A watercooler moment with Francois Nembrini, co-founder of TopTradr, the social trading app
In a nutshell, what does TopTradr do?
TopTradr ultimately acts as a recruitment tool for the hedge fund industry. It’s a social trading application that analyses your trading and runs a competition where the winners are backed with capital that gives them a chance to move to the next stage and become a trading professional.
Where did the idea for TopTradr come from?
We realised there was a big need for talent in the hedge fund community. At one end of the spectrum, there are people who are struggling to raise capital because they’re a small money manager or hedge fund. On the other hand, you have very large hedge funds that are household names and get a massive amount of capital allocated to them but have struggled to find the traders to manage this money. The idea was to build a platform where private investors and small money managers get discovered and traders’ activity can be certified before they commit larger amounts of capital.
When did you start up?
How has it gone so far?
The company is at break-even in Q1 this year, which we are happy with, and we are now looking to boost the exposure and deliver the message to a broader audience of traders.
What has been the biggest challenge so far?
We probably underestimated the amount of marketing dollar we needed to get the word out about our concept. A big challenge for us is differentiating ourselves from all of the other trading networks that are mostly promoting copy trading. Our model is not to solely seek investment from investors; our model is to find good traders. When you look at social trading networks, they all focus on raising money from retail investors. This is not our model but it is not always obvious. It is a bit of a challenge to put ourselves outside that realm.
How would you say you differentiate yourself from the competition?
We are hoping to become a viable way for the professional community to find trading talent. I don’t think there is anybody that has those types of ambitions in the social trading network. Most of our competitors are just trying to push a very simple copy trading model, which I don’t think brings the right message to the proper traders. What we are trying to do is promote risk-responsible trading, not sell the idea that you are going to make 100% in a month by following some guru.
What has been the best decision you have made to-date?
I think the best decision was to flip the social trading business model. We are not looking to source capital from rich investors – we are looking to find traders for the professional community. This seems to be supported by the regulator, the FCA, which has issued a lot of warnings about the social trading network and copy trading. TopTradr is vastly different from that business model so I think the decision was right, at least from a regulatory perspective.
Where do you see the business in 12 months’ time?
We have interest from a couple of hedge funds and institutions that want to partner with TopTradr. Hopefully, by the end of the year, we’ll have 5,000 live traders on the system and ideally a partnership with an institution that’s ready to hire some of our traders and take them to the next level.
If you had one piece of advice for entrepreneurs, what would it be?
Don’t underestimate the amount of marketing that you need to put into a good idea. We underestimated how much you need to spend to really get an idea out there.