SaaS Interviews with CEOs, Startups, Founders

EP 498: $130M Raised Wealthfront Crosses 100,000 Investors, $4.4B in AUM with CEO Andy Rachleff

Dec 4, 2016

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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 course on Technology Entrepreneurship. Prior to Wealthfront, Andy co-founded and was general partner of Benchmark Capital, where he was responsible for investing number of successful companies. He has also spent 10 years as a general partner for Merrill, Pickard, Anderson & Eyre - MPAE. Andy earned his S from University of Pennsylvania and his MBA from Stanford Graduate School of Business.

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 for his Venture Capital business so he wants to give back
04:07 – David Swensen has been an investor on Andy's 2 venture capital firms
04:37 – The way Wealthfront generates investment mix is the same method David Swensen uses
05:09 - Wealthfront manages a diversified of portfolio of low-cost index funds in behalf of their client
- 05:20 – Minimum is $ 500 to open an account
05:55 – "If you like Vanguard, you're going to love Wealthfront"
- 06:00 – Wealthfront can minimize taxes using a software that Vanguard can't do
07:59 – Software works 24/7 so you can monitor your losses daily
08:36 – Wealthfront has been managing around $ 4.4B assets
08:53 – Wealthfront's asset management worth is much smaller than Vanguard
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 a amount managed excessing $ 10,000
- 11:10 – Sample model is Dropbox
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 model and also new channels in the 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:

With every new technology that succeeds, it gets adopted at a faster rate.
Sacrifice some growth for a far more sustainable model.
Associate yourself with great people.

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