Harness Wealth raises $ 15 million to democratize the power of family offices – TechCrunch

0

Family offices have been around since the 1800s, but they have never been more numerous than in recent years. According to a Global Family Office Report 2019 by UBS and Campden Wealth, 68% of the 360 ​​family offices surveyed were founded in 2000 or later.

Their rise is due to many factors, including the tech startups that are hitting new centi-millionaires and billionaires every year, as well as the increasingly complex choices that people face with so much moolah. Think about household administration, legal matters, managing trusts and estates, personal investments, charitable businesses.

However, family offices tend to appeal to people with assets to invest of $ 1 billion or more, according to KPMG. Even multi-family offices, where resources are shared with other families, more typically target people with at least $ 20 million to invest. This high bar means that there are still a lot of people with a lot of resources who need to be held by the hand.

Enter Exploit the wealth, a three-year New York-based company founded by David Snider and Katie Prentke English to meet the needs of people with increasingly complex financial situations, especially following liquidity events. Both understand as well as anyone how personal interests can suddenly change – and how difficult they can be when working full time.

Snider began his education as a partner at Bain & Company and later as a partner at Bain Capital before becoming Compass’s first employee and being promoted to COO and CFO after the $ 25 million raise. of the real estate company’s Series A in 2013. Compass has of course grown and now, less than four months after its IPO in late March, it has a market cap of nearly $ 27 billion.

Indeed, over the years, Snider, who joined Bain as an Executive in Residence after 4.5 years at Compass, saw an opportunity to bring together often siled businesses like tax, estate and investment planning, including understood because “it resonated with me personally. . Despite all of these good things on my resume, every six months I found something that I could or should have done differently with my equity.

Prentke English also has a lot in common with the clients Harness Wealth targets. After spending over six years with American Express, she spent two years as CMO of London-based online investment manager Nutmeg. She left the role to start Harness after being introduced to Snider by a mutual friend; meanwhile the nutmeg was just right acquired by JPMorgan Chase.

While there is no shortage of wealth managers these people can turn to, Harness says it does more than match people with the right independent registered investment advisers, is a key part of its business and part of the secret sauce of its tech platform, he says. He also helps his clients, depending on their needs, to connect with a team of professionals across a range of verticals, much like the access an individual might have if they had a family office.

As for how Harness makes money, it collects a portion of the fees that the platform’s advisers charge for their services. Snider says the percentage varies, although it is an “ongoing revenue sharing to ensure alignment with our customers.” In other words, he adds, “We only succeed if they are successful in the long term with the advisors on our platform,” as opposed to if Harness were just collecting lead generation fees at the end of the day. departure.

Ultimately, the company believes it can replace many of the DIY services available in the market, like Personal Capital and Mint, and suggests it progresses, with an expanding customer base that includes Coinbase employees. , UiPath, Paypal, Snowflake, Doordash and Amazon, as well as partners of venture capital firms.

Part of that confidence is rooted in Snider’s experience with Compass, which in its early days although he could navigate realtors, but “found that if people wanted better data insight and better UX, they also wanted this coupled with someone who I had had many clients who looked like them, ”Snider says. Prentke English teamed up with him after discovering that Nutmeg, too, “ran into the limits of a non-human solution,” he says.

Investors think the thesis makes sense, of course. Harness just closed with $ 15 million in Series A funding led by Jackson Square Ventures, a round that brings the company’s total funding to $ 19 million.

As to what Harness Wealth is doing with this new capital, some of it, interestingly, will be used to develop its own captive line of business called Harness Tax. As Snider explains, more and more of his clients are finding that tax planning is one of their biggest concerns, given everything that is happening on the IPO front, with PSPCs, with the job. remotely, and also with cryptocurrencies, in which more people are investing money but around which the tax code is catching up.

This makes sense, given that tax planning can be urgent and often dictate the overall financial planning strategy. At the same time, it’s fair to wonder if some of Harness Wealth’s advisor partners will be barred from working with the outfit if she thinks her partner is becoming a rival.

Snider insists Harness Wealth – which currently employs 22 people and is not yet profitable – does not have such designs. “Our goal is only to help people where we can add value, and we saw an opportunity to look at the tax side.” Harness has a “very large population of people who may not understand their tax obligations” due to the crypto boom in particular, he explains, adding, “We want to make sure we are at the forefront. “and ready to help when needed. .

Other new and existing Harness Wealth investors include Bain Capital; Capital of the torch; Activating; Capital of gingerbread; FJ Laboratories; I2BF companies; Capital of the first minute; Liquid2 companies; Alleycorp, Marc Benioff; the founder of Compass, Ori Allon; and Paul Edgerley, former co-director of Bain Capital Private Equity.


Source link

Leave A Reply

Your email address will not be published.