I’ve written a bunch about Covestor and I have this widget on my right sidebar that shows how my public stock portfolio is doing (not well).

As is sometimes the case with things I post about on this blog, our firm Union Square Ventures has become an investor in Covestor. The financing was announced today and my partner Albert Wenger, who will be joining Covestor’s board, wrote about the reasons we invested in Covestor today on the Union Square Ventures blog.

There is a great discussion happening in the comments to my post yesterday on The Declining Power Of The Firm. Several commenters mentioned the effect that hedge funds have had on the financial markets. And they point out that contrary to the large financial services companies that have dominated the financial sector for years, the hedge funds are small nimble and are delivering better returns.

Covestor takes that idea one step further and suggests that individuals, trading for their own account, like bloggers writing in their pajamas, might be be the best option for investors looking to generate outperformance in the financial markets.

Of course, Covestor has to prove that hypothesis, and our bet is they will. Stay tuned.

#VC & Technology

Comments (Archived):

  1. bijan

    We are super excited about this one. Great to be working with USV on this one too.

  2. obscurelyfamous

    Congrats guys. Covestor sounds great from what I’ve read about it here.

  3. Ouriel

    congrats Fred. I agree this is an interesting space. We are present there too and have invested in which is not doing too bad either

  4. smartone2

    another interesting site is – basically stock pickers register and then offer their trading systems for subscription fee.collective2 shows the track record of the trading system and in addition users can rate the trading system

  5. timothysykes

    yes so glad u guys are aboard now!

  6. howardlindzon

    Here is CEO and founder Rikki on Wallstrip for those interested…Happy to be an investor on this one as well. Lot’s of possibilities.That looks cool. Never heard of it.

  7. Jacques

    Congrats guys; Covestor really sound like a great company with a great philosophy.The possibilities are huge in this area – have fun !

  8. qwang

    Sorry to say, I highly doubt Covestor will help people outperform the market anymore than any other investment strategy (besides becoming a full-time professional, and even then the odds are dim). The true value comes from the shortening of the value chain by stripping out expensive agents whose value-add can be mimicked via cheaper means. I think it’s more comparable to what Redfin is doing with home-buying.

  9. Trey


  10. William I

    Congrads, I’m sure your investment will pay off. Honestly, It seems as an mixture of the positives of mint and the ladders. Where the site is a web 2.0 (Gen Y) solution of learning and sharing on investment strategies, while being selectively open (allowing the company to refine its own product experience). The Follower technology (where they paid for followers) must be the primary contrast between themselves and the competition. They should target college students, particularly business schools. Professional might find the tool limited to what they currently use, and become passive users (which could be most harmful to a community oriented website).

  11. infoarbitrage

    Fred, I am a fan of (and investor in) Covestor, and think a lot of Rikki and Perry’s vision. Looking forward to seeing them ramp the platform and further the democratization and transparency of personal investment management.Roger

    1. fredwilson

      Wow. I had no idea roger. I am glad to know we are in another deal together!Fred