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



iTunes, Google Play, Stitcher, Soundcloud, How to Subscribe

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