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The failure of articles like this is that they take a snapshot of a company at a point in time and assume that the company's business model and reach doesn't ch
by Johnie 10y ago
The failure of articles like this is that they take a snapshot of a company at a point in time and assume that the company's business model and reach doesn't change. This is the same mistake that many analyst make on early stage companies.
Companies evolve over time and grow in terms of scale. Take a look at Facebook and Google as an example.
- geori 10y agoLOL! This is exactly why Wall St can't make early stage investments. Clearly these are speculative bets on Wealthfront being as large as a mutual fund. The fact that the author doesn't see this means they're overvaluing a mutual fund manager and thinking that an algorithm can't come close to matching that performance. These startups have two major cost advantages over incumbents: 1) no researchers 2) no salespeople. They have higher profitability, so they'll be better equipped to spend on sales & marketing to achieve fast growth. This leads me to think that at least one of these companies is going to grow to the size of a large mutual fund and "WIN".
- fullshark 10y agoI think their growth has slowed though. At least I remember them bragging about 3 billion under management a year ago.
- krallja 10y agoThis article is from January 2016, by the way.
- fullshark 10y agoMakes sense, is there any data from 2017?
- krallja 10y agoBetterment has $8B as of March 16, 2017: SEC form ADV page 8, "Regulatory Assets under Management" https://www.adviserinfo.sec.gov/IAPD/content/ViewForm/crd_iapd_stream_pdf.aspx?ORG_PK=149117 https://www.adviserinfo.sec.gov/IAPD/content/ViewForm/crd_ia... edit: Wealthfront $5B https://adviserinfo.sec.gov/IAPD/content/ViewForm/crd_iapd_stream_pdf.aspx?ORG_PK=148456 https://adviserinfo.sec.gov/IAPD/content/ViewForm/crd_iapd_s...
- fullshark 10y agoThanks. That seems healthy but not enough based on this blog's conjecture. I'd guess they are eventually acquired if I were to bet on their future.
- krallja 10y agoI think acquisition is a totally legitimate exit strategy, as long as they're aware of the direction they are heading.
- asr 10y agoAlways great when someone is willing to go out and collect actual info -- this comment was worth more than the article. Thank you!