Betterment

SUMMARY:

Jon and Eli break down what it took to launch Betterment in the middle of the century’s largest financial crisis.

LESSONS LEARNED:

  • Nobody likes planning for the worst, but it proved critical to have a game plan in place if a co-founder ever left. When the time came, the transition went smoothly as a result.

  • As a first time founder, whatever your timeline for product development is quadruple it.

  • Tell investors what you want: how much you’re raising and how you’ll spend it. Without a game plan, initial inbound interest stalls.

  • When hiring outside counsel, press for specifics: what is their access deal flow? What terms makes sense for a company at your stage?

  • Establish a customer acquisition strategy because you’re not going to have a Techcrunch article every few months.

  • Begin recruiting before you need to: it takes 3 months to hire a good candidate.

  • Interview advice: people have to really want to build a company, not just work at one.

  • Finding office space: biggest lie is square footage in commercial spaces, bring a measuring tape.

  • Recruiting: in an interview investigate both behavioral and fit aspects of each candidate: why this specific company and why this role?

  • Select benefits to suit your employee’s needs: young people tend to go to the Dr. sparingly so high deductibles can be effective.

About Jon:

Jon Stein is the Chief Executive Officer of Betterment.com, which he founded in 2007. Prior to creating Betterment, Jon spent his career developing financial products, platforms, and investment strategies for international banks, brokers and other financial institutions, and advising them on strategies to mitigate the risks inherent in their products. Most recently, Jon held the position of senior consultant at First Manhattan Consulting Group, where he counseled a number of the world’s most prominent financial institutions. Jon has in-depth knowledge of retail banking and investing and is a Chartered Financial Analyst (CFA). Jon is a graduate of Harvard University and Columbia Business School.

About Eli:

Eli Broverman is the Chief Operating Officer and co-founder of Betterment. An expert in securities and financial institutions law, Eli also serves as Betterment’s General Counsel. He has designed a wide range of structuring and compliance initiates for broker-dealers and investment advisors. Prior to forming Betterment, Eli practiced law at the international law firm Proskauer Rose LLP where he advised Fortune 500 companies and their senior management on securities, tax, and compensation matters. Eli is a graduate of Brown University and New York University School of Law.

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