Startups battle for $50,000 and killer buzz

Betterment
Founder: Jon Stein
Launched: August 2008
Headquarters: New York City
Winner of "Biggest New York Disruptor" award; Final Five finalist

Betterment's name sounds like a sly play on Mint.com, the personal-finance site that won TechCrunch's very first startup competition back in 2007 and went on to be acquired last year by Inuit for $170 million. Like its namesake, Betterment is built around user-friendly personal finance tools, but while Mint helps members manage the money they already have, Betterment targets investors.

For those that would be overwhelmed by an ETrade account, Betterment offers visually intuitive tools. After transferring money in from a linked checking account, a user funnels it into one of Betterment's two portfolios, one a stock mix and the other a very conservative basket of bonds. Using a slider that looks like a speedometer, the investor can easily calibrate their risk level. Betterment founder Jon Stein calls his site "the replacement for your savings account."

One cool feature allows users to see what others in their age and or income bracket are doing. The judges were favorably impressed: "I was a judge at TC50 when Mint was on stage and told them, 'It's a huge market; you only need a tiny piece.' I think that's true for you," Don Dodge, a developer advocate at Google, told Stein. He'd like to see Betterment target 401(k) investors: "Many of them are totally clueless," he said.

Betterment polarized the audience. Some loved how simple the site makes it to allocate investment funds (the slider lets you set your risk tolerance from low to high risk), but others objected to an investment site billing itself as a safe replacement for savings accounts.

The Final Five judges came down hard on Betterment's interface. John Borthwick, CEO of betaworks, called it "toyish" and felt that it was over-simplified, "reducing things to a simple graphic with one bar."

Of course, simplicity can pay off -- TechCrunch editor Michael Arrington pointed out that Mint also drew criticism for being "too cute."

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