KaChing, a stock-picking site launching today, aims to find the best investors -- regardless of how much money or experience they have -- and help them make more money.
Competing services include Cake Financial, Zecco, Wikinvest, Covestor, PersonalRIA and many others. KaChing differentiates itself through its investor-analysis software and its use of social networks to bring in thousands of users.
The Securities and Exchange Commission has also designated kaChing a registered investment advisor. Next year, the Redwood City, Calif. company will begin letting users link their brokerage accounts to top investors on the site, so they can make actual stock trades that emulate the stars.
To get started, you join the site, add your portfolio of stocks -- a fantasy portfolio, for now -- then provide details about your overall investment strategy and rationale for picking particular companies. KaChing compares this information to stocks' actual performance in the market. Then kaChing uses behavior-based software to figure out which investors are performing best, based on a set of criteria it has developed. The "Skill Score" measures whether an investor's superior returns are due to skill -- based on their stated investment strategy -- or luck. The "Research Rating" measures how other users react to an investor's rationale for picking stocks, through features like comments.
The company has already gained more than 350,000 users, largely from its Facebook application. As other app developers have already done, kaChing has turned its Facebook users into users on the site it's launching today.
When the stock-trading service launches next year, top investors will be able to make money from the site. KaChing will charge a one percent convenience fee for stock trades conducted through the service and split the revenue with the investors who others emulate.
The company has gotten funding from some big names in Silicon Valley investing, including Andy Rachleff and Bruce Dunlevie of Benchmark Capital, entrepreneur Marc Andreessen, Kleiner Perkins affiliated partners Kevin Compton and Doug Mackenzie, former Opsware chief executive Ben Horowitz, Open Table president Jeff Jordan and Ronnie Lott and Harris Barton of HRJ Capital.