Stocktwits Closes its Series A a/k/a Building a Long Tail Meritocracy

I, @infoarbitrage, am pleased to announce that we just closed a Series A round for Stocktwits, providing the resources to get to break-even while preserving the small, tightly-knit, scrappy company culture that has served us so well. Soren (@sorenmacbeth) and the team have gotten us pretty far along on very little money; the time has come to give them some more resources to continue building the vibrant, intelligent, active and valuable community that has emerged. IA Capital Partners, LLC led the round and I am joined by an All-star group of investors who bring huge value to the company. Stocktwits community leaders. Media mavens. Search experts. Twitter gurus. Here is a slice of our syndicate:

  • James Altucher: Founder, Stockpickr; Columnist at TheStreet.com; author; hedge fund manager;
  • betaworks: A leading NYC-based early-stage media and technology investor; Investor in Summize, sold to Twitter;
  • Bill Bishop: Co-founder of Marketwatch; based in China, provides 24-hour perspective;
  • Eric Bolling: NYMEX trader and Board member; Financial Analyst, Fox Business News;
  • Gerry Campbell: Former President, Search & Content Technologies at Reuters;  SVP of AOL Search;
  • Michael Parekh: Former Head of Global Internet Research and MD, Goldman Sachs; uber-blogger;
  • Todd Stottlemyre: 2-time World Series Champion pitcher, stock fanatic and active Stocktwits community participant;
  • Rikki Tahta: Co-founder, Covestor;
  • Alan Warms: Former VP and GM of Yahoo News; Founder, BuzzTracker, sold to Yahoo; and
  • Power bloggers/Stocktwits community leaders such as Andy Swan(@andyswan) and UpsideTrader (@upsidetrader).
  • You know how people always say “We want value-added investors” but this seldom comes to pass? I’m not sure if I’ve ever been part of a deal where so many of the investors are either domain experts, power-users of the product or super connectors with rolodexes filled with relevant contacts. In short, it is an exciting time to be working with the company.

    Harnessing the power of vertical communities is one of my passions, and Stocktwits has been a real-life, real-time incubator. How do you best engage the community? How do you continue to drive value and build greater “stickiness?” How should you prioritize new features and functionality that meet the community’s evolving needs? Since we started with a blank slate we were able to be intensely customer-focused from Day 1, and it is a culture that runs through everyone that is formally or informally affiliated with Stocktwits. I draw this distinction because there are lots of bloggers and community participants that have been incredibly helpful as we’ve built the platform, and while they are neither investors nor employees have had a profound impact on the product and our roadmap. Building for the community by listening to the community: makes sense, but I’ve seen it done other ways, usually to that company’s detriment. At Stocktwits, Soren, Phil (@ppearlman) and the team are doing it right.

    We are also working on deals with distribution partners who are eager to bring the Stocktwits commentary into their feeds. One such partner is Bloomberg. We are working with them to create a filtered feed of high-value Stocktwits commentary, that can be incorporated into their already large and growing pipe of alternative content such as online news, blogs other non-traditional sources. Who says you can’t teach an old dog new tricks? Bloomberg is getting it, and Stocktwits can be part of their answer. Why? Real Investors. Real Ideas. Real Time.

    The amazing thing to me is how, in such a short time, a group of powerful Stocktwits influencers has emerged. Who knew the wisdom of Gregor MacDonald (@GregorMacDonald) before he starting blasting away on Stocktwits? His prescient calls on energy have been unreal, well ahead of conventional Wall Street sentiment. Now he has a huge following and his reputation has skyrocketed. UpsideTrader has made his presence known, also commanding a large fan base eager to read his comments at the open and throughout the day. The information is actionable. The insights, often contrarian (and accurate) relative to mainstream commentators. These thought leaders were not household names or even recognizable in the blogosphere – until now.

    Stocktwits massively leverages the power of the long tail, but the reason followers are able to rapidly identify value is because of reputation. THE STOCKTWITS COMMUNITY IS A MERITOCRACY. Those that hem and haw and say little don’t get followed. Those who are insightful, sharp and decisive command large readership. And this is the way it should be. We’ve only just seen the tip of the iceberg of what the Stocktwits community can and will become. But the power of the platform is clear.

    The best is yet to come, my friends. Oh yes, the best is yet to come.

    About Roger Ehrenberg 94 Articles

    Roger is an active early-stage investor, having seeded or invested in over 20 companies in asset management, financial technology and digital media since 2004. Prior to his venture days Roger spent 18 years on Wall Street in M&A, Derivatives and proprietary trading.

    Throughout his career he has held numerous executive positions, including:

    President and CEO of DB Advisors LLC, a wholly-owned subsidiary of Deutsche Bank AG. His 130-person team managed over $6 billion in capital through a twenty-strategy hedge fund platform with offices in New York, London and Hong Kong.

    Managing Director and Co-head of Deutsche Bank’s Global Strategic Equity Transactions Group. In 2000, his team won Institutional Investor magazine’s “Derivatives Deal of the Year” award.

    As an Investment Banker and Managing Director at Citibank, he held a variety of roles and responsibilities in the Global Derivatives, Capital Markets, Mergers & Acquisitions and Capital Structuring groups.

    Roger sits on the Boards of BlogTalkRadio; Buddy Media; Clear Asset Management; Global Bay Mobile Technologies and Monitor110. He is currently Managing Partner of IA Capital Partners, LLC.

    He holds an MBA in Finance, Accounting and Management from Columbia Business School and a BBA in Finance, Economics and Organizational Psychology from the University of Michigan.

    Visit: Information Arbitrage

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