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Hedge
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=== Expansion Plans & Other Key Differentiators === Designing a large-scale, full-service investing business also eliminates many of the common challenges that retail brokerage platforms face, bolsters retention, and dramatically reduces the risk of natural churn. By reducing the risk of natural churn we mean the following: Right now, retail brokerage platforms that cater to self-directed retail traders have a natural churn (the age at which they typically lose a user) at around 31 or 32, when their average user transitions into managed investments, either as a result of their lives becoming busier, or as any number of factors (ie. age, responsibility, financial stability) lead to a lower tolerance for risk in their investments. While it may vary as to exactly when a user makes this shift from self-directed to managed or passive investments, it is a near inevitability in the lifecycle of an investor that causes retail brokerage platforms to bleed customers and have a constant need to acquire new users. By forfeiting their hold on investors just as many of them first start to have enough assets to charge investing service fees for, retail brokerage platforms have cornered themselves into a vicious cycle that confines them, for the most part, to the period of an investor’s life when they have the least amount of capital. This makes each user much less monetizable through traditional channels and creates a significant need for platforms to prioritize volume in order to generate revenue, without much of an incentive to help the traders that they will ultimately lose. The longer they can keep them gambling, the more revenue they can squeeze out of them. Hedge is entirely different in that we make an investment in our users and target a monetization route that is much longer term, has significantly more upside, and aligns our incentives with our customer base. This is not to say that we can’t generate significant revenue without expansion – but rather that our ideal customer is not one that will trade 50x a day no matter whether they win or lose. Our ideal customer is someone who we can grow with. Learning resources, group investing, risk assessments, and countless resources & features of Hedge exist to support users and are more likely to cut volume, than to increase it; but they’ll also help investors make better decisions, improve their financial literacy, and grow their portfolios – and with that, our AUM. We look forward to continuing to be transparent on our business model as we move forward, and to our users keeping us honest and on track so we can all grow together. Hedge’s expansion plans and its route to additional monetization routes along with them will open it up to tens, if not hundreds, of billions of dollars in added potential ARR.
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