Here’s how it all started.
After a successful career as the co-founder of VC firm Benchmark Capital, Wealthfront co-founder Andy Rachleff kicked back into a relaxed retirement*.
Teaching technology entrepreneurship courses at Stanford Graduate School of Business.
Partnering with his wife and the Damon Runyon Cancer Research Foundation to fund novel cancer research projects.
Sitting on the University of Pennsylvania Board of Trustees, his alma mater, where he was Vice Chairman of the university’s endowment investment committee.
At Stanford, entrepreneurs and students alike came to him for investing advice. But he often couldn’t recommend the services he used because the minimums were too high — especially for students.
He saw a need to democratize access to sophisticated investment products.
Meanwhile at U Penn, Andy found that even the best-managed endowments in the world relied on spreadsheets, outdated tools, and manual calculations. It turned out that even high-end investors needed an upgrade.
Andy’s tech expertise led to a breakthrough notion:
Software could make investing easier and better for more people.
Meet Dan Carroll.
Around this time, Dan Carroll was visiting his parents outside Chicago. They’d been hit hard by the financial crisis of 2008, and Dan, a former trader, was helping them assess the damage. He opened a statement from their financial advisor and was horrified.
He knew the deal — financial advisors make 90% of their revenue from the top 20% of their clients.
People like his parents didn’t get the attention they deserved — that they paid for.
It was clear to him most people didn’t have access to good financial advice.
And he decided to do something about it.
So he started tinkering with a few solutions. He eventually built a prototype that got some traction, and even got the attention of a lecturer at Stanford.
That’s when Andy called Dan.
But no, this isn’t the point in the story when Wealthfront was born. Dan thought VCs were [bleep], so he didn’t call back. He wasn’t about to sell out.
He was on a mission to do good.
Andy persisted, however, and eventually tracked Dan down. He explained that he’d already had a wildly successful career, so he wasn’t in it for greed. He simply wanted more people to have the same investing advantages that he had.
The two realized they not only shared a mission — to help democratize access to sophisticated financial advice — they agreed that software could unlock great investing for everyone. So they gathered some of the best technical minds they knew.
That was the day Wealthfront was formed.