This is an interesting securities offering.
Hedge is a startup that wants to use tech to empower you to create your own hedge fund. Yes, you will be able to gather a group of friends or acquaintances to pursue collaborative investing in a structured portfolio. Hedge hopes to take social investing to another level. Perhaps like an AngelList + alternatives for retail?
To quote Hedge:
“Most investment trading apps are geared towards individuals, placing more emphasis on order volume than teaching investors how to trade. Hedge has created a way to help make investing more inclusive and educational. Their collaborative trading platform allows investors to set up a hedge fund with their friends by pooling money and investing together. Instead of focusing on how many trades an investor makes, Hedge is designed to help them grow their assets by providing learning resources and social investment tools.”
Hedge believes that platforms like Robinhood are no longer “nimble enough” and social investment platforms (like StockTwits) are incomplete solutions and “look more like a transplant of investing Twitter.”
Beyond the tools, Hedge will allow you to invest in stocks and options, crypto as well as NFTs. Pool money and then execute your strategy. Of course, you can use the platform to invest individually. Hedge is currently providing brokerage services via Alpaca Securities but Hedge says it is currently seeking FINRA approval to operate as a broker-dealer. The company hopes to provide sophisticated tools to smaller investors to aid in the investment process.
According to the Form-C filed with the SEC:
“The Company’s business will generate revenue initially through the offering of cryptocurrency trading features, as well as an optional premium subscription to Hedge, and will begin to generate additional revenue through payment for-order flow, securities lending, interest on un-invested capital and unpaid margin balances, and other sources that stem from the Company’s investment platform and its partnership with a full-service broker-dealer. The Company plans to expand its product offerings long-term to include a variety of assets and investment strategies, as well as additional monetization routes for its social features.”
Hedge has previously raised a small amount of money in pre-seed funding from OnDeck’s ODX Accelerator and $1.2 million from Firstminute Capital, Starting Line VC, OrangeDAO (1300+ YC founders), Creatorled Ventures, Bain Capital Ventures Scout Fund, Startupfon VC, and others.
A full public launch is planned for Q3 of 2022 with onboarding starting soon. Over time, Hedge expects to add private securities like those listed on Republic as well as other alternatives.
If you are interested, the offering page is live on Republic now. Hedge is selling a CrowdSafe at a valuation cap of $19.5 million without a discount (a bit different). Hedge hopes to raise up to $1.07 million. As of today, 211 investors have committed $122,000. Remember to always read the offering circular.
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