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SumZero is an investment community that that caters to professional investors (collectively referred to as the “buyside”). Since its inception in 2008, SumZero has grown to become the largest online social network for hedge fund, mutual fund, and private equity professionals with nearly every well-known fund represented in the user base.

About
Co-founder and current CEO Divya Narendra conceptualized SumZero in April of 2007 while working for the hedge fund, Sowood Capital, in Boston. Narendra and college friend Aalap Mahadevia subsequently launched SumZero in March 2008.

As Narendra puts it, "SumZero was initially inspired by a need for a simple, centralized, and searchable platform in which professional investors working at hedge funds, mutual funds, and private equity funds could share rigorous investment ideas and network with one another. Since then the concept has expanded and SumZero is taking steps to bring a subset of high-level investment research to the investing community at large."

Membership
SumZero Buyside members must apply to gain access. Roughly 75%-90% of applicants to the site are rejected. In order to qualify, applicants must be on the research team at a hedge fund, mutual fund, private equity fund, or investment banking proprietary trading desk. By contributing just one idea, a buyside professional can gain access to all the investment ideas contributed by the SumZero buyside community for six months. By sharing research, members naturally build a track record, essential to securing future jobs and potentially launching their own funds.

The SumZero Buyside community includes many notable members such as Mohnish Pabrai, Jim Pallotta, Lisa Rapuano, Ken Shuben Stein, and Whitney Tilson. Members Ryan Fusaro, Manuel Stotz, and Matthew Peltz of the SumZero Community were recently listed in Forbes "30 Under 30”. Member and activist investor Ryan Morris was profiled in BusinessWeek.

Reciprocity and networking
By virtue of posting one investment recommendation, a SumZero member gains access to all of the other ideas posted by community members for a period of six months. Members are able to gain feedback from each other, and as a natural byproduct, build their professional networks.

The Research database contains write-ups with an average length of 1500-2000 words each. Members can also access a separate Experts Database, which contains thousands of companies linked to individual members.

Credibility and career ramifications
SumZero members have the option to rate each others ideas and their predictions are tracked overtime on their profiles. This gives the members an incentive to post credible and thoroughly researched ideas. Members can leverage their community ranking to further professional opportunities, find jobs, and raise capital.

Academic Research
Authored by Wesley Gray of Drexel University, Bryan Johnson of Creighton University, and Rice University’s Steven Crawford and Richard A. Price III, the paper “Do Buy-Side Recommendations Have Investment Value?” analyzes a subset of SumZero’s ideas database, which is composed of 2,135 long and short calls on U.S. equity securities submitted to the website by 1,112 buy-side analysts from 910 different funds.

This study shows that short recommendations from these analysts generate an immediate and significant decline in price, and long recommendations have positive short-term returns and exhibit a positive drift. The collective evidence presented in the paper suggests that buy-side recommendations have investment value. The paper also documents that broad institutional ownership decreases significantly for buy-side recommendations, but increases for the buy-side analysts’ employers, suggesting there is a wealth transfer between the broader institutional market and buy-side firms in our sample.

Compliance
Link to Compliance FAQ.

SumZero Offerings for Non-Buyside Investors
As of 2012, SumZero began offering limited access to its research to individual investors, through SumZero Basic, SumZero Quarterly Top Idea (“QTI”), and SumZero Elite.

SumZero Basic
SumZero Basic offers free access to SumZero Headlines, special events, along with short synopses of recommendations submitted in the SumZero Buyside community.

SumZero QTI
The Quarterly Top Idea (QTI) is an entry-level paid research product. It allows anyone the opportunity to access four top-ranked ideas from the SumZero Buyside community, delivered once per quarter. Unlike SumZero Basic, QTI features full research reports and not synopses.

SumZero Elite
Elite membership offers two investment ideas each month, live discussions with SumZero hedge fund managers, on-going coverage and analysis, and various other non-correlated opportunities.

SumZero in the Media
SumZero has been featured in The Wall Street Journal, CNN, CNBC, Bloomberg Television, Fox Business , Business Insider, Benzinga, Yahoo! Daily Ticker on several occasions.

In June 2012, Winklevoss Capital invested $1.05 million into SumZero. This angel investment was covered by The Wall Street Journal, NPR Marketplace , ABC News and Huffington Post among other media. The SumZero team also made an appearance on CNN with Soledad O'Brian.



Whitney Tilson and CEO Narendra appeared on CNBC to talk about the first Annual Investing Challenge, jointly organized by SumZero and Value Investing Congress in October 2012. The Challenge was covered by several news channels and business publications including Business Insider and Benzinga .The top 3 ideas were pitched on CNBC's Fast Money and the winner Ryan Fusaro presented his investment idea at the Value Investing Congress on October 1, 2012 alongside prominent portfolio managers such as Bill Ackman, David Einhorn and Barry Rosentein.

RAI News recently featured CEO Narendra's speech in the University of Rome in November 2012.