$130M Raised Wealthfront Crosses 100,000 Investors, $4.4B in AUM with CEO Andy Rachleff

andy-rachleff

In Episode #498, Nathan interviews Andy Rachleff, president and CEO of Wealthfront. He served as a member of the board of trustees and vice chairman of the Endowment Investment Committee for the University of Pennsylvania and as a member of the faculty for Stanford Graduate School of Business where he teaches a course on Technology Entrepreneurship. Prior to Wealthfront, Andy co-founded and was a general partner of Benchmark Capital, where he was responsible for investing in a number of successful companies. He has also spent 10 years as a general partner for Merrill, Pickard, Anderson & Eyre (MPAE). Andy earned his BS from The University of Pennsylvania and received his MBA from Stanford Graduate School of Business.

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Famous Five:

  • Favorite Book? – The Innovator’s Dilemma
  • What CEO do you follow? – N/A
  • Favorite online tool? — N/A
  • Do you get 8 hours of sleep?— No
  • If you could let your 20-year old self, know one thing, what would it be? – “Associating myself with great people”

Time Stamped Show Notes:

  • 01:41 – Nathan introduces Andy to the show
  • 03:03 – Andy is retired from his venture capital business and he wants to give back
  • 04:07 – David Swensen has been an investor for Andy’s two venture capital firms
  • 04:37 – The way Wealthfront generates investments is the same method David Swensen uses
  • 05:09 – Wealthfront manages a diversified portfolio of low-cost index funds on behalf of their clients
    • 05:20 – Minimum is $500 to open an account
  • 05:55 – “If you like Vanguard, you’re going to love Wealthfront
    • 06:00 – Wealthfront minimizes taxes by using a software program that Vanguard doesn’t offer
  • 07:59 – The software works 24/7 so you can monitor your losses daily
  • 08:36 – Wealthfront has been managing around $4.4B in assets
  • 08:53 – Wealthfront’s asset management worth is much smaller than Vanguard’s
  • 09:25 – “With every new technology that succeeds, it gets adopted at a faster rate”
    • 09:47 – Automated Investment Services has been adapted at a faster rate than ETF
    • 10:09 – Automated Investment Services are actually managing more assets than ETF
  • 10:21 – Volume of individual metrics
  • 10:54 – Wealthfront manages the first $10,000 for free and charges a quarter of a percent on an amount excessing $10,000
    • 11:10 – Dropbox is a sample model
  • 12:00 – “It is more of the client’s satisfaction of our service”
  • 12:25 – Percentage of sent invites by users
  • 13:01 – The number of people actually invested in Wealthfront
  • 13:51 – Average MRR
  • 14:04 – Overtime, Wealthfront will introduce new services
  • 14:51 – Wealthfront is a hybrid of old and new channels in software
    • 15:28 – “We want to build services that benefit our clients”
  • 16:03 – Wealthfront was launched in Dec. 2011
  • 16:12 – Team size is about 140
  • 16:15 – Total capital raised is $130M
  • 17:15 – “I’m willing to sacrifice some growth for a far more sustainable model”
  • 17:55 – Connect with Andy through his email and Twitter
  • 16:10 – The Famous Five

3 Key Points:

  1. With every new technology that succeeds, it gets adopted at a faster rate.
  2. Sometimes, it is wise to sacrifice some growth for a far more sustainable model.
  3. Associate yourself with great people and learn from them.

Resources Mentioned:

  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Drip – Nathan uses Drip’s email automation platform and visual campaign builder to build his sales funnel
  • Toptal– Nathan found his development team using Toptal for his new business Send Later. He was able to keep 100% equity and didn’t have to hire a co-founder due to the quality of Toptal
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens and follow-up with email sequences
  • Andy@Wealthfront.com – Andy’s email address
  • @Arachleff – Andy’s Twitter handle
  • Show Notes provided by Mallard Creatives