update, only investors with $2.7 million in net asset can invest in a hedge fund with performance fees.

If a private fund chooses to not charge any performance fees, it would end up compete against regular indexes with a race to the bottom for fixed management fees.

See here on how we balance low management fees and performance fees which turns a cost into an incentive: https://branchpointfunds.com/

I still remember my mentor (who is one of the top ranking mutual funds in his category in Canada with over $1B in asset under management) told me...

When he first started his fund, he was under a lot of stress.

Mostly coming from balancing between finding investors, getting performance and compliance all at the same time.

He did have one of the richest families in Canada as his backer - but still.

For my fund, it is a bit different.

All of the employees (CEO, CCO, CFO and myself as the president) have stable income and significant assets outside of the venture.

Our CEO is multi-millionaire with startup investing and other investing income

Our CFO is millionaire with stable income

Our CCO has multiple other entrepreneurial income streams

This makes the fund launch a lot easier because we focus on getting this right.

We focus on building the right medium to long term organizational structure for success.

This is why I am very impressed by my mentor where he had to cold turkey the fund launch process 30+ years ago.

For my fund launch, I focus on the long term success of the fund and how we continue to evolve with the market over the next 10-20 years.

My goal is to ensure the machine learning model continues to be resilient for many years to come.

(You can learn about the investing process here if you quality with net asset of $2.7 million USD excluding home: https://branchpointfunds.com/)

Cheers,

Eric

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Eric Seto

Chartered Professional Accountant (CPA)

Chartered Investment Manager (CIM)

Founder of 5MinInvesting.com

Whether or you are retiring with $50K, $100K, $300K or more, it is important to figure out the right strategy for you.

For people with lots of capital, they can afford to throw it all into CDs / GICs and earn a low 2-3% return.

However, if you are looking to generate cashflow with a few hundred thousand, then you would need to look deeper

You need to find a more capital efficient strategy and still achieve your target monthly cashflow (for retirement or simply working less)

In Investing Accelerator, you will learn two strategies:

First, we focus on buying options to buy discounted stocks to multiply our profits for long term gains

(Here's the sample module of Investing Accelerator - Free Chart Course: https://5mininvesting.com/free-chart-course)

Second, we focus on selling options to generate interest premium which serves as a more predictable stream of cashflow

We use these strategies on blue chip companies like Apple, Microsoft, Visa, Mastercard etc

We place 1 trade a week for monthly passive income to smooth out our cashflow

This allows us to split the portfolio into 2 parts

Low risk low return with index funds or bonds
Higher return higher risk cashflow generating option strategy

If you are interested, you can schedule a call and ask any questions you have: https://bit.ly/48mJlgR

Disclaimer: This communication is provided for educational and informational purposes only and does not constitute investment advice, a recommendation, or an offer to invest in any fund or strategy. No advisory relationship is formed by receipt of this content. Any references to strategies or markets are general in nature and do not reflect the performance of any client account or investment product.

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It doesn't makes sense financially to start a fund. Here's how we did it.