Landing a $9 million round of funding is no small feat in and of itself. Naperville native Brian Barnes did it while his startup was still in stealth mode.
Barnes’ company, M1 Finance, is the maker of an automated investment tool that lets users put their money to work in a balanced portfolio without the hassle of actually managing it.
Upon setting up an account for the first time, users can decide how they want their money allocated, or they can choose a pre-designed balanced portfolio. When the user makes new deposits and withdrawals, M1 will automatically adjust their investments to ensure that the portfolio stays balanced.
In an interview with Crain’s, Barnes said he came up with the idea because of the challenges he faced in managing his own finances. Hiring a professional money manager is expensive, he said, but manually maintaining a balanced portfolio is too much work for most people.
The startup’s target audience is millennials with $10,000 or more in savings who are interested in getting more involved with their finances. M1 charges a 0.35 percent annual fee, with unlimited trades, deposits and withdrawals included.
With the option to build out one's own portfolio and relatively low fees, M1 is carving out a niche between passive investment products a la Vanguard and actively playing the markets.
Founded in 2015, the company officially announced its debut at the FinovateFall 2016 fintech conference in New York City on Friday. According to the conference’s website, the company currently has 17 employees.
Image via M1 Finance.
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