KaChing is a new startup that allows you to bet alongside top investors, so that every move they make can be duplicated in your portfolio. VentureBeat likens it to “fantasy football for investing junkies,” but its effect is more subversive than that; it makes amateur day-trading into a guided art, in which small time investors can bet their eggs alongside the site’s best performing members–for better or worse.
If you’re a good investor, why let the rabble tag along? Because every investor that follows you pays you a fee between .25 and 3% (though KaChing takes a quarter of that).
KaChing calls the members of this leaderboard “geniuses,” and they have to go through a vetting process before other customers are allowed to invest alongside them. (They have to be on the site for a year, and they also have to sign legal agreements that precludes them from front-running.) Netscape co-founder Marc Andreessen is one angel involved in the project; another is OpenTable CEO Jeff Jordan.
So what’s the inevitable downside? Betting on someone else’s savvy takes personal research out of the equation. Services like E-Trade provide their customers with detailed analyst reports from outlets like ThomsonReuters, and anyone with money to lose makes it their business to read those reports for basic red flags (How much debt? When does it come due?). Though it’s worth mentioning that KaChing doesn’t see itself as an affront to services like E-Trade; instead, it hopes to disrupt the other “guided day-trading” market, otherwise known as the world of mutual funds. Competitors like Covestor are also vying for the same disruption.
KaChing’s “investing IQ,” a score assigned to each “genius,” presents investors with a mental short-cut to doing their homework. A great time-saver if that genius bets right; a real face-palm inducer if they’re wrong.
To check out KaChing for yourself, be ready to pony up a minimum of $3,000 and click here.