The stock market might be cruel and unforgiving these days, but a New York-based startup with an app for investing is on the rise.
In a deal announced Tuesday, Stash got $3 million in a seed round led by Goodwater Capital, with Entrée Capital and Peter Thiel’s Valar Ventures participating. Previously, Stash raised $1.5 million from angel investors.
The Stash app debuted last October, offering help to newcomers to the stock trading world. With as little as $5, users of the app can buy fractional shares based on their beliefs and personal interests. It is a way to get younger people and those unfamiliar with investing started, says CEO and co-founder David Ronick (granted, the markets have been rather brutal of late.)
“There are a lot of misconceptions about what investing is,” he says. “People think they should be trading in and out of stocks or positions, and trying to beat the market.”
Such expectations can be stress-inducing, Ronick says, and most everyone gets it wrong anyway. Stash gives its users a bit of guidance though, even on down days on the market. “You’ll get an advisor message that says something like, ‘Don’t panic; invest for the long-term.’ This may be an opportunity to invest in a stock priced lower than it was a couple of weeks ago,” he says.
So, despite the recent demolition derby among publicly traded stocks, Ronick asserts that investing, given historic trends, remains a good option for building capital. “It’s better than blowing it on booze and bottled water,” he says. “You’ve got to be patient and not think about this as a short-term, ‘beat the market’ game.”
