In partnership with
Was this email forwarded to you? Sign up here
YC is Backing Hedge Funds. Does this make sense?
If you leave a top-tier hedge fund and have a track record, do you need startup money? If you are raising money, you need money to invest/trade, and then you need some money for the tech and infrastructure and operations. Shouldn’t that raise be selling part of the GP?
Recently, we have seen a lot of startups raising VC money to start a hedge fund, or some are starting a prop trading firm. Most of these deals are investments in the technology, but not an ownership of the GP. The GP would be a way to get annual dividends alongside the fund manager. I have commonly seen new VC and investment managers sell parts of their GP to fund their build-out while they raise money from LPs.
If you are investing in the technology and not the GP of a new hedge fund, even if it’s an AI-enabled hedge fund, what’s the potential exit? How many hedge funds have we seen acquired over the years? I asked Claude, and in the last 20 years, it struggled to find any. It did find some management lift-outs and some GP acquisitions, but nothing about buying a hedge fund’s technology or a prop fund. Some notable deals below.
RIA acquisitions are common, and we have seen a bunch of VC rollups of RIAs, so maybe the hedge fund space will change.
I could write endlessly about why I think hedge funds raising VC money doesn’t make sense, but maybe I am too close to it to see the opportunity. Maybe my experience in the hedge fund space is clouding my judgement to see a big opportunity. I am going to go with my gut on this though and say I think this ends poorly. There is so much more to building a hedge fund than having a backtested strategy that uses AI models. The expertise needed in operations, execution, data (tons of data needs and costs), and then there is the most important part- capital raising. My last point is this: it’s hard to believe that the largest hedge funds in the world, from Two Sigma to Citadel to Jane Street, don’t already have the same models, strategies, and better technology and AI built in-house than these small VC-backed hedge funds.
How Jennifer Aniston’s LolaVie brand grew sales 40% with CTV ads
For its first CTV campaign, Jennifer Aniston’s DTC haircare brand LolaVie had a few non-negotiables. The campaign had to be simple. It had to demonstrate measurable impact. And it had to be full-funnel.
LolaVie used Roku Ads Manager to test and optimize creatives — reaching millions of potential customers at all stages of their purchase journeys. Roku Ads Manager helped the brand convey LolaVie’s playful voice while helping drive omnichannel sales across both ecommerce and retail touchpoints.
The campaign included an Action Ad overlay that let viewers shop directly from their TVs by clicking OK on their Roku remote. This guided them to the website to buy LolaVie products.
Discover how Roku Ads Manager helped LolaVie drive big sales and customer growth with self-serve TV ads.
The DTC beauty category is crowded. To break through, Jennifer Aniston’s brand LolaVie, worked with Roku Ads Manager to easily set up, test, and optimize CTV ad creatives. The campaign helped drive a big lift in sales and customer growth, helping LolaVie break through in the crowded beauty category.