Founder of LearnVest (sold to Northwestern Mutual for $375M) and co-founder and managing partner of venture firm Inspired Capital.
Alexa von Tobel sold LearnVest to Northwestern Mutual on March 25, 2015, for about $375 million, five years after launching.
“And on our 5th birthday, on March 25th, 2015, sold the business to Northwestern Mutual for about $375 million.”
Alexa von Tobel sold LearnVest to Northwestern Mutual on March 25, 2015, for about $375 million, five years after launching.
“And on our 5th birthday, on March 25th, 2015, sold the business to Northwestern Mutual for about $375 million.”
Drawing on Harvard happiness research, von Tobel argues people under extreme stress can outperform short-term, but happy, relaxed, fulfilled people outperform over the long run. Positive energy and attitude are an undervalued resource because people are drawn to positive people.
“So, the short term is that under extreme duress and extreme stress, you can outperform in the short term. If you're actually very happy and relaxed and fulfilled, you outperform in the long call. So, when you're building teams for long-term success, so, you know, Inspired Capital, it's a venture fund. We have a really unique group of people that have come together to build this firm. And we're trying to build a long-term fund. And so, I'm very focused on let's make sure we have long-term happiness because you outperform in the long run.”
Steal thisOptimize teams for long-term happiness, not short-term stress; treat positive attitude as a recruitable competitive resource.
LearnVest's plan never changed: start with free content to build an authentic brand and audience (a free newsletter in 2008), then add tools (a budgeting app), then advice. Each stage was an extension, not a pivot, with the company following its customers into what they wanted next.
“So we started, it was, the business plan was always the same. It was content, tools, and advice. And I started it out of my own savings. So we started with content because back in 2008 in New York City, I actually founded the company in 2007, you could do a free newsletter and just kind of get going. And so we started creating a brand, we started trying to talk to our users and just have a really authentic voice”
Steal thisBuild audience with free content first, then layer tools, then high-value advice as you learn what customers want.
The financial-advice industry pretended to give advice free but charged heavily on products, costing someone with $100,000 around $2,000 a year. LearnVest flipped it: a transparent flat $500/year for unlimited advice and no product sales, which von Tobel says turned the industry on its head.
“The industry used to pretend to give advice away for free but then charge you deeply on all the products that they would give you. And all those fees would actually be pretty material. So if you had $100,000, you were paying $2,000 a year for advice. And that didn't always feel good. People were very distrustful. And so, we just said, flip it over, make it $500 for the year to get access to unlimited advice and we'll sell no products.”
Steal thisIn an industry that hides fees inside products, win trust by charging one transparent flat fee and selling nothing else.
By acquisition LearnVest had about 2.5 million signed-up users, roughly half a million who linked their full finances, and about 100,000 paying customers, all built without spending even $1 million on advertising.
“we didn't ever spend on advertising. We, I think by the year we got acquired, we hadn't even spent $1 million on advertising. It was really old school. We were very focused on like, let's, let's go and find customers through business partnerships and relationships and creating content.”
Shaan estimated LearnVest did under $10M in revenue, making the $375M price a huge multiple. Von Tobel says revenue was much higher and the real value was ~8 patents on cash-flow-based financial planning software that didn't previously exist, despite 78% of the country living paycheck to paycheck.
“So, we had about 8 patents on our software. We built cash flow-based financial planning software, which didn't exist, which is really silly if you think about it. Most of the financial planning software out there was focused on helping people who are quite wealthy think about how to build more wealth, but it didn't have to ever net, can you pay your bills? But for 95% of the country, right now, 78% of the country lives paycheck to paycheck.”
Von Tobel describes herself as a recession entrepreneur who always lived as if there was no extra money, started by spending her own savings, and kept LearnVest near profitable even after raising $35M, holding ~$45M of cash at acquisition.
“My roots, first of all, are like, I'm naturally, you know, very, very frugal, very scrappy. Every dollar, every dollar we started spending was my own money, um, in the early days that I started the company up. And so that was, and I'd read a few different founders saying that that's the best way to be a founder. And I, I lived it because I felt like it was the right way to run the business.”
Steal thisOperate as if money is scarce even after raising; spending your own cash early instills the discipline that keeps you near profitable.
Despite ~$45M cash and a growing business, von Tobel sold because mission mattered more than ownership: signing up only 40 households a day was a slog, while Northwestern Mutual's 8,000 advisors could take the platform from 100,000 to 5 million families fast.
“Um, but I remember thinking to myself, oh my goodness, Northwestern Mutual has 8,000 financial advisors that passionately care about the mission in the same way I do. That can actually go and use this platform to get to more families faster. And if I really believe in our mission, that's probably the right thing to do actually for this business is if you could tell me that I could go from 100,000 to 5 million in a short period of time and like guarantee that that would happen, like that actually is a better use of what I built.”
With several acquirers at the table, von Tobel says the CEO's job was to gather every opportunity and bring them to the board unemotionally, presenting each path rather than deciding alone. She didn't make her own call until the morning they signed, given she was deciding on behalf of ~150 employees and hundreds of shareholders.
“My job was actually to go get all of the opportunities and unemotionally bring them to the board and to say, here are all the different paths that we can take forward. And then the board came together and made a decision of what we thought was best for us. Um, and I actually waited until that day, which was the morning that we signed, to make my decision because my job was gathering all of the different opportunities to bring them to the board and say, here's what we have in front of us.”
Steal thisWhen selling, separate your role: gather and present every option to the board unemotionally before forming your own opinion.
Von Tobel notes only ~22% of people want to talk to a financial advisor; the other ~78% just want their money problems solved for them. She pitches self-driving wallets that automatically route every extra dollar to the right place instantly.
“But about 78% of the country doesn't want to talk to anybody. They just want the problems of their wallet to be solved for them. And so I get really excited about the future of self-driving wallets because I actually think every hour that you have an extra dollar, penny, $10, $100, $1,000, it should go to the exact right pocket instantly.”
Steal thisBuild money tools that decide and act for the user, not dashboards that ask the user to decide; most people won't.
Von Tobel argues the blocker to autonomous wallets is money movement: funds still crawl across 1971-era ACH rails that take ~5 days. She pitches liquified money and questions why people get paid every two weeks when they work every day.
“So we've written thesis upon thesis papers. I call it actually Liquified money is the thesis, which is also— and I'll give you another example. Why do we get paid every 2 weeks? How does that make any sense? You work every day. Guess what? For a normal American family, getting paid every day, materially helpful.”
Steal thisAttack the ACH money-movement layer first; instant settlement is the unlock that makes daily pay and autonomous wallets possible.
Von Tobel cites that the average American family has between $9,000 and $16,000 of credit card debt while the average savings account holds just $400, arguing that streaming pay plus nightly bill payment could materially help.
“And keep in mind, the average family in America has between $9,000 and $16,000 of credit card debt based on how you cut it. The average savings account is $400.”
Von Tobel says Europe runs on real-time payment rails and is roughly a full decade ahead of the US, where you don't even need a Venmo equivalent because money moves bank to bank instantly.
“Europe is miles ahead of us. They're on real-time payments rails, and you can actually, uh, they like let— they're, they're like a full decade ahead of us in terms of you don't even need Venmo because you can just pop money into each other's bank accounts, bank to bank.”
Von Tobel argues that unlike curing a disease, optimizing a household's money is pure math: for any American wallet you can mathematically determine where the next dollar should go to save them money. Once people state their goals, software could re-optimize every hour or minute.
“This is math. For every American wallet, I can mathematically tell you where their next dollar should go to save, to save them money, make their life better. Um, and outside of them telling us what their goals are, then the math can do it, and it can do it every hour or every minute. And at some point when you get there, that is better for the American wallet.”
Steal thisFrame personal-finance automation as a solvable math problem, not advice; the answer for the next dollar is deterministic once goals are set.