Cake Financial launched in 2007 as a "social network for investing." Users could link their brokerage accounts, share their portfolios, see what successful investors were doing, and copy their trades. The concept was: make investing transparent and social. The company raised several million in venture funding.
Company Data
- Founded: 2007 — Steven Carpenter
- Failed: 2010 (acquired by E*TRADE, shut down)
The fatal flaw: people are extremely private about their finances. The Venn diagram of "people willing to share their investment portfolio publicly" and "people whose investment portfolio others want to copy" was essentially two circles that never touched. E*TRADE acquired Cake Financial in 2010 and quickly shut it down, having bought the team more than the product.
Key Lesson
Social features don't work for every domain. Finance is inherently private—people don't want to broadcast their net worth, mistakes, or strategies. Some things shouldn't be social.