InstaVest-Hedge Fund Killer

Note from the CEO:  Well hmmmmmm! Thought passive investing, robo algo’s, poor returns, artificial intelligence and fee compression would do hedge funds in, did you? Now a new front on that war; Instavest. Yes, social media and linking investors to other investors/traders has the makings of a brain share unlike no other. This is a GREAT read and extremely insightful.

AFTER 16 YEARS IN FINANCE, Saleem S. Khatri owned a closet full of suits. But as he packed for Silicon Valley and the most important meeting of his life, he settled on his lucky Superman T-shirt. The tech world was less buttoned-up than the banks he had worked for, and Khatri, who was pitching his startup to the legendary incubator Y Combinator, figured he’d need all the luck he could get.

Since its inception in 2005, Y Combinator has built a reputation as the world’s premier seed accelerator, the birthplace of industry-shaking companies like Dropbox and Airbnb. In 2014, 7,000 hopefuls applied to the company’s early-stage startup program; 3% were accepted. Khatri was one of 800 applicants who were invited to pitch in person at Y Combinator’s Mountain View, Calif., headquarters. Having recently decided to leave his job, he was relieved that Y Combinator was covering his flights.

Khatri took the last interview slot before lunch and found himself in a small, sunlit room across from three Y Combinator partners. The questions, he recalls, came hard and fast.

“What are you building and why?”

It’s a website, Khatri explained, where investors can post stock-trading ideas, accumulate followers social-media style and receive compensation directly from users who co-invest.

“Who wants this?”

Millions of amateur and professional stock traders, who lack a single platform to connect with their peers, Khatri said. And he was willing to bet that some of the best stock pickers reside far from Wall Street. He had typed up six pages of talking points and rehearsed until past 2 a.m. Still, he was nervous.

“Why now?”

Because, Khatri said, retail investors burned by the financial crisis remain wary of Wall Street institutions. And new technologies have accustomed consumers to sharing ideas online with their peers. It was time to leverage those trends in asset management.
Khatri says that just before the session ended, Qasar Younis, Y Combinator’s chief operating officer, turned to the partner beside him and whispered, “This has the potential to be huge.”

Later that evening, alone in his hotel room, Khatri received a phone call. Younis was on the line.


“Hey,” he said, skipping the introductions. “We’d like to fund you.”

Read Full Article at WSJ.com (may require subscription)