Instavest, Inc.

Instavest, Inc. operated as a collaborative online investment platform, founded in 2014 by Saleem S. Khatri and Zain Allarakhia. The company emerged from the Y Combinator Winter 2015 batch, aiming to make the investment strategies of experienced traders accessible to a broader audience. Khatri, the CEO, brought his experience from the U.S. Department of the Treasury's Office of Financial Stability, where he was involved with the Automotive Industry Financing Program. The initial concept arose from friends and family wanting to replicate Khatri's and Allarakhia's trades, highlighting a need for a streamlined tool to do so.

The platform enabled users, referred to as 'Lead Investors', to share their stock market investment ideas, including the rationale and specific trades. Other retail investors could then replicate these trades. A key feature was the notification system, which alerted followers whenever a Lead Investor bought, sold, or liquidated a position. Initially, a significant hurdle was the manual process of users having to execute trades on their own brokerage platforms and then log them back into Instavest. This was later addressed by integrating with about ten online brokerage firms, including E*Trade and OptionsHouse, allowing users to trade directly from the Instavest website.

Instavest's revenue model evolved over time. At first, it relied on a voluntary tipping system, where users who profited from a copied trade were encouraged to give a small percentage, around 5%, to the Lead Investor. The company also had a partnership with Tradier Brokerage, earning a referral fee for each new account opened. To create a more reliable income stream for its top investors, the company later introduced a paid subscription model, allowing Lead Investors to create newsletters with their stock tips for a monthly fee. The company raised a total of $1.82 million over several seed rounds, with notable investors including Y Combinator, Cherubic Ventures, and FundersClub. Despite its initial traction, Instavest ultimately ceased operations, with its SEC registration terminated in early 2018.

Keywords: social investing, copy trading, retail investors, investment platform, stock market, fintech, Y Combinator, Saleem S. Khatri, Zain Allarakhia, collaborative investing, trade replication, brokerage integration, investment newsletter, lead investors, financial technology, investment community, stock tips, peer-to-peer investing, algorithmic trading, portfolio sharing