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They haven’t “won” anything yet...a high private unicorn valuation doesn’t mean success. I would really caution connecting your bank account through Plaid on R

They haven’t “won” anything yet...a high private unicorn valuation doesn’t mean success. I would really caution connecting your bank account through Plaid on RH. It’s really unclear what data they are collecting but their privacy policy suggests they are collecting your bank account transaction history using Plaid’s API. 100% a dealbreaker for me.

hartator 8y ago
They do? I had no idea about that.
- dawhizkid 8y ago
  Exactly.
davidiach 8y ago
>They haven’t “won” anything yet...a high private unicorn valuation doesn’t mean success. We could debate what "success" means endlessly, but if you're a VC, your job is to put money in companies with low valuations that will eventually end up with high valuations.
- dawhizkid 8y ago
  Success generally means a future liquidity event...an IPO with a sustained share price well above what you bought in for or a sale.
- sib 8y ago
  I think the idea is that, since RH hasn't been acquired or gone public, they haven't yet "ended up" with a high valuation. It could all go away before the investors can get liquid (e.g., Theranos for a pathological example).
  - JumpCrisscross 8y ago
    There are deep secondary markets around late-stage venture-backed companies. Robinhood investors seeking to exit around this valuation have options.
    - ryguytilidie 8y ago
      Just to clarify, we're debating whether Robinhood is a success and the measure of success being used is "can early investors cash out for a gain?" What if every company checked that box and couldn't provide lasting value beyond that? Do we still consider this a success because we're posting on a forum run by a VC?
      - JumpCrisscross 8y ago
        > What if every company checked that box and couldn't provide lasting value beyond that? That would mean an overheated late-stage market. (Which recent IPO data haven’t yet made obvious is a thing.)
      - argonaut 8y ago
        Ignoring any one specific company for a moment, an investor consistently able to invest early and time their exits near the peak of each company's valuation would be a roaring success.
        ryguytilidie 8y ago
        That's my point. We're saying that Robinhood is a success as a company because an early investor would have had a nice exit? Thats our "success" barometer? I'm going to call BS on that one.
      - sokoloff 8y ago
        > What if every company checked that box and couldn't provide lasting value beyond that? How long do you think that would be a sustainable situation? A high mid to late-private stage valuation is only supported by the promise of subsequent valuations. If every company stopped achieving those subsequent valuations, it would feed back into the private valuations.
- who_is_firing 8y ago
  I think your job is to put money in companies with low valuations that EXIT with high valuations. Your investors won't give a crap if you do a good job of finding unicorns that eventually fissle out.
- charlesdm 8y ago
  * Your job is to put money in companies with low valuations, that you will eventually be able to exit at a high valuation. It's all rainbows and unicorns, until someone hands you cash and you manage to exit your private, illiquid investment.
  - quakenul 8y ago
    A valuation is defined as an estimation of value. It's not a guarantee, it's not a sale contract, but does that make it rainbows and unicorns? Well, about as much as any other estimation around a highly complex and mostly unique construct, I would say. It's certainly the first step towards a possible sale.
    - phamilton 8y ago
      The dimensions of preferences and signalling contort the actual valuation. Remember that 409A valuations are generally drastically below preferred price. I'd be much more inclined to discuss startup valuations in the terms of 409A valuations.
paulpauper 8y ago
considering how popular it is, i think the high valuation is here to stay . Regular online brokers have, for years, been charging clients too much, with arbitrary fees, almost as a form of collusion .Robinhood breaks this cartel up, much like Uber broke up the taxi cartel.
- deleted 8y ago
  [deleted]
- dawhizkid 8y ago
  $4.95 per trade on Schwab is “too much”? I’ll stick with my Schwab brokerage + free investor checking with unlimited international atm fee rebates over giving up my entire bank account transaction history. What data are you citing that suggests RH is actually popular given they have released no data about trade volume? This BI story suggests they have a lot of catching up to do to justify their valuation http://www.businessinsider.com/robinhoods-new-web-platforms-raises-questions-about-its-astronomical-user-growth-2018-3 http://www.businessinsider.com/robinhoods-new-web-platforms-...
  - radicality 8y ago
    Where do you need to give your transaction history? I have both Schwab and RH and don’t recall it ever asking for such permissions. I only have a linked checking account for ACH deposits and transfers.
    - akhatri_aus 8y ago
      You don't have to provide your transaction history, you can use an ACH trial deposit as an alternative to verification.
      - dawhizkid 8y ago
        That’s not the point. Even techie types commenting on here (who should know better about trusting a free Fintech product) didn’t think twice about it. Most commenting on here are surprised to learn Robinhood even collects this info when you do use Plaid.
DSingularity 8y ago
Thank you. Disconnecting my bank acct ASAP!
gst 8y ago
You can use ACH trial deposit verification with Robinhoodas alternative to Plaid.
- dawhizkid 8y ago
  Missing the point. That option is hidden. Most are connecting through Plaid. Even techies on here have no clue Robindhood collects this information when you link a bank account.
  - 8note 8y ago
    I've been holding off adding a bank account till I open a new one specifically for robinhood
hkmurakami 8y ago
Well, secondary markets.
1ste 8y ago
Plaid provides account aggregation features so it definitely do access your transaction history. Is your issue with Robinhood collecting this data or Plaid.. or is the issue with sharing your transaction history. What do other people think about sharing this type of information?
- aje403 8y ago
  I think it's really obvious what people think, the question is whether people know or not. I think it's pretty obvious this should be considered criminal theft. This is like if you hire guys to sweep and dust the shelfs in your bank vault and you walk in on them taking pictures and writing down every single item on a ledger. All across the country. Not that you should hire people to clean your bank vault. This should be extremely illegal. We just really need more congressmen who know what an email address is.
  - 1ste 8y ago
    I'm talking about giving consent and actively sharing the data. Look up PSD2 in Europe.
    - aje403 8y ago
      No, you can't have my bank account transaction history. I am speaking on behalf of every human being on the planet not employed at Plaid. Why is this a question? I looked it up - I'm sure the regulation is massive so not going to read through it entirely, but that looks terrifying. Great time to buy a plot of land somewhere not covered by google maps and start burying gold. I can't really imagine a product that would I would use on top of that and I'm kind of curious who exactly lobbied for that legislation.
      - 1ste 8y ago
        When you go for a mortgage you have to share your transaction history with the bank you apply to. You may apply to multiple banks and you may use a broker who you would also have to share that information with. I think people would share that information if they could get some benefit from it.
flylib 8y ago
except they already took a large secondary offering they keep if the company fizzles out "Yesterday we discussed how Robinhood had raised $363 million in new funding at a $5.6 billion post-money valuation. All of that was primary capital, but we've since learned from multiple sources that there also was a secondary transaction whereby Robinhood's co-founders and some early employees cashed out just north of $100 million." https://www.axios.com/newsletters/axios-pro-rata-9833c302-3682-48d6-8f68-daee138f5670.html https://www.axios.com/newsletters/axios-pro-rata-9833c302-36...
mideaster 8y ago
Venmo also uses Plaid for bank connection, though I doubt their user base really cares
dionidium 8y ago
Create a checking account that you use only for Robinhood. You can open a free checking account online in about 5 minutes.
error54 8y ago
I did not know about Plaid until today. https://plaid.com/solutions/transaction-data/ https://plaid.com/solutions/transaction-data/ > Our high-functioning platform pulls up to 24 months of data directly from users’ bank accounts. Whoa. I never agreed to anything like that. How is this legal/why would banks let a startup have this much information?
- foodstances 8y ago
  You authenticate to Plaid with your bank credentials, so it's not much different than the data you can get directly from the bank through OFX (like Quicken and other things do). Plaid just simplified it and put a better API on it.
whockey 8y ago
Hey dawhizkid - co-founder of Plaid here. I can't give the rationale on why RH wrote the privacy policy the way they did, but I can guarantee you that they are not pulling transactional data. They're only using Plaid for the ACH authentication. If you'd like more insight feel free to shoot me a note at william at plaid dot com.

hartator 8y ago

They do? I had no idea about that.

dawhizkid 8y ago
Exactly.

davidiach 8y ago

>They haven’t “won” anything yet...a high private unicorn valuation doesn’t mean success. We could debate what "success" means endlessly, but if you're a VC, your job is to put money in companies with low valuations that will eventually end up with high valuations.

dawhizkid 8y ago
Success generally means a future liquidity event...an IPO with a sustained share price well above what you bought in for or a sale.
sib 8y ago
I think the idea is that, since RH hasn't been acquired or gone public, they haven't yet "ended up" with a high valuation. It could all go away before the investors can get liquid (e.g., Theranos for a pathological example).
- JumpCrisscross 8y ago
  There are deep secondary markets around late-stage venture-backed companies. Robinhood investors seeking to exit around this valuation have options.
  - ryguytilidie 8y ago
    Just to clarify, we're debating whether Robinhood is a success and the measure of success being used is "can early investors cash out for a gain?" What if every company checked that box and couldn't provide lasting value beyond that? Do we still consider this a success because we're posting on a forum run by a VC?
    - JumpCrisscross 8y ago
      > What if every company checked that box and couldn't provide lasting value beyond that? That would mean an overheated late-stage market. (Which recent IPO data haven’t yet made obvious is a thing.)
    - argonaut 8y ago
      Ignoring any one specific company for a moment, an investor consistently able to invest early and time their exits near the peak of each company's valuation would be a roaring success.
      - ryguytilidie 8y ago
        That's my point. We're saying that Robinhood is a success as a company because an early investor would have had a nice exit? Thats our "success" barometer? I'm going to call BS on that one.
    - sokoloff 8y ago
      > What if every company checked that box and couldn't provide lasting value beyond that? How long do you think that would be a sustainable situation? A high mid to late-private stage valuation is only supported by the promise of subsequent valuations. If every company stopped achieving those subsequent valuations, it would feed back into the private valuations.
who_is_firing 8y ago
I think your job is to put money in companies with low valuations that EXIT with high valuations. Your investors won't give a crap if you do a good job of finding unicorns that eventually fissle out.
charlesdm 8y ago
* Your job is to put money in companies with low valuations, that you will eventually be able to exit at a high valuation. It's all rainbows and unicorns, until someone hands you cash and you manage to exit your private, illiquid investment.
- quakenul 8y ago
  A valuation is defined as an estimation of value. It's not a guarantee, it's not a sale contract, but does that make it rainbows and unicorns? Well, about as much as any other estimation around a highly complex and mostly unique construct, I would say. It's certainly the first step towards a possible sale.
  - phamilton 8y ago
    The dimensions of preferences and signalling contort the actual valuation. Remember that 409A valuations are generally drastically below preferred price. I'd be much more inclined to discuss startup valuations in the terms of 409A valuations.

paulpauper 8y ago

considering how popular it is, i think the high valuation is here to stay . Regular online brokers have, for years, been charging clients too much, with arbitrary fees, almost as a form of collusion .Robinhood breaks this cartel up, much like Uber broke up the taxi cartel.

deleted 8y ago
[deleted]
dawhizkid 8y ago
$4.95 per trade on Schwab is “too much”? I’ll stick with my Schwab brokerage + free investor checking with unlimited international atm fee rebates over giving up my entire bank account transaction history. What data are you citing that suggests RH is actually popular given they have released no data about trade volume? This BI story suggests they have a lot of catching up to do to justify their valuation http://www.businessinsider.com/robinhoods-new-web-platforms-raises-questions-about-its-astronomical-user-growth-2018-3 http://www.businessinsider.com/robinhoods-new-web-platforms-...
- radicality 8y ago
  Where do you need to give your transaction history? I have both Schwab and RH and don’t recall it ever asking for such permissions. I only have a linked checking account for ACH deposits and transfers.
  - akhatri_aus 8y ago
    You don't have to provide your transaction history, you can use an ACH trial deposit as an alternative to verification.
    - dawhizkid 8y ago
      That’s not the point. Even techie types commenting on here (who should know better about trusting a free Fintech product) didn’t think twice about it. Most commenting on here are surprised to learn Robinhood even collects this info when you do use Plaid.

DSingularity 8y ago

Thank you. Disconnecting my bank acct ASAP!

gst 8y ago

You can use ACH trial deposit verification with Robinhoodas alternative to Plaid.

dawhizkid 8y ago
Missing the point. That option is hidden. Most are connecting through Plaid. Even techies on here have no clue Robindhood collects this information when you link a bank account.
- 8note 8y ago
  I've been holding off adding a bank account till I open a new one specifically for robinhood

hkmurakami 8y ago

Well, secondary markets.

1ste 8y ago

Plaid provides account aggregation features so it definitely do access your transaction history. Is your issue with Robinhood collecting this data or Plaid.. or is the issue with sharing your transaction history. What do other people think about sharing this type of information?

aje403 8y ago
I think it's really obvious what people think, the question is whether people know or not. I think it's pretty obvious this should be considered criminal theft. This is like if you hire guys to sweep and dust the shelfs in your bank vault and you walk in on them taking pictures and writing down every single item on a ledger. All across the country. Not that you should hire people to clean your bank vault. This should be extremely illegal. We just really need more congressmen who know what an email address is.
- 1ste 8y ago
  I'm talking about giving consent and actively sharing the data. Look up PSD2 in Europe.
  - aje403 8y ago
    No, you can't have my bank account transaction history. I am speaking on behalf of every human being on the planet not employed at Plaid. Why is this a question? I looked it up - I'm sure the regulation is massive so not going to read through it entirely, but that looks terrifying. Great time to buy a plot of land somewhere not covered by google maps and start burying gold. I can't really imagine a product that would I would use on top of that and I'm kind of curious who exactly lobbied for that legislation.
    - 1ste 8y ago
      When you go for a mortgage you have to share your transaction history with the bank you apply to. You may apply to multiple banks and you may use a broker who you would also have to share that information with. I think people would share that information if they could get some benefit from it.

flylib 8y ago

except they already took a large secondary offering they keep if the company fizzles out "Yesterday we discussed how Robinhood had raised $363 million in new funding at a $5.6 billion post-money valuation. All of that was primary capital, but we've since learned from multiple sources that there also was a secondary transaction whereby Robinhood's co-founders and some early employees cashed out just north of $100 million." https://www.axios.com/newsletters/axios-pro-rata-9833c302-3682-48d6-8f68-daee138f5670.html https://www.axios.com/newsletters/axios-pro-rata-9833c302-36...

mideaster 8y ago

Venmo also uses Plaid for bank connection, though I doubt their user base really cares

dionidium 8y ago

Create a checking account that you use only for Robinhood. You can open a free checking account online in about 5 minutes.

error54 8y ago

I did not know about Plaid until today. https://plaid.com/solutions/transaction-data/ https://plaid.com/solutions/transaction-data/ > Our high-functioning platform pulls up to 24 months of data directly from users’ bank accounts. Whoa. I never agreed to anything like that. How is this legal/why would banks let a startup have this much information?

foodstances 8y ago
You authenticate to Plaid with your bank credentials, so it's not much different than the data you can get directly from the bank through OFX (like Quicken and other things do). Plaid just simplified it and put a better API on it.

whockey 8y ago

Hey dawhizkid - co-founder of Plaid here. I can't give the rationale on why RH wrote the privacy policy the way they did, but I can guarantee you that they are not pulling transactional data. They're only using Plaid for the ACH authentication. If you'd like more insight feel free to shoot me a note at william at plaid dot com.