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Covestor LLC first came to my attention last fall, when Union Square Ventures co-founder Fred Wilson mentioned on his tumblelog how he'd been using a widget (pictured) developed by the portfolio sharing service to keep track of how his public stock portfolio is doing ("not well," he confesses). Now it turns out Wilson is backing the startup, which is announcing on Monday that it has secured a $6.5 million Series A round co-led by USV and Spark Capital and with participation from Europe's Amadeus Capital Partners.

USV's newest partner, Albert Wenger, a serial entrepreneur who was president of del.icio.us when the social bookmarking site was acquired by Yahoo! Inc. for $30 million in 2005, is joining Covestor's board. Spark co-founder Todd Dagres is also joining the board.

Blogs Wenger on USV's Web site:

One might ask why anybody would want to share their great investment ideas with the world in the form of a detailed track record. Probably some are doing it simply as a competitive sport. Many participate because Covestor offers a vibrant community of active investors who learn from each other. Others, however, do it because they realize the value of an established and verifiable track record. For now they would have to "monetize" this track record elsewhere in the same way that great coders don't get paid for their contributions to open source projects, but the recognition of the community can translate into a promotion or a paid speaking engagement or book contract.

Wenger predicts that Covestor will level the investment playing field, enabling individual investors to compete directly with money management firms. "We are convinced that opening up the asset management market to talented individuals will be as fundamentally disruptive to this huge industry as blogging has been for journalism (what would Mike Arrington's or Om Malik's influence be if they were working for the San Jose Mercury News?)."

I just hope that doesn't mean that some Sunday in the future I'll have to read a New York Times story about the unhealthy lifestyles of online asset managers.  -- Mary Kathleen Flynn

See October 2007 post from Tech Confidential
See Fred Wilson's tumbelog
See March 12 post on from Tech Confidential
See April 6 story from The New York Times

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