San Mateo, CA-based startup Motif Investing is launching today to the public, making its platform for ideas-based investing generally available. The startup is designed to help people invest their money around ideas, rather than individual stocks, and provides customization options and a social network based around the idea that people talk about their investment decisions with friends and family, so why not let them similarly connect with like-minded people online?
Motif groups stocks based on contextual similarities, and allows investors to buy them as-is, or customize them by adding and removing their own stock choices. Users can share the groups of stocks, aptly named Motifs after the startup itself, view historical data on their performance right on the platform, and also discuss with fellow investors right on the site in a newsfeed associated with individuals and Motifs. Some of the sample Motifs, which can include up to thirty stocks, include “Renter Nation,” “Caffeine Fix,” and “Mobile Internet,” and each has a number of stocks related to that overarching theme.
“[Motif co-founder] Tariq Hilaly and I were meeting at a cafe in New York and talking about what we love to talk about, which is investing,” Motif founder and CEO Hardeep Walia told BetaKit in an interview. “And what we learned over dinner, is there were a lot of things we were talking about, the tablet takeover of computers, the cloud, and what we realized is, whereas Tariq could go in his professional job working for a hedge fund and put those ideas to work, for me as a retail investor, it was very hard to actually act on those ideas. And so we started Motif to empower individuals to invest in their ideas.”
As a FINRA member and registered broker-dealer, Motif can actually sell its users stocks online, and they can easily control portfolio weighting via convenient sliders and complete transactions in a matter of seconds. The site charges $9.95 per transaction regardless of size, which is competitive or better than other online stock sites like E*Trade. For June, in celebration of its debut, Motif is waving that charge, however. The site clearly wants to attract a strong pool of early users, because a lot of its success will depend on whether or not the site can build a community of investors who want to interact with one another. The Motif concept of idea-based investing is the hook, but the social nature of the site is what Walia and his team are hoping will keep engagement high and constant.
When they sign up for Motif, users are encouraged to connect their Facebook and Twitter accounts, which lets them find connections but also share their investing decisions to their social networks. And there’s more planned in terms of social network integrations; Walia told us that Motif plans to open up Motif creation to users in the future, and he envisions people mining their Facebook contacts for subject matter experts to help them build the best possible portfolios.
“At launch, we build the Motifs, but right after launch, we’re going to empower you to build your Motifs, to work with your friends on Facebook,” he said. “You might have a friend who’s an expert on water shortage, you can reach out to them and talk water shortage and figure out what stocks to build and you can build your own Motif, publish that to just your friends, just your investing circle, or all of Motif or all of your Facebook network.”
There are a lot of privacy controls built into Motif, which makes sense given that it deals with financial information. But Walia believes that most people will embrace the sharing features, rather than locking their activity down with strict privacy settings. Still, the options are there if users want them.
Motif is an interesting idea, and has so far raised $26 million in funding and attracted some high-caliber advisory talent, like former SEC Chairman Arther Levitt, who is joining Motif as its newest board member to coincide with the public launch. The company’s biggest challenge will be in attracting enough volume business away from traditional brokerages and money managers, which could be difficult given that many will feel more comfortable having a go-between with experience and knowledge between them and their stocks. But the level of control the startup provides will definitely appeal to investors looking for a more hands-on approach.