when my co-founder and i started EvenEach of us is committed to putting 80% of our liquid net worth into the investment platform we were building.
This made sense as we initially built the product for ourselves. We knew which investment strategies would give the best return on our savings, but without $100 million to manage the money at the bank and family office, it was impossible to take advantage of these strategies.
We also learned early on that the major banks and private wealth advisors really didn’t have much to offer when it came to large alternative investments. They all had the same big brand name, but they didn’t give a performance to support it.
Our current target customers are “accredited investors,” representing approximately 10% of households in the US. These investors also represent 100% of the institutional and angel investors we went out to raise our seed round earlier this year.
As our future business partners also fit our target customer demographic, we asked ourselves: What if we needed our investors to place the same bets on our product that we did?
We were inspired by Vanguard, which pioneered the collective ownership model to drive low costs for its funds. They opted to raise funds from their clients to be owned by their founders, employees and customers, rather than taking capital from passive investors.
Vanguard successfully aligns incentives between our shareholders and customers, and we decided to do the same. Our “Client Pledge” is a commitment to invest personal capital on the platform now or within the next two years.
Our $10 million seed round closed with hundreds of investors on the cap table. More than 100 angel investors took our client pledges, along with funds such as Foundation Capital, Hustle Fund, Montage Ventures, F7 Ventures, Gingels, and Calum Ventures.
While we could have closed the round with a fraction of these many investors, we decided to take smaller checks from as many people as possible to gather as much feedback and input as possible. We have also reserved 25% of our fundraising for under-represented groups in VC, so that the input is diverse and varied.
Paid it. Our shareholders showed an unparalleled level of engagement. They’ve gone through the onboarding experience, they’ve used our product dashboard, they’ve received our marketing emails, and they’ve interacted with our customer support.
Because they are technology leaders – and many have already built or run successful companies of their own – their feedback has been more invaluable than I anticipated. Not only can they identify and articulate issues clearly, but they can also use their expertise to actively brainstorm and solve problems.