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

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