And trading platform application Robinhood: zero commission, difficulty of zero

Robinhood zero commission stock trading service has not yet officially launched, it has attracted 500000 enrollment, now the company has completed the $13 million in financing, to, recruiting, to ensure the stock trading application 100% safe, let more people to join the test.

hundred finance (E * Trade) and Scottrade (Scottrade) companies such as each deal to the user charge $7 to 10. And these rivals, Robinhood don’t need to spend a penny on maintaining entities run, also do not need to rent expensive storefront on Wall Street. Robinhood for this by Index Ventures led A greater expectation is round, can promote the user for Robinhood long-term operation of confidence. He hopes to zero commission stock trading service in 2015 officially launched, people can easily be performed without trouble back at home savings and stock trading.

co-founder Willard? Neave (Vlad Tenev) has published views (neave and another company founder base? Bart (Baiju Bhatt) from reading age is good friend.) : “we are committed to let young people can be free to make stock investment, most stock brokerage firms have at least 30 years old. Their complex interface, facing also are larger professional or some ages are active traders. They did not take into account the first time in the field of the couple’s needs, and this is what we are after. We provide convenience for the young people, become more friendly interface for stock investment.”

neave and bart in financial business, in the field of science and technology is not a two times, they started too many consecutive home engaged in algorithmic trading and investment banking software development company. During work on Wall Street in 2011, they found that the stock investments are almost new, then designed a simple and friendly software, let all people can easily to participate in the stock investment. Butt said: “everything will back to the company’s name,” he revealed the true feelings, in the words of “we ask ourselves: ‘ ‘if we use a technique called Robinhood financial services, we hope to what it can do. ‘”

in April 2013, Robinhood finally out of the “stealth” mode, neave and butt trying to determine whether the company can through the software and mobile applications to replace the expensive real office and marketing costs, thus free stock trading commissions.

this quickly released a younger, but not rich user group, this group was left out in the stock trading right from the start, because every $10 trading commissions were accounted for a large proportion of the investment amount. If you hand a large sum of money to invest in, this is not a problem, but if you only so a few hundred dollars can be used to invest in his pocket, then $10 in advance to return even harder. Robinhood relief commission, makes the measurement of the user participation Robinhood private, accounts for the proportion of young people under the age of 30 to 80%.

Robinhood phase measurement at present is still in the private, the founder of the participants are relatives and friends, but the software allows people to free trade, the study looked at stock, greatly improve user engagement, to lead a considerable: completed a deal on Robinhood users, 50% every day come back to buy and sell stocks, 90% is come back once a week.

in December 2013, Robinhood completed a $3 million round of funding, the seeds of the investor is the Index Ventures and Anderson – Horowitz (Andreessen Horowitz). Robinhood, after the completion of A round of funding totaled $16 million. Investors most renowned, including Ribbit Capital, social data services company StockTwits Howard? Lin Dezan (Howard Lindzon), damien duff, founder of the Path? Morin (Dave Morin) companies missile Ventures, Box, founder and CEO Aaron? Levy (Aaron Levie), American rapper snow? Doug (Snoop Dogg), American actor jared? Jl (Jared dojdlivoe-leto wonders) and vc Queensbridge Venture Partners, a partner, (Nasir Jones). Bart told me: “as a company, Robinhood well-funded, we have a world-class vc investment, they are Robinhood strong backing, it is very important.” In this way, the user will Robinhood seems to generate a sense of trust. He said: “some financial institutions to choose some name, make people associate to Wall Street some landmark buildings, so as to enhance the credibility in people heart. But this naming approach is now no longer can arouse people’s resonance.”

Index Ventures partner, Jane? Hammer (Jan Hammer) will join the Robinhood board. Bart explains, Robinhood is to give the Index Ventures, a board seat, because it often invest as online consulting management platform WealthFront SigFig these financial and financial planning platform startup. Bart said: “the Index Ventures, like we are controllable and slightly famous financial companies is preferred investment, they promised to help us.” Hammer said, Index Ventures out Robinhood because “this product is the founder of their generation and development, is a smart, flexible and easy to use mobile applications, overturned thoroughly trading experience.” Hammer also said that the Index Ventures, notice that the quality of the founders of Robinhood, thus he believes that the 20 employees of the company, the sky’s the limit, and additional investments.

so where the $13 million of new funding will be used? Bart explained: “we are a technology company, so we will be hiring in Facebook, Google, and companies such as Palantir at MIT and Stanford university’s top engineers and designers, enrich our team.” Robinhood goal is to become a 100% safe and reliable service, so as to expand public beta range, prepare for the final release. Bart stressed: “we don’t allow any error exists.” If a user transaction security cannot be guaranteed, attacked or system, the user will be to question the reliability of Robinhood, once the seeds of doubt, would be devastating damage to the company. At present, some application of Robinhood service users have been waiting for 18 months, so, Robinhood want to do is try my best to let customer satisfaction, at the same time let them in the process of waiting, for the company.

if we can strict management, even free to users, Robinhood can still be made. Robinhood business model is based on the API application startup fee. In addition, the user can be in the form of margin trading, when their own funds are selling in the frozen state, they can borrow money through Robinhood continue to trade, and welcome Robinhood, so that it can earn a commission from the stock exchange. If Robinhood really can let the user can use the money, also can gain interest income from assets held by the company.

Robinhood the key to success, is to expand the scale of stock trading as close as possible to guarantee security of mobile transactions. Bart, concluded that “investors often worry ‘I think I must have millions of dollars to invest in the stock market. ‘but, in fact, even if only a few hundred dollars, can also be involved.”

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