Idea two: Quant consigliere to lead quant bootstrapping

Pros/Cons: Solves the big early team, small later on, Solves the ex-post-facto problem. Strategy leaking depends whether the post-launch team is external or internal.

Quant bootstrapping:

Quant bootstrapping is the idea that you fund quant development cheaply and ALSO somehow delay paying for the most expensive labor costs until the strategy launches, so you can fund those costs from PnL.

The idea is then:

• Get the most expensive people/person to accept delayed payment out of PnL.

• Use internal people you already have to make up the rest of the team.

• Develop the strategy with only the most critical safeguards. Keep track of the safeguards you are skipping. Launch the strategy. Then using the PnL hire a team to go put those safeguards in later.

For that to work you need to 1. Use someone who will accept delayed funding. 2. Do it cheaply, but keep the few time-bombs to a minimum. 3. Defuse the bombs before they go off.

#1 Probably easier to do by hiring an external consultant with multiple streams of income. Also hire someone senior who has an income cushion.

#2 Get someone on the team with an extensive history of on-the-ground battlefield experience, who knows potential problems, the underlying causes and how to prevent them — especially hidden problems that manifest later.

#3 Explain the concept of time-bombs to leadership before agreeing to start. Don’t go ahead unless you feel completely sure that leadership is completely comfortable with the fact that all the early PnL will go to fund the consigliere and fund bomb disposal.