Compound, a fintech startup built for wealthy tech investors, emerges from stealth with at least four billionaire investors.
Unlike many wealth management firms, which charge customers a percentage of their assets, Compound levies an annual subscription fee for use of its platform and access to its on-staff financial advisors. This cost varies and is based on each client’s individual needs: the more complex those needs, the higher the cost. A spokesperson for the company says that the traditional assets-under-management fee model is “misaligned with the needs of clients who are illiquid.
Compound’s web-based platform integrates with Carta and Shareworks, equity management platforms popular with startup employees and angel investors, which allows users to track the value of their private holdings on secondary markets. Users can also link their Coinbase and Ethereum wallets to track their crypto and NFT holdings. A big part of Compound’s appeal: Users have access to modeling tools that help them explore the tax consequences of various exit scenarios involving their company equity.
To understand their market, Gonen and Schein say they interviewed hundreds of startup founders, angel investors and other wealthy people to better grasp their financial pain points. Gonen passed the Series 65 exam, becoming a licensed investment adviser. “Over time,” said the 24-year-old CEO, “it became clear that we had a huge opportunity to help a new generation of people who aren't serviced by traditional firms and have nowhere else to turn.