Starting a private equity firm comes down to one person's track record and credibility, which is bad news for anyone hoping money alone is enough.

• A new firm needs a standout investor with a proven record who can convince big money to back them.
• That person has to build a team around them with skills they lack themselves.
• Relationships with the firms that hand out the money matter as much as the investing itself.
• Buying companies and dressing up the balance sheet is not a business — the firm has to actually make the companies better.
• Most people who try to launch one never clear that bar.

Outlook: Raising a first fund stays hard, and firms without a real edge will keep struggling to attract backers.