State Resources Propel BackEnd Benchmarking’s Quest for Transparency in Robo-Advising Industry
BackEnd Benchmarking is quickly becoming a global leader in investment analytics and transparency. Its President and Founder Ken Schapiro is pictured here.
TRENTON, N.J. (March 1, 2018) – With the robo-advising industry surpassing $200 billion worldwide, Bridgewater-based BackEnd Benchmarking is quickly becoming a global leader in investment analytics and transparency. At the same time, the company remains grounded in its local community, nurturing the next generation of entrepreneurs by hiring New Jersey-educated employees, and benefiting from resources available to the Garden State’s technology community.
BackEnd Benchmarking’s President and Founder Ken Schapiro created the company to provide a research tool to help investors make informed decisions when considering investing in a robo-advisor. To that end, he pumped close to $500,000 of his own dollars into investments handled by several of the largest robo-advising products, including offerings from TD Ameritrade, Charles Schwab Corporation, Fidelity, Betterment, and others. This enabled his company to use its proprietary software platform to aggregate data and analyze various aspects of the investments, such as equity positions and fixed income. BackEnd Benchmarking tracks these investments and publishes “The Robo Report™,” which monitors the largest and most well-known robo- advisors, with the goal of providing transparency via quarterly analysis of robo-advisor performance, portfolios and news.
In 2017, BackEnd Benchmarking received $470,000 in funding from investors who participated in the State’s Angel Investor Tax Credit Program. Administered by the New Jersey Economic Development Authority (EDA) and the New Jersey Division of Taxation, the Program offers a 10 percent refundable tax credit against New Jersey corporation business or gross income tax for qualified investments in an emerging technology business with a physical presence in New Jersey and that conducts research, manufacturing, or technology commercialization in the state. The EDA approved 256 Angel Investor Tax Credit applications in 2017, representing the injection of a total of $111 million of private capital into 39 different technology and life sciences companies throughout the Garden State. Since the program began in 2013, the EDA has approved 929 applications for investments in 65 New Jersey-based technology businesses totaling more than $332 million.
“The Angel Investor Tax Credit Program is a great extra incentive to invest in our company,” Schapiro said. “Of course, there are a lot of other criteria on which our investors base their decisions on where to deploy capital, but when they look for funding, every extra incentive helps.”
Shapiro added that, for investors that are local to New Jersey, the program helps emphasize that they are investing in their community and helping to create jobs and a robust economy where they live. Schapiro is also president of Condor Capital Wealth Management, an investment advisor from which BackEnd Benchmarking spun out in 2016. Condor, which has been in central New Jersey for three decades, was recognized in the 2017 Barron’s Top Advisor List and was recently named one of NJBIZ’s Best Places to Work in New Jersey. Its offices are in a former school renovated by Schapiro. Both Condor Capital Wealth Management and BackEnd Benchmarking are committed to fostering entrepreneurship in the State and routinely offer internships and full-time employment to Rutgers University students and graduates.
“The State’s proximity and accessibility to New York City’s financial markets and its highly-educated workforce make New Jersey an ideal location for financial technology companies,” said EDA Chief Executive Officer Tim Sullivan. “The Angel Investor Tax Credit Program and other resources are helping early-stage companies like BackEnd Benchmarking flourish in the Garden State.”
@NJEDATech asked Schapiro about his experience in New Jersey and his company’s plans for the future:
Why did you decide to grow BackEnd Benchmarking in New Jersey? Having spent 30 years growing multiple successful businesses here, I can leverage my existing resources to help get BackEnd Benchmarking and The Robo ReportTM off the ground. Also, when considering the best use of raised capital, I would rather rent affordable office space and hire more software developers than pay astronomical rents in a place like New York City and have a less robust team. This affordability also benefits employees, who can focus more on building a great product if they are not under the stress of high living costs or long commutes. Schools like Rutgers and Stevens Institute of Technology also have robust programs that are educating young people with the skills I need to build out our businesses. Proximity to New York City, access to young talent, and affordability are just a few reasons New Jersey makes a lot of sense for us.
What do you consider BackEnd Benchmarking’s biggest success to date? Our work and research were featured in a cover story in Barron’s Magazine in July, which really validated what we are doing to bring transparency to robo-advisors. The day the story came out was invigorating for the team and gave us a lot of energy to continue with our mission. The success we have in helping our users and readers make more informed and better decisions with their money is more important than press coverage to us, but when Barron’s called our research “groundbreaking” in a cover story, it helped us to step back and look at how far we have come.
What’s on the horizon for BackEnd Benchmarking? The robo-advice industry is just the first area of finance to which we are bringing transparency. We are building a digital personal investments and finance tool that is going to bring the underlying concept of The Robo ReportTM across the investment services landscape. Our goal is to bring transparency to all corners of the financial services industry, while guiding and empowering our users to make informed, quality decisions about their finances, service providers, and products. We will be seeking additional funding in the third and fourth quarters of this year to help us take the next steps in our mission.
The EDA offers a multitude of resources to help technology grow and thrive. To learn about these resources, visit https://www.njeda.gov/tls.