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How Wealthsimple raised $2M in 2 weeks

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How Wealthsimple raised a $2M seed round in 2 weeks. Presentation from the Mobile Learning Lab hosted by Ward Technology Solutions.

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@mkatchen @getwealthsimple How Wealthsimple raised $2MM in 2 weeks
About me - Wealthsimple - Ancestry.com - 1000memories - McKinsey Mike Katchen, @mkatchen
In May, we raised a $2MM seed round. It took us 2.5 weeks to raise from 15 investors. Here are a few tips based on what I think we did right.
Table stakes for seed rounds: 1. Good idea (in a massive market) 2. Killer team
Investors follow the herd. They care more about who else is investing than what you do as a company. Don’t go broad until you have your lead lined up. Tip #1: Find your lead investor early. How investors make decisions 50% 45% 5% Business plan Team Other investors
Tip #1: Find your lead investor early. - Former CEO, Assante - Founder, Synergy & GT Global -“Person of Influence of the Decade” Joe Canavan
Tip #2: Your angel investors don’t have to be in tech. Active angels in Canada Wealthy people that want to invest in tech x 10x Don’t limit your search to active tech angels. Think more broadly about who would support your company.
Tip #2: Your angel investors don’t have to be in tech. Think broadly about your ideal investors. “Smart money” can make a big difference. Wealthsimple investors come from… 64% 36% Tech Finance
A compelling deck is short, clear, and well designed. Tell your story in 4-5 pages: (1) what you do (2) market size (3) team (4) growth plan (5) competition Tip #3: Most decks suck - make yours good.
Smart investing made simple.
Wealthsimple is Canada’s fastest growing online investment manager. We make smart investing easy, low-cost, and transparent.
1980s Mutual funds transform the way investors save for retirement Industry transformations by decade 1990s 2000s 2010s Discount brokerage creates an easy, low cost solution for DIY investors ETFs become a credible, low-cost, liquid alternative to mutual funds Online solutions democratize access to sophisticated investment management The investment industry is transforming
Wealthsimple is Canada’s fastest growing online investment manager. We target young professionals that want a smarter and simpler way to invest their savings. We invest clients’ assets in a fully-diversified portfolio based on their risk profile. We use technology to simplify the entire investing experience, from account opening to reporting via web or mobile. We charge 35-50 bps on assets (a lot less than everyone else) and service accounts from $5,000 to millions. Our team includes tech and finance icons Prof. Eric Kirzner, Joe Canavan, Roger Martin, David Ossip, and Dan Debow. What we do WS Global Platform
The product SMART INVESTING We build clients fully-diversified portfolios tailored to their risk profile and investment goals. SIMPLE EXPERIENCE We simplify the entire experience from account opening to reporting via web or mobile. DEDICATED SUPPORTED We offer the support you need, when you want it via dedicated Wealth Concierge professionals.
The Canadian market opportunity Wealthsimple fills a massive gap in a $1.3T market Full-service ~$1T Self-directed ~$0.3T Low fees Low minimums “Light” advice High minimums High fees “Service” oriented Low fees Knowledge hurdle No advice
US CASE EXAMPLE - US market leader for online “light advice” - Added >$1B in 2014: now at almost $2B - One of several US players with >$500MM in assets Wealthfront: $0 to $1B in 2 years
• Head of Ancestry Canada • Marketing and Product, 1000memories • McKinsey & Co. financial services • “Mover of the Month” by Financial Post Michael Katchen, Founder & CEO • Co-founder, 1000memories, YC alumni • Director of Product, Ancestry, Stripe • McKinsey & Co. financial services • Rhodes Scholar Brett Huneycutt, COO Team • Co-founder, 1000memories, YC alumni • Wieden+Kennedy creative • Launched award winning campaigns for Apple, Levi’s, Focus Features Rudy Adler, Designer • Engineer, 1000memories, Ancestry • Mobile developer at AOI Pro in Tokyo • Computer Science at Colby College Peter Graham, Engineer • Director or Marketing, Conversion Media, Powered by Search • Founder, Marketers without Borders, Marketers Unbound Alex Rascanu, Marketing Director • Hacker School and HackLab.TO • Ladies Learning Code • Engineer, Virgin mobile, Konrad Group Kate Murphy, Engineer • Investment Advisor, RBC DS, shared $300MM book • Canadian Investment Manager (CIM) • President of Student Council, Huron Dave Nugent, CIO & CCO • Founder, Genius Scan, mobile scanning app with 15MM downloads and 2MM MAUs • Engineer, 1000memories, Ancestry, Amazon • MS in Computer Science Bruno Virlet, CTO (pending) • Sales assistant at Raymond James • Business Marketing at George Brown • Canadian Securities Course Candidate Kayla Wilson, Associate Wealth Concierge • First designer, Wattpad • Lead designer, Wave Accounting Huda Idress, UX Designer
Advisors • Former CEO, Assante Wealth Management • Founder, Synergy and GT Global Joe Canavan, Advisor • Former Dean, Rotman Business School • Former co-head of Monitor Company Roger Martin, Advisor • CEO, Ceridian HCM • Founder of Dayforce and Workbrain David Ossip, Advisor • Chair in Value Investing at Rotman • Author of 13 books on investment finance • Founder of the Easy Chair Portfolio Prof. Eric Kirzner, Investment Committee • SVP at Salesforce.com • Co-Founder, Rypple (acquired in 2012) Dan Debow, Advisor • Managing Partner, Impression Ventures • Managing Director, Next36 Ventures Christian Lassonde Bryan Kerdman, Advisor • Managing Partner, Impression Ventures • Former Managing Partner, Bryker Capital • President, Bionym • Former COO, Top Hat, Top Prospect Andrew D’Souza
CLIENT ACQUISITION Target market: Young professionals, 25-45 years old. Top income decile but don’t yet have the required assets to hire traditional advisors. Influencers Product Partners High quality content drives organic traffic Referral rewards encourage word of mouth (e.g., Dropbox) Focus on optimizing conversion funnel Branded and white label partnerships for small accounts Distribution partners that reach target segments: law firms, universities, etc. Not sharing at this time… sorry
Tip #4: Set a deadline. Lead Deadline Close 2 weeks Once you have a leader investor, move fast to close your round. Closing will always take longer than you expect. 1-3 weeks
• If you can afford it, investing in your own round goes a long way • Signals to investors that you are committed, aligned, and will be a responsible steward of their capital • Surprisingly few teams invest in their own rounds so it can also help you stand out. Tip #5: Put some money in yourself (if you can).
Great resources on fundraising How to raise money http://paulgraham.com/fr.html One Post to Rule Them All startupnorth.ca/2014/06/24 Founders Other founders that have been there before
Recap 1. Lead investor 2. Think beyond tech 3. Make a great deck 4. Set a deadline 5. Put some money in yourself
Questions?

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How Wealthsimple raised $2M in 2 weeks

  • 2. About me - Wealthsimple - Ancestry.com - 1000memories - McKinsey Mike Katchen, @mkatchen
  • 3. In May, we raised a $2MM seed round. It took us 2.5 weeks to raise from 15 investors. Here are a few tips based on what I think we did right.
  • 4. Table stakes for seed rounds: 1. Good idea (in a massive market) 2. Killer team
  • 5. Investors follow the herd. They care more about who else is investing than what you do as a company. Don’t go broad until you have your lead lined up. Tip #1: Find your lead investor early. How investors make decisions 50% 45% 5% Business plan Team Other investors
  • 6. Tip #1: Find your lead investor early. - Former CEO, Assante - Founder, Synergy & GT Global -“Person of Influence of the Decade” Joe Canavan
  • 7. Tip #2: Your angel investors don’t have to be in tech. Active angels in Canada Wealthy people that want to invest in tech x 10x Don’t limit your search to active tech angels. Think more broadly about who would support your company.
  • 8. Tip #2: Your angel investors don’t have to be in tech. Think broadly about your ideal investors. “Smart money” can make a big difference. Wealthsimple investors come from… 64% 36% Tech Finance
  • 9. A compelling deck is short, clear, and well designed. Tell your story in 4-5 pages: (1) what you do (2) market size (3) team (4) growth plan (5) competition Tip #3: Most decks suck - make yours good.
  • 11. Wealthsimple is Canada’s fastest growing online investment manager. We make smart investing easy, low-cost, and transparent.
  • 12. 1980s Mutual funds transform the way investors save for retirement Industry transformations by decade 1990s 2000s 2010s Discount brokerage creates an easy, low cost solution for DIY investors ETFs become a credible, low-cost, liquid alternative to mutual funds Online solutions democratize access to sophisticated investment management The investment industry is transforming
  • 13. Wealthsimple is Canada’s fastest growing online investment manager. We target young professionals that want a smarter and simpler way to invest their savings. We invest clients’ assets in a fully-diversified portfolio based on their risk profile. We use technology to simplify the entire investing experience, from account opening to reporting via web or mobile. We charge 35-50 bps on assets (a lot less than everyone else) and service accounts from $5,000 to millions. Our team includes tech and finance icons Prof. Eric Kirzner, Joe Canavan, Roger Martin, David Ossip, and Dan Debow. What we do WS Global Platform
  • 14. The product SMART INVESTING We build clients fully-diversified portfolios tailored to their risk profile and investment goals. SIMPLE EXPERIENCE We simplify the entire experience from account opening to reporting via web or mobile. DEDICATED SUPPORTED We offer the support you need, when you want it via dedicated Wealth Concierge professionals.
  • 15. The Canadian market opportunity Wealthsimple fills a massive gap in a $1.3T market Full-service ~$1T Self-directed ~$0.3T Low fees Low minimums “Light” advice High minimums High fees “Service” oriented Low fees Knowledge hurdle No advice
  • 16. US CASE EXAMPLE - US market leader for online “light advice” - Added >$1B in 2014: now at almost $2B - One of several US players with >$500MM in assets Wealthfront: $0 to $1B in 2 years
  • 17. • Head of Ancestry Canada • Marketing and Product, 1000memories • McKinsey & Co. financial services • “Mover of the Month” by Financial Post Michael Katchen, Founder & CEO • Co-founder, 1000memories, YC alumni • Director of Product, Ancestry, Stripe • McKinsey & Co. financial services • Rhodes Scholar Brett Huneycutt, COO Team • Co-founder, 1000memories, YC alumni • Wieden+Kennedy creative • Launched award winning campaigns for Apple, Levi’s, Focus Features Rudy Adler, Designer • Engineer, 1000memories, Ancestry • Mobile developer at AOI Pro in Tokyo • Computer Science at Colby College Peter Graham, Engineer • Director or Marketing, Conversion Media, Powered by Search • Founder, Marketers without Borders, Marketers Unbound Alex Rascanu, Marketing Director • Hacker School and HackLab.TO • Ladies Learning Code • Engineer, Virgin mobile, Konrad Group Kate Murphy, Engineer • Investment Advisor, RBC DS, shared $300MM book • Canadian Investment Manager (CIM) • President of Student Council, Huron Dave Nugent, CIO & CCO • Founder, Genius Scan, mobile scanning app with 15MM downloads and 2MM MAUs • Engineer, 1000memories, Ancestry, Amazon • MS in Computer Science Bruno Virlet, CTO (pending) • Sales assistant at Raymond James • Business Marketing at George Brown • Canadian Securities Course Candidate Kayla Wilson, Associate Wealth Concierge • First designer, Wattpad • Lead designer, Wave Accounting Huda Idress, UX Designer
  • 18. Advisors • Former CEO, Assante Wealth Management • Founder, Synergy and GT Global Joe Canavan, Advisor • Former Dean, Rotman Business School • Former co-head of Monitor Company Roger Martin, Advisor • CEO, Ceridian HCM • Founder of Dayforce and Workbrain David Ossip, Advisor • Chair in Value Investing at Rotman • Author of 13 books on investment finance • Founder of the Easy Chair Portfolio Prof. Eric Kirzner, Investment Committee • SVP at Salesforce.com • Co-Founder, Rypple (acquired in 2012) Dan Debow, Advisor • Managing Partner, Impression Ventures • Managing Director, Next36 Ventures Christian Lassonde Bryan Kerdman, Advisor • Managing Partner, Impression Ventures • Former Managing Partner, Bryker Capital • President, Bionym • Former COO, Top Hat, Top Prospect Andrew D’Souza
  • 19. CLIENT ACQUISITION Target market: Young professionals, 25-45 years old. Top income decile but don’t yet have the required assets to hire traditional advisors. Influencers Product Partners High quality content drives organic traffic Referral rewards encourage word of mouth (e.g., Dropbox) Focus on optimizing conversion funnel Branded and white label partnerships for small accounts Distribution partners that reach target segments: law firms, universities, etc. Not sharing at this time… sorry
  • 20. Tip #4: Set a deadline. Lead Deadline Close 2 weeks Once you have a leader investor, move fast to close your round. Closing will always take longer than you expect. 1-3 weeks
  • 21. • If you can afford it, investing in your own round goes a long way • Signals to investors that you are committed, aligned, and will be a responsible steward of their capital • Surprisingly few teams invest in their own rounds so it can also help you stand out. Tip #5: Put some money in yourself (if you can).
  • 22. Great resources on fundraising How to raise money http://paulgraham.com/fr.html One Post to Rule Them All startupnorth.ca/2014/06/24 Founders Other founders that have been there before
  • 23. Recap 1. Lead investor 2. Think beyond tech 3. Make a great deck 4. Set a deadline 5. Put some money in yourself