On today's episode of Behind Her Empire, meet Sallie Krawcheck, the CEO and co-founder of Ellevest. Her company is an investment platform focused on narrowing the gender gap and creating a space for women in finance.
Krawcheck wants to put money "in the hands of women" with her fund, and she's well on her way. Ellevest, which launched in 2016, recently announced it has $1 billion under management.
Before starting her own company, Krawcheck was a top dog on Wall Street. She was a CEO of Merrill Lynch, Smith Barney, US Trust Cities Private Bank and Sanford Bernstein. She was also the CFO of Citigroup. Previously, Krawcheck was a top-ranked research analyst covering the securities industry. She's widely recognized as one of the most influential women in business and has been recognized by INC Magazine as a top female founder. She's also been called "the last honest analyst" by Fortune magazine and was named the seventh most powerful woman in the world by Forbes.
In this episode, Krawcheck discusses how directors in Wall Street turned her down because she was a mother, how she was continually underestimated by men, how she dealt with two public firings, and what inspired her to start Ellevest. She also touches on how women should invest, and why talking about money is the first step to eliminating pay disparities.
"The director of research at Smith Barney turned me down and was polite enough to call me and tell me why. He said, '...We found out you have a baby at home, so we don't think you work very hard.' And I'm like, 'all right'. Years later, I fired him when he worked for me because he didn't work very hard." — Sallie Krawcheck
Sallie Krawcheck is the co-founder and CEO of Ellevest, an investment platform designed for women, by women.
Santa Monica's Clocktower Technology Ventures is going south.
The venture arm of the global macro investment firm, Clocktower Group, announced Wednesday it is raising a $25 million fund focusing on financial services innovation – or Fintech – in Latin America.
Having backed more than 90 firms since 2015 across North America and Europe, the firm became interested in Latin America a year ago when it invested in Kushki, an online payments startup based in Ecuador, according to Clocktower partner Ben Savage.
"We realized just how good we believed the opportunity in Latin America to be, and we thought it made sense to pursue a purpose-built financial innovation strategy in the region," Savage told dot.LA.
The more he looked at the region, the more Savage became convinced consumers there were being woefully underserved by the small number of stodgy banks.
"We think this presents an attractive opportunity for industry disruption," Savage said. "From an entrepreneurial standpoint, there are two ways to approach it: You might address the blank space where incumbents are not and build financial services there, building financial products and leveraging tech to build faster and cheaper. Or you might compete directly with incumbents who have benefited from a lack of competition for many years."
Savage and his partners were also attracted to Latin America because of the high quality of entrepreneurial talent, many of whom have worked for major American tech companies that employ engineering and operations employees in the region.
"In some cases we see entrepreneurs who have been successful in the U.S., return home to Latin America to build a new company," Savage said. "We think over time a large cohort of the next wave of technology companies will be folks who spun out of great businesses."
Clocktower does not plan to open an office in Latin America and its team will still be based in Santa Monica.
"We do anticipate our team will spend time in the region once it's safe to do so," Savage said.
Investors in the new fund include Hirtle Callaghan – an outsourced investment office for families and institutions that manages upwards of $18 billion – along with hedge fund CIOs such as Alan Howard, Philippe Jabre, Glen Kacher and John Burbank's Passport Foundation.
Two months ago, Ken Lian, co-founder and CEO of Cheese, applied for a checking account at a major bank. He was rejected again, despite his sterling 800+ credit score.
Since immigrating from China to the U.S. in 2008 he has been routinely denied from opening bank accounts, had to pay thousands of dollars in fees and been limited to the least desirable no-rewards credit cards.
"This is a common issue," he said.
So, Lian decided to start his own challenger bank aimed at Asian Americans and other recent immigrants. It launches Wednesday with a zero-fee debit card offering cash back rewards, putting a modern twist on what Pasadena-based East West Bank has done since 1973.
"We run it not like a bank but put users first," Lian said. "We really are putting the user at the center."
While traditional banks frown on frequent address and phone number changes, Cheese takes a more holistic approach. It is looking at accepting visas and other forms of identification. The bank will also market in places favored by immigrants – think WeChat rather than Facebook – and is partnering with community leaders to help reach a population that has historically been distrustful of banks.
"Both my parents are immigrants and they have a lot of problems walking into a bank and feeling comfortable with that experience," said actor and advocate Jimmy Wong, Cheese's chief community ambassador.
There are nearly 21 million Asian Americans living in the U.S. and they represent the fastest growing, most affluent and educated of any racial or ethnic group.
A quarter of all households don't have full access banking services and half of foreign-born noncitizens are unbanked or underbanked, according to the FDIC.
Cheese co-founders from left to right: Zhen Wang, Ken Lian, Qingyi Li.
Based in Pasadena, Cheese, which is named for the popular slang term for money, is national but has a focus on three cities with the largest Asian populations – San Francisco, Los Angeles and New York City.
Though targeted at Asian Americans, anyone can sign up and Cheese said its waiting list is multiracial, with a third of prospective users self-identifying as Black and another third as white.
Lian worked a brief stint in business development in 2016 at Honey, the browser extension that helps consumers find deals and rewards and was acquired by PayPal in 2019. From that, he said he learned the popularity of rewards, which Cheese plans to dole out liberally.
Users can earn up to 10% cash back at popular merchants like Netflix and Starbucks as well as Asian grocers 99 Ranch Market and YamiBuy.
As part of its launch, Cheese has pledged $100,000 to nonprofits and community service programs in support of Asian neighborhoods and businesses hardest hit by hate crimes and economic hardship during the pandemic.
Cheese's backers include Amplify, IdeaLab, and Operate Venture Studio as well as Adam Nash, former CEO of Wealthfront, and Spencer Rascoff, the co-founder of dot.LA and Zillow.
Cheese is the just the latest VC-backed challenger bank to target niche demographics including Black and LGBTQ people and take on the legacy banking industry. OnJuno, which launched last year in San Francisco, also caters to Asian immigrants.
Editor's note: This story has been updated to clarify where the bank's service is offered, as well as accepted id verification.