straight out of college in 2024, me & friend vishudh tried to build a hedge fund—or at least that’s what we called it because the dream was a real fund & eventually our own HFT ops someday. big ambition, we just wanted to dive in to work on this & not knowing SEBI regulations :))

it was february or march 2024. we had zero knowledge of financial regulations, compliances, any of that. we just pooled our money, took trusted people’s money too, and started trading. theoretically that’s illegal, you can’t just take people’s money, trade it, and call it a fund without the structure & licenses. we called it a fund anyway because that’s what we wanted to build.

things were going good for a while. we were doing option selling, bidirectional stuff, hedging bets where it made sense. slow growth but we were profitable—averaging around ~26% return over six to seven months (not bad for two kids who learned most of this from the internet & each other).

we needed a push though. i got introduced to a venture builder—guy who runs his own venture studio now, built & sold companies before, investor from south delhi. intro came from someone i’d worked with on a small project earlier. we got on a call.

he was curious. two young guys straight off college with big ambitions. we weren’t even incorporated and he still sent us ten lakhs (~1M INR, not in USD lol) and basically said play with this, trade, show me what you’re doing. capital before paperwork—that’s rare & we were grateful.

later he invited us to delhi. we visited, talked properly. on paper he was exactly what we thought we needed: industry connections, understands SEBI, even has an AIF license, something which was the kind of thing we wanted eventually. he knew the game.

but there were issues. he was experienced for sure, but dominant in his ways. didn’t really give us room to learn & grow on our own terms. he mostly did option buying. profitable yes, but the style was… volume & scrape. what i mean by delta here is how many points you actually capture on a directional bet—a good tactical move might be 20-40, 50, even 70+ points. we were doing that when we traded our way even with his directional bet suggestions. he was often scraping 4-5 points with huge size, still green sometimes, but also P&L swinging into crores negative on risky days & ending with a few lakhs profit. profit is profit but imo that’s not good execution—it’s taking the whole move’s variance for crumbs of edge.

while we were there we felt our trades were more tactical & we were doing well on that axis. the bigger problem was we were still illegal. no incorporation, no fund structure, pooling capital from people who trusted us. if we’d been slightly bigger operationally SEBI might’ve noticed & we’d technically be in serious trouble (JAIL territory).

if you want a real fund you need category level compliances & some minimum AUM. i remember the bar for even a basic category being something like 15–20 crores, maybe 25. proprietary trading fund minimum was around 5 crores AUM as far as i remember & we didn’t have that. he was willing to fund but with a controlling stake.

that’s not the only reason we walked. we were tiny. we didn’t know if this path was correct. the investor did help us understand the compliance landscape & what “big finance” actually looks like. long term though it didn’t feel like the right partnership or maybe not the fairest deal, we didn’t see ourselves become the builders we wanted to be.

he also said something that’s stuck with me (i wrote about it in notes too):

“this is a proper big boys game and you’re not there yet”

BIG BOYS GAME (BBG) and he was not incorrect. we were still (technically) illegal so we shut it down and returned the capital.

i have a lesson & learning experience from all of this. we weren’t licensed, we were profitable enough to believe in ourselves & naive enough to skip the steps to just go build. the investor put money on two unknowns & taught us how expensive the regulated path is.

I’ll become the Big Boy soon enough to play this game because I ain’t going small. Go Big or Go Home. I went home for now, but I’ll be back.