VC Analyst Turned Entrepreneur Looks to Bring Sophisticated Stock Market Data to Individual Investors with Screener.co
Former venture capital analyst Lenny Grover left his gig at Waltham, MA-based Longworth Venture Partners to make a sustainable business out of a personal hobby: sophisticated stock trading.
No, he’s not working on yet another online trading platform, but is instead looking to the hot field of data and analytics to bring individual investors the information that big institutional investors, particularly hedge funds, have at their disposal when they make trades. It’s about bringing “Wall Street-caliber data and tools to Main Street,” Grover says.
Grover started developing the product, called Screener.co, in August while still at Longworth, left to work on Screener.co full-time in November, and late last month debuted the technology at the San Francisco entrepreneur conference Launch, put on by Mahalo CEO Jason Calacanis.
Grover says the service is hitting a customer sweet spot in several ways. For one, it’s only charging $24.95 per month— about 1/100th of the cost of existing tools that provide similar sets of data to individual investors. (Actually, it doesn’t even cost that much until April 1; Screener is free in its beta period this month). Grover licensed the stock data from Thomson Reuters on a piecemeal basis, and he builds the actual calculations and analytical engine, which is why he can put out his product for so cheap. Grover likens this new piece-by-piece distribution of stock data to how iTunes broke up albums and allowed customers to buy individual songs. Supplying sophisticated stock information to individual investors is also a new market for Thomson Reuters, he says.
Grover, who studied computer science at Cornell and worked for Louisville, KY-based Chrysalis Ventures prior to Longworth, says he first saw the need for sophisticated stock data at the individual level after the markets tumbled in 2008.
“I had this in the back of my mind since March 2009 when I saw that the whole world was on sale,” he says. “And I didn’t have the tools to analyze stocks to figure out what the best investment opportunities were. I saw this need from the individual investor perspective.”
And his venture capital background played a part. “Even if you’re doing private investing, you’re looking at companies and valuations,” he says. “It informed a lot of the ways I built this tool.”
So what else makes Screener.co different from what’s out there? The service paints a much more complete picture of the global stock market than free tools like Google Finance or Yahoo! Finance, Grover says. They offer information on roughly 6,000 to 9,000 stocks, whereas Screener.co tracks data for 48,000 securities, roughly 30,000 companies (some are listed on multiple stock exchanges). And rather than starting with individual stocks or securities, the Screener.co technology allows users to input market conditions or data points in order to find stocks that satisfy their criteria, and study them from there to decide whether to invest. It has roughly 1,000 screening conditions for sorting stocks, compared to Google and Yahoo’s roughly 150, Grover says.
“You need to figure out very quickly which stocks to focus your attention on and research on,” Grover says. Screener.co allows you to “whittle it down, and make it manageable. It’s a way to take a high level view of the market and narrow it down to the stocks you want to focus on. And bring a global perspective to your investing.” The tool also converts everything to U.S. dollars, so investment data is all apples to apples, Grover says.
For now, Grover is Screener.co’s only full-time employee, and he’s been outsourcing some of the development work on the website. That means he’s the main customer service rep for customers of the software, which he admits can be complicated to initially navigate, due to the swarms of data. “I need to understand what they’re dealing with on a day-to-day basis,” Grover says of Screener.co users.
He’s intentionally self-funding the operation at this point so the company can “show enough progress that we can justify what we’re looking for” from outside investors. In the mean time, Grover is out to build up his team. Screener.co will hit customers via direct marketing, and with partnerships or distribution agreements with retail investing firms, who could subsidize the tool for high net-worth individuals. “There’s a huge push in the brokerage front to attract and retain the massive asset set,” he says.
When I met with Grover last week, Screener.co had attracted about 200 users in its four or so days since launching, which he was happy with for a niche product. He says that the public’s reluctance to trust big financial institutions could draw more customers to his product. “Because of the bad behavior on Wall Street, they could take [investing] upon themselves and not trust institutional investors,” he says.