Ask HN: Making a proposal to finance startup

https://news.ycombinator.com/item?id=8915239
by mxmpawn • 12 years ago
1 0 12 years ago

I was requested by a finance startup to find a group of stocks in order to get yearly(2006-2014) return and risk to a desired level(minimum return -5%, avg return 10%).

I have been reading about it and I think "Modern Portfolio Theory" is related to this and Convex Optimization is being used to find the best solution. The problem is I have no idea if this is a difficult task or there are a lot of already available open source solutions to the problem given.

And that's my problem, because it's a topic I know almost nothing, I can't tell the startup how much the solution is going to cost. I'm thinking about offering this options:

1- Monthly fee(3 months) and if by the end of the period I find an acceptable solution(defined before start) I get a cash bonus.

2- Only receive a payment if I find an acceptable solution(much more high amount than 1).

3- Some other interesting proposal.

What do you think?, how do you handle this type of cases where you don't have previous experience?.

Edit: I'd like to mention that I have other clients so I can live without charging to this one for a while and I can tolerate some amount of risk in this project.

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