Follow the Money
Money and Friends
The camera opens on a young man leaning on a balcony overlooking Central Park. His brow is furrowed; from the side he resembles Matt Damon. The voiceover comes in, underscored by a cello: “My name is Tim Sykes, and I teach people to trade stocks. I am a self-made multimillionaire and I am the No. 1 ranked trader out of 60,000 on Covestor.”
If you were a discerning customer searching for stock advice, you might pause here. What the hell is Covestor?
The site, run out of London and New York, has been around since 2007, and allows “self-directed” investors to broadcast their trades online.
Covestor requires users—small-time, independent professionals as well as guys at home in their bathrobes watching E*TRADE on two monitors—to connect their online brokerage accounts or submit audited records. Every trade, bad or good, is posted online. In other words, it’s oversharing for traders.
A few years ago, Covestor pivoted to emphasize an even weirder business: mirror trading. In addition to merely watching Mr. Sykes make his millions from his Columbus Circle apartment, one can share the wealth by automatically mirroring his moves. Just as television made celebrities out of Jim Cramer and other prognosticators with good cadence, Covestor hopes to make stars out of any old schmucks who prove they can beat the Street.
Roboinvest, which lets ordinary folks follow each others’ trades in real-time, booted up at the end of January with a partnership with amateur trading clearinghouse E*TRADE. The startup has processed $2.5 million in trades and grown to 1,300 users since then, founder Michael Giles told Betabeat, with only some seed money and a full-time team of two.
The trick to Roboinvest is “one-click copy trading,” the feature that launched just over two weeks ago and got the attention of Bloomberg’s Businessweek. Broadcast your trades in real-time on Roboinvest, and your followers have 30 minutes to decide if they want to copy your move. “Most people know somebody who trades, and they always want to know what they’re doing,” he said. “It’s trading for the rest of us. Anybody with a trading account can use Roboinvest.”
The Start-Up Rundown
Want to trade stocks? Have no clue how? Roboinvest is the latest startup to launch out of New York for casual, insecure or curious traders. Like Union Square Ventures company Covester, Roboinvest is a social investing platform built on top of ETRADE that lets users “look over the shoulder of top investors” and follow their moves, sort of like AngelList does for startups and Currensee does for foreign exchange trading. The startup had a soft launch on Friday and opened officially yesterday.
The biggest start-up news of the last week was probably Google+ sucking up The Fridge, but New York start-ups are pushing features and hiring and having parties and moving to New York City:
WE’RE GOING TO NEW YORK CITY! Philly-and-New York-based mobile payments start-up Venmo will be setting up full-time shop in New York next week on the heels of announcing some new iPhone app features including the most commonly-requested passcode lock, which lets you lock the Venmo app with a four-digit PIN “in case your cat gets a hold of your iPhone.” You can also now scan a credit card by snapping a picture and check a box to check in on Foursquare when you split a bill.
INCREDIBLE JOURNEYS. New York start-up KeyWifi is trying to get people and businesses to share their wifi hot spots, bringing it up against security issues and legal challenges and other logistical hurdles. Betabeat spoke to founder Adam Black some months ago and we were not encouraged that the idea would ever get off the ground. But there’s been some movement: today the start-up announced three new hires. “KeyWifi is also feverishly growing, updating our technology and growing our customer base. To make this happen, our high-spirited, company founder, Adam Black, expanded the arsenal of KeyWifi talent with Product Director, Tom Hughes, Senior Technology Officer, Justin Fields and Community Development Manager, Jenn Lackey.”