Quantopian is in the process of launching a crowd-sourced hedge fund where we pay algorithm authors a share of the returns their algo generates on an ongoing basis.
We start with the same basic scoring criteria from the Open paper trading competition and then dig deeper into algorithm performance using the tear-sheet analysis that Justin shared recently (e.g. stress testing, risk exposures, turnover). We are already working with the first cohort of algos that we will allocate capital to, but we're also investing into the research process of identifying algorithms that will most likely show stable, profitable out of sample performance.
You can find more detail on what we're looking for (and not looking for) in this webinar I gave a few weeks back talking about our process for selecting algorithms for the fund.
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