When former YouTube product manager Kevin Shaw, known as “Sir Jack A Lot” on Reddit, turned $35,000 into trading stocks worth $8 million between 2020 and 2022, many people thought his fortunes and method of investing had peaked. Just like memstock in 2021. It was crazy.
However, Shaw disagrees, and is now building a startup for retail investors that aims to provide the quality investment advice and community that people used to enjoy on platforms like the WallStreetBets subreddit, but with a layer of accountability that discourages scammers and bulldozers.
Launched in April 2022, AfterHour allows users to link to their stock brokerage accounts, and post their investments to a social feed, under a username of their choice. “The only reason people trust me and Roaring Kitty is because we are transparent,” Xu told TechCrunch. “Why don’t you show your actual positions or prove that you’re actually into something? [AfterHour] Restores the level of credibility and trust. You can link your brokerage and share real positions and verified screenshots.
The company currently has more than 23,000 users, and while that’s not an eye-catching number by any means, its user base is growing, and early adopters appear to be committed — Xu said that more than 70% of his users use the app every day. day. Shaw said the company is currently focused on growth, but has plans for how to generate income in the future.
“Monday through Friday, 9:30 a.m. to 4 p.m. is the game,” Shaw said. “When we started, I was so afraid it would be quiet on the weekends, but on Monday, people just come back. We don’t send out any fraudulent notifications to get people back on Monday, but they come back normally.
The startup recently raised a $4.5 million seed round led by Founders Fund — Keith Rabois’ last investment in the company — and General Catalyst. Pear VC, Daybreak Ventures, and F4 Fund, among several others, also participated. Shaw said AfterHour is now focused on growing its user base and team.
Shaw believes that allowing users to be anonymous is why the AfterHour approach is so successful. He noted that he used to feel awkward about the idea of talking to fellow YouTubers about stock trading during his off hours, and thinks he’s probably not alone in feeling that way.
But on the other hand, he realizes that an environment that encourages a lack of accountability is not a good idea for a platform like his. This dynamic breeds scammers and scammers like Reddit and X, looking to pump out their positions, or post fake trades to induce others to invest.
He added that since people can only post their actual trades, it removes a lot of the bad actors. Of course, there will be some corrupt elements, but Xu said the startup works to monitor posts, reporting anything suspicious through a system of warnings and community feedback — as opposed to X’s community-based approach to moderation.
Xu admitted that this monitoring system will not remain effective as the platform continues to expand. “Right now, I’m on the app reminding people that independent thinking is exciting,” Shaw joked. He added that the company is working on a plan to curb bad behavior, and is considering ideas such as an algorithm that could automatically flag posts that appear to be fake.
This deal stood out to me because I think it’s a smart play to build services for retail investors. The trajectory of this space reminds me a lot of the world of cryptocurrencies. Although very different, they are both investment areas that have their 15 minutes of fame, but while fading from the mainstream, they still maintain dedicated and growing communities of people interested in their approach.
However, AfterHour is a particularly smart idea because, as with cryptocurrencies, there is a lot of money to be made here — and just as much to lose. Such platforms cannot guarantee that their users will achieve financial success, but that does not mean that ordinary people should be completely denied access to stock markets, which companies such as Robinhood and, more recently, Destiny Tech 100, have worked to democratize.
“The big misconception in the Valley was that retail was a fad in 2021,” Shaw said, referring to the stimulus check. “It’s only growing. The data backs that up.”
For context, 2023 was the most Active year ever For retail trade. Robinhood saw more than $86.6 billion Trading volume In May alone.
AfterHour isn’t the only company recognizing the potential of this space — Robinhood’s media expansion is a good example. The trading app bought the Snacks newsletter, which focuses on retail investors, in 2019. More recently, it launched Sherwood Media, a financial publication targeting the same audience.
While starting with the stock market, Xu hopes AfterHour will move into other areas of finance in the future and become a one-stop-shop for retail investors in the future.
“AfterHour should be there,” Shaw said. “I see the Internet of finance and how it is evolving, and I am disappointed in all the other attempts [to build a similar platform]. They were just disappointing.
I’m really thinking long term. I want it to be fun and accessible. I think it’s funnier than sports, and I think more and more people online are doing it too.