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Comment by skhatri11 | Hacker News Reader

Hi - I'm Saleem, the Co-Founder & CEO of Instavest.

We've been very careful to stay within the confines of SEC and FINRA law.

We have a number of safeguards in place to protect our customers, including but not limited to: 1. Customers can only trade on NYSE or NASDAQ only - no OTC / Pink Sheets; 2. There is a minimum 14 day hold (this is enforced by Instavest, not our brokerage partner) 3. An investor must disclose if the asset they are purchasing is held on another platform 4. Moderation and review prior to an investment being shared with the community 5. Lead investors have to "put their money where their mouth is" before an investment is shared

Trading in NYSE and NASDAQ securities that highly liquid and have a high average daily trading volume makes it very difficult for any sort of market manipulation, including the pump and dump scheme you referenced.

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>3. An investor must disclose if the asset they are purchasing is held on another platform

workaround: get your spouse/in laws/friends to hold the assets for you

>4. Moderation and review prior to an investment being shared with the community

Can you elaborate how this would work?

>5. Lead investors have to "put their money where their mouth is" before an investment is shared

How would this work if an investor has $500 invested in a company, but his followers have a total of $500,000 invested?

3. Like other financial institutions, we cannot stop bad people from doing bad things. What we can do is put the proper safeguards and procedures to protect people.

4. Let's say you're an investment leader. You buy Tesla and you submit a writeup. The trade gets executed. The write up is reviewed internally by member of the Instavest team and is cross checked for financial discrepancies against SEC filings. Of course, each person prior to using the platform and when posting an investment is disclosing that he or she is not privy to material non public information, etc.

5. You can put $500 in a stock. There is no minimum investment size. I will say that the absolute dollar amount demonstrates some level of conviction to our members. We currently are not capping the level of co-investment but could do so in the near future.

> The write up is reviewed internally by member of the Instavest team and is cross checked for financial discrepancies against SEC filings.

Is this really scalable?

> Is this really scalable?

To what scale? If they've got ~100,000 active lead investors, each executing one trade a week, that's 1,000 reviewers reading 100 plans a week. If it takes 15-30 minutes to read and validate each one (I'm assuming a cursory check here), then we're talking ~35 hours a week.

If each lead investor's trade can trigger 25 follow-on trades, that's $8.75M in trading fees, per week. Obviously, those are nice, blue sky numbers, but I think it's clear that in their best case, the biggest problem will be hiring enough qualified reviewers, and a thousand employees is a reasonable hiring target IMO.

Using your numbers and assuming employees adequately qualified to assess investment plans tends to cost in the $2k/week range, you'd want to be pretty confident that lead investors typically were generating something approaching 25 follow on trades though...

> that's $8.75M in trading fees, per week.

But those fees go to the brokerage (Tradier?), not them, right?

Saleem, you need to fix the TOS text at the end of the page. Not only it's not formatted but it calls for a link which isn't there (Desktop using the latest version of firefox and windows, adblock disabled).

Can you please post the specific line (or just email z@instavest.com)? I can't see what you're talking about. Thanks for reporting it, once you let us know we will fix it ASAP.

Leveraged ETFs are inherently more volatile than their underlying benchmark or index. For more information, CLICK HERE. Accounts are carried and cleared with First Southwest Company ("FSC").

Thanks, we fixed it!

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