Fund For Capital Enhancements To: Fill & Download for Free

No matter whether you have a grandiose game-changing idea that flashes into your mind or a simple idea that would enhance customer experience, you definitely need money to bring it to life.Considering that financial problems are among the most common challenges startups face and because of which they sometimes fail, it’s absolutely necessary to figure out how to fund a startup in the best way possible.BootstrappingBootstrapping is one easiest, fastest, and most popular options to get a project rolling, because this financial model relies on your funding only, with no strings attached.Depending on the amount of money, you can hire your first employees, do marketing activities, find a mentor or consultant who can guide you through the business and give useful advice.The benefit of this way is that nobody can influence your startup, but the drawback is that you probably won’t have enough money to handle everything. Some founders get so enthusiastic about their project, that they can go bankrupt. The key is to stay reasonable and know your limits.CrowdfundingCrowdfunding is the process of raising funds through donations from people. Donations usually happen using platforms, like Kickstarter, WeFunder, Indiegogo.It works best for some product startups because it is easier to get people excited and actually want the product. However, it also works nicely for technology startups, if you manage to come up with special perks, like exclusive membership, or unique gifts.Angel investorAn Angel investor is an influential and wealthy person who can financially back up your startup or a small business in exchange for some equity. Collaboration with angel investors proved to be worthy for many startup founders. Not only should they be looked at as a source of funding, but also as someone who can provide you invaluable feedback on your startup idea and pitch.You can find angels on Twitter, LinkedIn, Seedrs, AngelList, Hockeystick, or just by googling “angel investor network in [your area]”.As someone who works at a company that deals with startups, I really would not recommend putting all eggs in one basket. Consider combining several relevant ways. You can find five other steps to take to raise funds for your startup in this guide.

Yes and no. Sometimes NFOs give you access to investment strategies and products that don’t exist elsewhere and cannot be compared to existing funds. For instance in early 2018, Edelweiss launched an NFO investing in IPO bound and newly listed companies. In the same year IIFL launched a fund protected by a unique hedging strategy called the Capital Enhancer Fund. These were close ended funds and could only be bought in NFOs.

Portable alpha strategies can be best explained through their cousin in portfolio engineering, the core-satellite portfolio structure. The core of this portfolio is invested in one asset class; subsidiary holdings are at the "periphery" and are designed to accomplish specific tasks for the purpose of enhancing overall returns, e.g. hedging or adding uncorrelated returns, i.e. alpha.Portable alpha strategies use leverage to graft, or port, excess returns (presumably alpha) onto core portfolio holdings (beta).This is done in three steps:levered beta acquisition, the gaining of the beta on a levered basis.freeing up cash for portable alpha, the finding of alpha.the porting of the alpha sans its beta onto the core beta.For example, S&P 500 futures could be purchased on margin with the remaining cash being used to buy portable European bank alpha, which would be a fund actively managing European bank holdings while hedging out market risk there - this would mean you'd only be taking the alpha therein without beta risks attached to the general European market situation. Note: there are many other implementations of portable alpha.Some key issues:The freed up cash isn't "free"; it has a financing cost usually in the vicinity of the three-month T-bill rate, depending on what type of leverage method is used.The "alpha" in portable alpha is really not necessarily alpha, just excess returns. True alpha is uncorrelated to the market; it is up to the purchaser to ensure the fund he is buying portable alpha from is truly selling him uncorrelated returns, created through a set of sophisticated hedges, as opposed to those made from just shorting out the market portion of the returns.Other implementation methods include levered beta acquisition via total return swaps or the repo markets.Joseph Benning has an excellent book, Trading Strategies for Capital Markets, in which Chapter 23 discusses this extensively.