>They haven’t “won” anything yet...a high private unicorn valuation doesn’t mean success.

We could debate what "success" means endlessly, but if you're a VC, your job is to put money in companies with low valuations that will eventually end up with high valuations.

I think the idea is that, since RH hasn't been acquired or gone public, they haven't yet "ended up" with a high valuation. It could all go away before the investors can get liquid (e.g., Theranos for a pathological example).

There are deep secondary markets around late-stage venture-backed companies. Robinhood investors seeking to exit around this valuation have options.

Just to clarify, we're debating whether Robinhood is a success and the measure of success being used is "can early investors cash out for a gain?"

What if every company checked that box and couldn't provide lasting value beyond that? Do we still consider this a success because we're posting on a forum run by a VC?

> What if every company checked that box and couldn't provide lasting value beyond that?

How long do you think that would be a sustainable situation? A high mid to late-private stage valuation is only supported by the promise of subsequent valuations.

If every company stopped achieving those subsequent valuations, it would feed back into the private valuations.

> What if every company checked that box and couldn't provide lasting value beyond that?

That would mean an overheated late-stage market. (Which recent IPO data haven’t yet made obvious is a thing.)

Ignoring any one specific company for a moment, an investor consistently able to invest early and time their exits near the peak of each company's valuation would be a roaring success.

That's my point. We're saying that Robinhood is a success as a company because an early investor would have had a nice exit? Thats our "success" barometer?

I'm going to call BS on that one.

Success generally means a future liquidity event...an IPO with a sustained share price well above what you bought in for or a sale.

* Your job is to put money in companies with low valuations, that you will eventually be able to exit at a high valuation.

It's all rainbows and unicorns, until someone hands you cash and you manage to exit your private, illiquid investment.

A valuation is defined as an estimation of value. It's not a guarantee, it's not a sale contract, but does that make it rainbows and unicorns? Well, about as much as any other estimation around a highly complex and mostly unique construct, I would say.

It's certainly the first step towards a possible sale.

The dimensions of preferences and signalling contort the actual valuation.

Remember that 409A valuations are generally drastically below preferred price. I'd be much more inclined to discuss startup valuations in the terms of 409A valuations.

I think your job is to put money in companies with low valuations that EXIT with high valuations. Your investors won't give a crap if you do a good job of finding unicorns that eventually fissle out.

Hey dawhizkid - co-founder of Plaid here. I can't give the rationale on why RH wrote the privacy policy the way they did, but I can guarantee you that they are not pulling transactional data. They're only using Plaid for the ACH authentication. If you'd like more insight feel free to shoot me a note at william at plaid dot com.

Plaid provides account aggregation features so it definitely do access your transaction history. Is your issue with Robinhood collecting this data or Plaid.. or is the issue with sharing your transaction history.

What do other people think about sharing this type of information?

I think it's really obvious what people think, the question is whether people know or not. I think it's pretty obvious this should be considered criminal theft. This is like if you hire guys to sweep and dust the shelfs in your bank vault and you walk in on them taking pictures and writing down every single item on a ledger. All across the country. Not that you should hire people to clean your bank vault. This should be extremely illegal. We just really need more congressmen who know what an email address is.

I'm talking about giving consent and actively sharing the data. Look up PSD2 in Europe.

No, you can't have my bank account transaction history. I am speaking on behalf of every human being on the planet not employed at Plaid. Why is this a question?

I looked it up - I'm sure the regulation is massive so not going to read through it entirely, but that looks terrifying. Great time to buy a plot of land somewhere not covered by google maps and start burying gold. I can't really imagine a product that would I would use on top of that and I'm kind of curious who exactly lobbied for that legislation.

When you go for a mortgage you have to share your transaction history with the bank you apply to. You may apply to multiple banks and you may use a broker who you would also have to share that information with.

I think people would share that information if they could get some benefit from it.

Mortgages are not a remotely valid analogy here unless, in the case of Robinhood, you try to compare it with margin accounts, which I think is actually a fair analogy but is not the case here. And even then, the bank does not steal your transaction history without your awareness or consent, as is the case here.

When I open up a checking account, all I need is my license and my SSN and $1000. They don't need the transaction history from every other checking account I have because they are not assuming any liability or risk. Such is the case with the average Robinhood customer, ergo, they should not steal the customer's transaction history from their bank. This should honestly be prosecuted.

I don't mean to be rude, but I think you have to be either high, really dumb, or a robinhood stakeholder to think that people would want this or that it would be a good idea. I would suggest moving to China if you think it's a good idea - I'm sure you will be able to get great discounts on a lot of things if your transaction history is conducive to the greater good in the near future.

except they already took a large secondary offering they keep if the company fizzles out

"Yesterday we discussed how Robinhood had raised $363 million in new funding at a $5.6 billion post-money valuation. All of that was primary capital, but we've since learned from multiple sources that there also was a secondary transaction whereby Robinhood's co-founders and some early employees cashed out just north of $100 million."

https://www.axios.com/newsletters/axios-pro-rata-9833c302-36...

Venmo also uses Plaid for bank connection, though I doubt their user base really cares

I did not know about Plaid until today.

https://plaid.com/solutions/transaction-data/

> Our high-functioning platform pulls up to 24 months of data directly from users’ bank accounts.

Whoa. I never agreed to anything like that. How is this legal/why would banks let a startup have this much information?

You authenticate to Plaid with your bank credentials, so it's not much different than the data you can get directly from the bank through OFX (like Quicken and other things do). Plaid just simplified it and put a better API on it.

They do? I had no idea about that.

Exactly.

You can use ACH trial deposit verification with Robinhoodas alternative to Plaid.

Missing the point. That option is hidden. Most are connecting through Plaid. Even techies on here have no clue Robindhood collects this information when you link a bank account.

I've been holding off adding a bank account till I open a new one specifically for robinhood

Create a checking account that you use only for Robinhood. You can open a free checking account online in about 5 minutes.

Thank you. Disconnecting my bank acct ASAP!

Well, secondary markets.

considering how popular it is, i think the high valuation is here to stay . Regular online brokers have, for years, been charging clients too much, with arbitrary fees, almost as a form of collusion .Robinhood breaks this cartel up, much like Uber broke up the taxi cartel.

$4.95 per trade on Schwab is “too much”? I’ll stick with my Schwab brokerage + free investor checking with unlimited international atm fee rebates over giving up my entire bank account transaction history.

What data are you citing that suggests RH is actually popular given they have released no data about trade volume? This BI story suggests they have a lot of catching up to do to justify their valuation http://www.businessinsider.com/robinhoods-new-web-platforms-...

Where do you need to give your transaction history? I have both Schwab and RH and don’t recall it ever asking for such permissions. I only have a linked checking account for ACH deposits and transfers.

You don't have to provide your transaction history, you can use an ACH trial deposit as an alternative to verification.

That’s not the point. Even techie types commenting on here (who should know better about trusting a free Fintech product) didn’t think twice about it. Most commenting on here are surprised to learn Robinhood even collects this info when you do use Plaid.

Actually, it is the point. You don't have to connect via plaid, so if you are concerned about whatever plaid collects, you can solve this concern and avoid paying 4.95 a trade and be strictly better off

No, it's not. Robinhood hides non-Plaid linking options behind a "don't see your bank?" button at the very bottom of a long list of banks that few people are even aware is an option. The point is that even smart people on here seem to have no clue that Robinhood is collecting this information when they link a bank account through Plaid because the permissions you grant are that opaque.

The point is to compare RH with other brokerages. Right? If everyone is using Plaid, then you are still better off not paying 4.95. Or, are you claiming nobody else is doing it but them ?

Nonetheless, the option exists. Meaning the data on the statement is really of no use to RH & isn't part of their business model.

There's also an option on FB not to share your wall posts with anyone. Yet you'd not infer from that that people sharing crap about their lifes on the wall is not integral to the FB's business model.

Something's wrong with your logic.

FB serves ads. Robinhood doesn't. So, it's not clear how in the world people's history would be integral to their business model. I suppose we could imagine them using it down the road to offer credit or something. But as of right now, it is a mere insinuation without a shred of evidence.

Regular online brokerages don't use Plaid to enable funding if that's what you're asking. Funding via traditional ACH methods or wires does not grant a sender or receiver access to all your transaction history.

Robinhood supports ACH

If you connected your bank account via Plaid (online banking creds), then you’ve agreed to hand over your transaction data.

Yes, the same on my end. I didnt have to authorize any of this mumbo jumbo

Did you connect via Plaid (online bank creds)? Then you’ve agreed to give RH your transaction data.

To be fair, that price used to be $18.95 per trade before the Robinhood came in and shook them a little bit.