StonkyStudy #1 | Composer
In investing, it’s said you that you either make money or learn something, but never both.
This begets the age-old question:
Unfortunately, sans PhD, Python expertise, or preternatural coding ability, the secret sauce behind Renaissance Technologies, Two Sigma, and Jane Street rests beyond retail investors' reach. After all, quantitative trading is neither simple nor easy.
Until now, that is.
Composer gives investors the ability to easily drag, drop, edit, and swap quantitative investing strategies from scratch
What's more: they even have a library of expert-vetted strategies to choose from like: Buy the Dips Nasdaq, The Buffett, and The Dalio.
Composer recently closed out their seed round on Stonks to help even more retail investors obtain outsized returns.
To learn more, I sat down and conversed with COO & Co-Founder Ananda Aisola.
Q: Welcome Ananda! Thanks for joining me. What can you tell us about Composer and how you got started?
Ananda Aisola: You bet! Well, I'm both COO and one of the three co-founders alongside Ben, our CEO, and Ronny, our CTO. We've all known each other for over a decade, and that really helps as we're embarking on this journey to build a company.
Composer is an investment app that helps you achieve superior returns using logic and data. It was born out of a personal problem we each faced along different vectors. I come from a finance background and Ben came from tech but has been investing for a long time. We were looking for options out there to invest our own money and we found when we looked at the landscape that there was basically two streams of thought:
- Robinhood YOLO Trading (no further comment needed...)
- The Betterments and the Wealthfronts of the world (which we found quite paternalistic.)
We wanted something that gave us flexibility without having to actually code; a platform that allowed individuals to implement smarter, more sophisticated strategies.
Q: That's wild. What are some examples of the strategies/logic investors can use?
Ananda Aisola: The way that we think about a strategy is creation—or composition, per our name—using a set of building blocks. We have five building blocks that allow you to create and combine across assets such as stocks and ETFs. Then you can assign weights, conditions, and filters to them.
Using these series of primitives, you can create an almost-infinite set of different strategies. An example of that could be something as simple as a risk-on/risk-off strategy. Put simply, when the market is doing well, you want to be in assets that do well as the market goes up. Whereas if the bottom starts to fall out like we've seen over the past few weeks, you want to be in something a bit safer—things like commodities, gold, USD, et cetera.
That's a very simple example. You can also create risk parity strategies, which weight assets based upon their level of risk as opposed to their percentage allocation. It can get fairly complicated and we have a very active community that works on creating these strategies based upon backtests and more.
Additionally, a few weeks ago we launched Opus. This is all of our best thinking distilled into one comprehensive strategy based upon all of the backtests we have done and data we have parsed. Our internal Investment Committee created a first of its kind, one-click systematic investing strategy for retail investors. Think of it as like a robo-advisor 2.0. It's a jumping-off point for people who want exposure to systematic investing, but don't necessarily have the time or the expertise yet to build stuff themselves.
Q: Let's delve into the results of Composer's strategies. How do they perform?
Ananda Aisola: Past performance is obviously not indicative of future results, however, we take the volatile, emotional aspect out of the investing process. What I can disclose is if you compare our Assets under Management (i.e. AUM) to our net deposits, our AUM is actually at-par, if not higher, than those deposits. What that means is that even in this crazy chaotic market, our investors are actually doing as well if not better than the market overall, which is pretty huge. We're still growing and our customers are still making money which is amazing to see play out.
Q: Wow, congratulations not only on that but also your recent big raise! How/why did you choose to close it out via a Customer Round on Stonks?
Ananda Aisola: Stonks was referred to us by our lead investor and, to us, the value proposition was very clear: we get to put our company out there in front of a group of very smart, accredited individuals who could be tremendous value-adds down the road.
What gave us comfort was, when looking at the caliber of other companies who had used Stonks for their raise, that the bar was quite high. It was clear that this was not only about capital, but also about access to a higher, better niche of startups and investors who together make up the Stonks platform.
I'm happy to say that it was a great experience. The team has been super responsive, working with Davis and Adam from the get-go has been a breeze, and Ali has been super helpful looping me into various conversations that investors want to have. We're finalizing the close now and then it's off to the races!
Q: Let's go! Can you share any outcomes that have come from the experience? A big investment or new customers/partners?
Ananda Aisola: I can't give too much detail, but what I'll say is that we got on the radar of a high profile fund who has now written a small check as part of the round and that was solely because of the exposure through Stonks. It was super exciting to have that happen. Sorry, but I can't share more until the i's are dotted and the t's are crossed ;).
Q: I totally understand. Lastly, any words of wisdom or advice for founders considering raising on the platform?
Ananda Aisola: Do it. The upside can be incredibly significant and it's worth the investment of your time. Three bits of advice:
- Promote the event through your channels to your user base, investors, partners, et cetera. These individuals are your cheerleaders and might even become investors on your cap table.
- Spend time polishing your presentation and pitch.
- Tap super users and customers to tell your product's story during the event. No one can speak to the value of your product more than the people using it every day.