Ellevest’s CEO Sallie Krawcheck isn’t feeling the love when it comes to some of her company’s investors.
"Most of us actually like our spouse better than we like our investors," she said at Fastcompany.com's annual Innovation Festival. "When you're raising money, you're dating and everybody is on their best behavior," she said, adding that “it's easier to divorce your spouse than it is to get rid of an investor in your company.”
Krawcheck, who was named the seventh most powerful woman in the world by Forbes, the Top Female Founder by Inc., and as “The Last Honest Analyst” by Fortune magazine, co-founded Ellevest in 2014. The New York-based robo advisor has raised a total of $77.6 million in seed money from an eclectic mix of investors that include athlete Venus Williams, Melinda Gates (through her firm Pivotal Ventures), Valerie Jarret, a former advisor to President Obama, former Google CEO Eric Schmidt, Morningstar, and Ulu Ventures.
Its most recent raise was last March, when it closed a $33 million funding round, led by Rethink Impact and PSP Growth. Other new investors included PayPal; Elaine Wynn, co-founder of Wynn Resorts; Gingerbread Capital; and Mastercard. Ellevest had said that it would use the money to invest in its technology, expand into new product categories, and develop interesting financial education.
Ellevest currently has customers in all 50 states, with the average client around age 34. And while it has a bevy of high-profile backers, the company hasn’t been able to build its customer base fast enough to make some of its investors happy. Krawcheck, however, declined to name which investors were giving her a hard time.
In May 2016, Ellevest accumulated $136,185 in assets under management (AUM). One year later, AUM rose to $25 million, while in March of last year, the company reached $283 million and currently stands at $400 million.
The company, which charges almost double what most of its rivals charge for the base service, is focusing on higher net-worth women that will pay higher fees with Ellevest Private Wealth Management, which charges 90 basis points on the first $2 million of assets.