We aren't privy to the conversations, slide packs, and agreements behind it, but the grandiose idea is that Quantopian should be able to capture $10B in capital from investors. It sounds like a really big number, but back-of-the-envelope, assume that the return to the investors is 10% or $1B per year. If Q can establish a track record, then maybe they can charge 20% of returns, so their take would be $200M. If they split the profit with the managers (the "crowd"), Q's take is $100M per year. It's a rough estimate, but the basic idea is that Q needs a story that they can get to around $100M in annual revenue (without lots of new VC funding) or the VC's will pull the plug.

The story, as I've heard it here on the forum, is digestible. Create a hedge fund that will compete with all the other familiar hedge funds, taking market share from them, by offering an alternative product to institutional investors controlling large pools of capital. This gives the VC's something substantive to plug into their due diligence spreadsheets. "Hmm...let's see. The overall hedge fund market is a gazillion dollars, of which Q will get 0.5% ramping up to 10% over 10 years. Our return on investment will be phenomenal! Let's write them another check!"

So, unless the idea for a more free-form algo marketplace is equally clear and compelling, my sense is that it'll go nowhere. Part of the problem is that in the world of finance, "investors" are professionally run legal entities with a minimum of $10M-$100M in capital, if not more. The idea of getting any one of them to put money into a new-fangled crowd-sourced hedge fund is novel. Funding an individual algo is gonna be a non-starter.

That said, it would be interesting to have some Q support for a kind of anti-hedge fund, speculative platform, at the very low end of the retail market (not investors but basically gamblers). Maybe an algo-of-the-month club? Q has 35,000+ users, so if everyone chipped in as little as $1 per month, we could fund a new $25,000 roll-the-dice algo every month. I'm in for $12 per year! Where do I sign up?

Of course, a speculative algo-of-the-month club would be a distraction, and drive algo writers to unhedged, high-beta, whacky algos, which is just what Q doesn't want for the hedge fund. So, it's a non-starter (besides, I wonder if it'd be legal, since it would be a form of online gambling, although I guess at $1 per month, it could be considered solely entertainment?).

I bet the "retail" hedge fund investor is a huge market. Think of all the lotto ticket buyers--their odds of -100% return are almost 1.0. Let them put that dollar in one of Grant's high beta quant strategies (guaranteed to beat that lotto ticket return).

Gov regulation is probably the only barrier here.

Another thought is just to send all of the profit to a charity. Algo-of-the-month profit goes to charity-of-the-month? Maybe the government regulation/legal matters just evaporate? If the profit would go to charity, I might up my contribution to $10 per month. And if all 35,000 users followed suit, that'd be $10/month x 12 months/year x 35,000 = $4.2M/year. Not bad.

1. Charity fund. You get to write off what you "would" have made had you actually invested in a for-profit fund.

2. Kickstarter t-shirt fund. $50.00 gets you a Student's t (shirt), and a copy of the algo(s) after 12 months, plus a "refund" on any profits made. Buy as many t-shirts as you like.

3. Lottery fund. Profits are used to buy lottery tickets, proceeds to be distributed proportionately.

4. Religion fund. Start a religion where donations are invested with profits going to establish retreats in remote exotic locations.

5. Fivr fund. $5.00 gets you a business card design and participation in the fund.

6. Uber fund. 10% of every ride gets entered into the fund, profits being used to pay Uber's legal fees.

7. Taylor Swift fund. She sings you a song, takes your strategy, pays you nothing and copyrights your algo.

8. Snowden fund. You join the team and then publicly expose all the algos' logic claiming that the fund was secretly profiting on global tracking of voice recognition of the phrase "vampire squid".

9. Trump fund. You pay into the fund in the hopes of making a profit on the publicity of converting Donald Trump into a human being.

10. Market Tech fund. You pay into my fund. That's it. You just pay into my fund. No questions asked.