Q&A: SprinkleBit Sets Out to Crowdsource Active Investing

SprinkleBit founder and CEO Alexander Wallin

start your practice portfolio. Our brokerage charges $8 per trade and regular margin rates. In coming months we will launch premium features that will dramatically simplify your investing for $9.95 a month.

X: Efficient market theory says an individual investor cannot consistently achieve returns that exceed average market returns over the long term. So SprinkleBit might be leveraging the wisdom of the crowd, but isn’t it still active investing? Isn’t the underlying premise that some investors believe they can beat the average by making prescient stock picks?

AW: I wish the market was as simple as the efficient market hypothesis. There will always be asymmetric information in any marketplace. However, with the help of SprinkleBit you can leverage the power of crowdsourced information to give you the informational advantage. For the past 14 months our community has performed better than the market. I’m even more excited to see the comparison in a bear market.

X: Why is it called SprinkleBit?

AW: Five years earlier, my brother Christoffer registered SprinkleBit.com as a domain name, intending to start a business comparable to Alibaba. The name comes from sprinkle–to distribute—and bit—as in information. SprinkleBit was a perfect fit for a platform dedicated to sharing information.

X: How did you capitalize the startup?

Alexander Wallin
Alexander Wallin

AW: At the age of 23, there are not a lot of folks lining up to invest in an idea based on a PowerPoint presentation. With the help of my brother and father we received the startup capital needed from friends and family. We hired two Swedish developers to get a small beta platform out there. Through a former colleague we found a guy who used to work for the Financial Industry Regulatory Authority, the securities regulatory body, to help us get started on our FINRA membership. This limited platform was enough to spark the confidence that we were really on to something.

X: What kind of difficulties have you experienced?

AW: I met Zecco co-founder Stephen Oliveira in early 2012, and he decided to join us. We also hired a bigger team with developers in Cyprus, marketing in San Diego, and brokers in Los Angeles. Everything was looking gravy with a small round of capital raised from friends and family to take us to live trading. I couldn’t have been more wrong. Two months later our clearing firm was acquired and we got tossed after they changed their business model. Four months later, I lost my U.S. visa status, and had to move back to Sweden for half a year to update it.

We continued to

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.