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Most people won't endure sales
Selling means enduring rejection. A prospect snaps do not call me again, and the salesperson asks whether to call back in two weeks. You have to be willing to get out a big spoon and eat a lot, and most people aren't willing to do it. Measured against the structural risk and the hours worked, salespeople are among the most overcompensated people in the economy.
At the top of every industry the job is still sales. In investing, picking stocks or companies doesn't even begin until someone convinces an investor to hand over money. If you want to raise $500 million, you are selling your reputation and your performance. A hedge fund's two partners are usually an introvert who sees the matrix and really understands investing, and a high-EQ person who can convince Calpers to hand over $100 million, the chocolate and peanut butter of the business.
Why does rejection hurt so much?
In a 2003 study in Science, Naomi Eisenberger, Matthew Lieberman, and Kipling Williams scanned people's brains while they were left out of a virtual ball-tossing game. Being excluded activated the anterior cingulate cortex, a region also involved in the distress of physical pain. The researchers suggested that social pain borrows machinery that evolved to signal bodily harm. Later studies have debated how much the two overlap.
Why do hedge funds need someone who raises money?
Hedge funds have traditionally charged a management fee on the assets they run, often two percent, plus a share of profits, often twenty percent. Because the fee scales with assets, a fund that cannot raise capital has little revenue however good its picks are. Large investors such as pension funds commit money only after long due diligence on the manager's track record and team. That process makes the fundraiser's job a full-time effort in its own right.
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