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In at present’s episode, I’m joined by Gaurav Sharma, CEO and Co-Founding father of Capitalize a venture-backed fintech firm in New York targeted on the retirement financial savings market.
Gaurav and I cowl a variety of matters, together with:
The Measurement of the 401K Rollover Situation:
After working in monetary companies for 10 years and at a lot of corporations, Gaurav gained acute information of the U.S. 401K financial savings problem — when staff change jobs, their 401K accounts don’t change with them. Coming from Australia additionally helped Gaurav achieve perspective on what a extra easy, necessary financial savings account appears to be like like. Having grown up round entrepreneurs, Gaurav determined to sort out this drawback himself. Capitalize has discovered that 15–21M folks change jobs and 401K accounts per yr, and roughly 1/third of these folks money out their accounts, ($100M in complete) paying taxes and penalties on their cash. One other 3–4M folks depart their cash behind for an prolonged time period. With these inefficiencies, Capitalize has calculated that there are $1.35T in property sitting inside forgotten 401Ks.
Capitalize’s Product and Buyer Base:
Capitalize presents an internet expertise that helps customers discover their previous 401K accounts, evaluate and choose the fitting IRA, and deal with the rollover course of on-line by way of top-tier consumer service to verify the cash will get consolidated into 1 new account. Presently, Capitalize predominantly serves people of their late twenties by means of mid-30s which have had 3–5 jobs since graduating. Nevertheless, Gaurav has seen this consumer base develop past the early adopters, right into a extra mainstream viewers. The success of this product has made Capitalize one among Time’s Finest Innovations in 2021.
The Fundraising Course of:
Capitalize raised its Sequence A spherical in February of 2021 from a lot of distinguished fintech traders, together with Canapi Ventures (lead), Bling Capital, Greycroft, RRE Ventures and Walkabout Ventures. Gaurav credit investing in private relationships with VCs, and conserving them appraised of the progress Capitalize was making, for the success of their Sequence A spherical. Whereas the fundraising course of is rarely simple, Gaurav and the staff felt like they have been in a position to streamline it as a lot as doable.
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Gaurav Sharma:
Gaurav leads Capitalize’s mission to assist folks save for retirement. Earlier than founding Capitalize, he labored for a number of the best-known monetary establishments, together with JP Morgan, UBS, Morgan Stanley, and as an investor at well-known hedge fund Greenlight Capital. After seeing how onerous it’s for most individuals to know their retirement accounts, he determined to construct an organization that makes it simpler. An Australian by start, Gaurav lives in New York together with his spouse and their adopted pet, Lorenzo.
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Concerning the Writer:
Anirudh Singh is a second-year MBA Candidate at The Wharton Faculty, the place he’s a part of the Wharton FinTech Podcast staff. He has a ardour for financial improvement, enterprise capital, monetary companies, and all issues FinTech. Don’t hesitate to succeed in out with questions, feedback, suggestions, and alternatives at singhan@wharton.upenn.edu.
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