The SPAC, or special purpose acquisition company, is the most recent IPO craze to hit Wall Street. Many reputable companies are going public via this route — over 200 were formed in 2020 alone. SPACs have existed since the early 2000s, but they have recently enjoyed a resurgence in popularity. And with many more slated to take companies public in 2021, the surge shows no signs of slowing down.
So what is a SPAC? What would make some companies pick a SPAC over a traditional IPO? And why are investors lining up to jump on the trend? On this installment from our "dot.LA Explains" series, host Kelly O'Grady runs through what you need to know. Be sure to register for dot.LA Intersect 2021 on Wednesday, April 28th where we will delve deeper into the role SPACs play in the media and tech industries!
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.
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.
"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.