Daniel Aisen
Oct 1 · 4 min read

This past quarter was our first time having a complete team with all of the skills necessary to get us to launch. Additionally, Allison, Prerak, Beau, and I spent the summer living together in San Francisco. We participated in a startup accelerator called Y Combinator which culminated in their Demo Day, at which we pitched our plans at Proof to several hundred Silicon Valley investors.

We’re now back in NY, and the majority of the team will be heads down for the foreseeable future as we build out our technology platform. In addition to spending a significant amount of our time on the product, Allison and I will of course continue to engage with potential customers as their feedback will be increasingly critical as we get closer to launch.

Major updates

Goals from our previous update

  • Greater focus on product ideation and design

(5/10) We spent a good deal of time brainstorming the eventual product and thinking about the appropriate execution quality metrics for measuring and optimizing for success, but we still have a long way to go.

  • Continued focus on buy side engagement, successful launch of an order analysis tool

(8/10) We met with about 15 new buy-side firms over the course of the summer, exclusively through word of mouth/introductions from other folks in our network. Considering that we’re not trying to cast a wide net with new relationships until we have a refined customer pitch and a lot more to show on the product/data front, we’re very encouraged by the amount of preliminary interest so far. Our ask is still very light, though: “here are our plans, and this is how we’re thinking about designing and optimizing our algos; would you be willing to be a sounding board and provide feedback going forward?” We did successfully launch our Find My Fills tool, which turned out wonderfully, although to be honest it didn’t particularly resonate with our target customer base (buy-side traders). It’s just too granular, whereas most traders care more about more higher level things like aggregate performance metrics, stock screening, portfolio optimization, etc. We also released our stock market primer which has been received very well.

  • Experiment with potential technology stacks and start formulating our overall technology plan

(7/10) Beau and Prerak put together a comprehensive roadmap of all the technology work necessary to get to launch. They also assembled a logical architectural design of what will likely be the initial version of the system. They conducted some preliminary testing of potential cloud providers, but we have not yet committed to a particular provider (nor have we yet committed to running the trading system in the cloud).

  • Engage regulatory consultant and begin B/D filing

(10/10) We have engaged Regulatory Ridge, whom we previously worked with at IEX, and kicked off this process.

  • Identify top three candidate clearing partners

(2/10) We do have a short list of the most promising potential clearing partners, but we did not make progress on this front during these past three months.

Goals for the next 3 months

  • Build a robust research environment with production-grade historical market data capabilities, and make significant progress toward identifying an appropriate combination of execution quality metrics by which to optimize our trading strategies.
  • Implement core system frameworks. Design and develop foundational components of the platform, such as high-performance messaging middleware and UX frameworks.
  • Select vendor(s) for real-time and historical market data.
  • Begin development of business components such as the Client FIX Gateways, the Market Data Service, and the Order Management System.
  • Develop an automated system integration test process that can become part of the CI/CD process.
  • Make significant progress toward obtaining broker-dealer license (e.g. file Form NMA).
  • Identify top three candidate clearing partners.
  • Initiate conversations with at least 5–10 major EMS providers.
  • Continued focus on buy side engagement and producing content.

Progress Summary

Here are our full updates across the board:

Technology

  • Established a technology roadmap leading to launch.
  • Created the preliminary system architecture for a distributed, resilient, flexible, and performant cloud-based trading platform.
  • Initiated the selection process across vendor products and open-source solutions for components such as FIX engines and real-time market data.

Regulatory

  • We engaged our regulatory consultant Regulatory Ridge (Shannon Fitzgerald), whom we’ve known for years and have had a wonderful experience working with in the past. Shannon will be spearheading our broker-dealer application process, which is already underway.

Product/Research

  • We launched our Find My Fills order analysis tool.
  • Began evaluation of hosted platforms for historical tick data analysis and research.

Sales

  • We met with portfolio managers and traders at about 15 firms that we didn’t previously know, and we continue to stay in touch with the rest of our network.
  • We wrote an in-depth market structure primer.
  • At YC’s recommendation, we solicited and obtained non-binding letters of intent from 6 potential customers.

Operations

  • We moved into a temporary office space in the Flatiron district in Manhattan.
  • Han redesigned our logo and website.

Now that the technology build and regulatory efforts are underway, things are starting to feel very real. The sheer volume of work in front of us is certainly intimidating, but we have a ton of confidence in the team. Thank you to everyone for your continued support and encouragement!


Proof

Proof is a new institutional equities broker. Launching in 2020.

Daniel Aisen

Written by

Proof

Proof

Proof is a new institutional equities broker. Launching in 2020.

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