 Next to the stage will be Sally Krocheck of L.A.V.S. and Heidi Patel from Rethink Impact. Sally is the CEO and co-founder of L.A.V.S., a digital financial advisor for women launched in 2016. She is the owner and chair of Elevate Network. Prior to this, she ran Merrill Lynch and Smith Barney. Sally is led by a simple idea. Women ought to invest in women and their interests. In her words, she has matured in her career and come in and recognize that feminism must include a candid look at the structural powers that are working against women and look at the opportunity to invest for women. Heidi is a partner at Rethink Impact, a venture capital firm that invests in impact companies with the potential to deliver financial returns for investors alongside transformational social and environmental change. While they invest in a broad range of impact businesses, they are particularly focused on supporting early and growth-stage companies that have women in management roles and use the technology to generate positive impact at scale, creating a more inclusive economy that provides enhanced benefits for people and our planet. Heidi came to this work from a traditional finance background and observed that there was a real opportunity to use these tools for good. Patel continues to be inspired by the authentic leaders who are creating significant impact alongside building big, investable businesses with the potential to change our economy. Please welcome to the stage Heidi Patel and Sally Krajek. Thank you both. Oh, thank you. So thanks for sticking with us. I know it's the end of the day and there are food trucks and drinks coming soon. So thanks for being here. So as Sammy was just talking about, I think many of you know Sally Krajek as being this co-founder and CEO of Elevest. Others of you may know her as being one of the senior women, most senior women ever in Wall Street history. And what you're about to hear firsthand is why Sally is also one of the most followed women in tech and as I can personally attest, one of the most authentic and hardworking women in the space. And I always say about Sally, she's on a red eye at least once a week and she's actually on a red eye in just a few hours. So Sally, one of the big headlines coming out of the money 2020 conference this week is that quote, the wealth management industry is failing women. Yep. And some of the evidence of this is 71 percent of every dollar owned by women is held in cash and women by the age of 75 are three times as likely to end up in poverty compared to men. So you used to manage 15,000 of all the advisers at Merrill Lynch. What is going on? Why are women being so left so far behind? Well, you know, I think the industry for forever has said, well, women are different from men. They're very risk averse. They need more financial education. They're not so good at math. There was a whole bunch of reasons why women not investing as much as guys do was sort of their fault. But if you actually step back and you say it's probably not surprising that an industry that is so male dominated, 86 percent of financial advisers are males, 90 percent of traders are males. Of course, it's going to do a better job for men than it does for women. And so we've had investing, which has been really gamified, outperforming, beating the market, picking the winners. And as it turns out, as we put in thousands of hours of research on what motivates women to invest, that's not what motivates them. You know, they're not interested in the the to and fro of the markets and outperforming and watching CNBC. What we discovered is they're actually very goal oriented. You know, they think of investing not as a thing unto itself, but really as a means to an end. And so L of S, despite all of the investing programs for women at all of the big financial institutions, was the first to really step back and say, let's put in thousands of hours of time and really get to what motivates them and build a product around them. So rather than telling them you've got to change for us, you know, we said, you know, let us change the product for you. And so you mentioned women being more goal oriented with with their dollars. Does that mean that they are less competitive or less interested and less appetite for risk? No. See, that's one of the things we hear about women all the time is women are risk averse. What we've actually discovered and there's a subtle point is that women are risk aware and that we just want to understand risk and we want to understand it not in terms of standard deviation and drawdown risk, but we want to understand how much of my money could I lose if the market gets this bad? Can I still retire if the market's down 500 points? Can I still buy my home in five years? And what we've discovered is that if you can build a product that shows them if they are on or off track that shows them, you know, in a down market, do they have a 40 percent chance of buying the home they want still or a 50 percent chance or a zero percent chance? And if the chance is lower than they want, then they should just deposit another thousand dollars or have a recurring deposit of a hundred more or something like if you can show them that they'll actually take on risk. And we found no difference whatsoever in risk taking amongst women and men at Alavest. That's interesting. And so why was it so important to start Alavest from scratch? I mean, obviously being a startup CEO is one of the tougher jobs you can have. You had tremendous relationships at some of these big firms. Why was it so important to start it from scratch? Well, I actually didn't want to start it from scratch. I thought about the last thing I wanted to do was to become an entrepreneur because who needs to take a red eye once a week and who needs to, you know, go raise outside money and, you know, all the hassle of it and set yourself up for public failure? Like who wants to do that? And so I went to any number of the big banks and said, look, this is the opportunity, right? Women invest, hey, women invest this much less than guys do, the market is huge. And by the way, if we can get more money to women, we improve society by a good bit because when women have more money, they put more into their families and communities and they give more away to nonprofits. So it's a win, win, win, but it's difficult to do it when you have, you know, why didn't I do it when I ran Merrill? Well, because we had a very successful, you know, business that was earning a couple billion dollars a year. And so to try to then fundamentally change it, which by the way, if you're right, which is a big, big if, and if you're doing a technology-based solution, which we were, you're gonna take the 150 basis points on assets you're earning and what, take it to 25, right? So you're gonna give up profitability. So plus the brand is established, the people are all rowing in one direction. So, you know, I just found you just, the CEOs weren't ready to change their businesses. They were ready to do a marketing campaign, but not to fundamentally change their businesses. It was just nothing's easy, but it was easier to start it from scratch. And so for those of the people in the audience that haven't been on the L of S site, what is it? And what was it like when you went to go fund raise of venture capitalists to get the business going? Oh my gosh, it was horrible to fund raise of venture capitalists. It was horrible. Well, it's so hard, right? When you get the thing started because you've got an idea, but you know, I have to tell you the truth, even I sort of thought the idea wasn't gonna work. You know, at the bottom line, I'm like really, like if it really was this obvious wouldn't someone else have done it and hear the four people who tried and failed and hear the big companies that spent tens of millions of dollars and failed. And so I would actually, and I don't know what the solution's gonna be, so please give me money to try to find the solution. And then you had to have the team in order to get the money, but you had to have money in order to get the team. And I mean, what a mess. Like why would you do that? But I did it and what was the other part of the question, but the fundraising was horrible. So when you were in those meetings, what were some of the questions you got? Like what were the biggest areas of pushback? So at the beginning it was a lot of women just don't need their own thing and women won't invest and their husbands do it for them. And you know, it was just a lot of the, and other people, other people have tried and failed. And you know, and then when the press started writing about us, the skepticism was well, this isn't even the real problem. You sure maybe there's a gender investing gap, but the real problem is a gender pay gap. And until we fix that, you know, we're not fixing things. And it's like, well, that doesn't make any sense. And then the pushback we got when we launched was really interesting. So after we had spent the time, built the product and are ready to go, and we have the thing out there and it's on Facebook and people are looking at it. And I'd say what was fascinating is about 60% of women said, well, this looks interesting, okay. But about 30% of women said, this is outrageous and ridiculous. And how dare you? This is sexist, we don't need our own thing. I don't need some dumbed down remedial financial education and they get really angry about it. And then what would actually happen is they would go in, some of them would go in, look at the product and come back out to Facebook and say, wait a second, I looked at it. It's the only one that takes into account the financial planning that we women live longer that our salaries peak sooner. And the portfolios are highly, actually this is more sophisticated. In fact, this is feminist, it's not sexist. But the sort of, the thing that's maybe not surprising but interesting is that there wasn't actually a single solitary woman who said, oh, this is for women and it's built by mostly women, it must be better. There was an underlying assumption that it was worse. And what do you think is driving that? It's how we're socialized, right? It's how we're socialized as females and it's also years and years of products for women being smaller and pink and more expensive. And so there was an assumption particularly around numbers and I think it also from all the years of financial services companies having their women's initiatives of remedial financial education literally there was a large financial services company that a few months ago did an event for women which was facials and stocks, right? And I think you're like, you gotta be kidding me. And so Cindy Gallup has said, and I think it's important, I quote her all the time, there's a lot of money to be made from taking women seriously. And by taking this customer seriously, we've been off as you know to a very rapid start. So you closed your series A round a little over a year ago and I know that you did a ton of research around this issue and what it means to invest like a woman. Now that you've been at this for a couple of years, what parts of that research are you seeing prove out and what have been kind of big surprises not even running the company for a couple of years? Well, you know, we talked about some of it already, the fact that women are not risk averse as we keep thinking they are, I think has been surprising for some. What I'm more surprised about, if I'm truly honest, is that we were able to get the traction we've been able to get. Because if you actually think about what we were trying to do, it was, hey, you've never heard of us before. This is a new offering. It invests in a different way than what you're used to seeing. We have no track record. You've gotta do it all online. You can't really talk to anybody. Did I mention you've never heard of us before? And so when she would go through and she would save her financial plan and she would take it to her boyfriend or partner or father or cousin, and they would say, what is this way of investing, that you're investing for goals as opposed to trying to get the highest return? That doesn't make any sense. And so it's interesting to me, and we were having our change of behavior from most of her money was in cash to invest it. So by the way, while you haven't heard of us before and we don't have a track record, we could lose everything. And so I actually think if I'd really sat back and thought about what we were gonna do before we did it, I probably wouldn't have done it. Because it was just such a high hurdle. But in fact, we gained, as you know, very early, strong traction. Right. So if I'm someone that's early in my career and I'm really burdened with student loans, is L of S right for me now? I wish I focused more on paying down those loans versus trying to invest. So we produce a lot of content. And because we want to help as many women as we possibly can to become, not financially independent, that's not a reasonable goal, but financially stable. And so for a woman who, or a man who is coming out of school and has those loans, they shouldn't be investing with L of S. What they need to do first, you know, we're very clear on this. First, you gotta pay down that high interest rate debt. Second, you need to build up an emergency fund of a couple of few months of take-home pay. The third, which doesn't feel sexy when you're 23, 24, 25, is to start investing for retirement. Particularly if you get a match because that's free money and you get the tax advantage of it. And then you begin to invest with an L of S. And we tell young people, you know, you wanna go for a target of 50% of your take-home pay goes to your needs, 30% for fun, because everybody needs to have fun, and 20% should be to grandma you or future you by saving or investing. And so talking about folks that are kind of earlier on in their career, do you, is this a generational thing? Do you see women that are younger, earlier in their careers, less likely to have that 71% in cash? Do you think this investing gap is something that's just gonna go away with time? Is it getting better as people are? I don't know, I don't know these days, Heidi, if anything's getting better. I mean, we just saw the new report of women in the workplace and for all that we've been talking about advancing women and it's been, you know, all the books about it, all the advice about it, the cottage industry about it, we have made no progress, right? You know, the gender pay gap for white women is decades away from closing for black women 100 plus years and for Latina women 200 plus years. You know, it's just, it can be very frustrating. So of course, you know, we're not seeing a move yet in that gender investing gap that we're certainly working hard at it. The generational change that we're seeing is that women, younger women are much less likely to have their spouse or partner solely in charge of the money and so if you're above the age of 45, maybe the husband, if you're in a, you know, in a relationship with a man is likely to manage it. Below the age of 35, women are keeping it under their control and obviously we're trying to help. 80% of women die single, right? So we're saying, you know, even if he manages the rest of it, they call it an individual retirement account for a reason overall. And the other thing we're seeing that's interesting is that younger women are becoming feminist much sooner. You know, Gloria Steinem has said that women are the only group that become more radical as we age. And that typically what happens is women in their 20s, yeah, the whole feminism thing is over, I see lots of women at work, my mother was a feminist so I'm gonna rebel and not do that and we're fine. And then women in their 30s go into a fugue state of kids and marriage and bad boss and good boss and work and trying to get promoted and kids and all that stuff. And then women tend to come out in their 40s, they're late 40s and look around and say, where the hell are all the other women? March, right? And what's actually changing, which is the good news is that with the election of Trump, right, and with the culture wars that are going on in our country, we're seeing younger women much more aware of these inequities and these issues and much more ready to take action about it. And we hope therefore much more ready to invest so that they have got the resources and the independence so that they can fight these battles because look, we gotta be clear, right? At a capitalist society, money represents a form of power and that part of what has enabled the me too in the time's up moment are women who are not necessarily financially independent but financially stable and in a position where they could speak out. And so it's not, you know, it's a necessary but perhaps not sufficient condition for real equality for us. Right, and so as I understand it, you're also serving not just folks that are just kind of getting going with investing but people who have made it, people who have pretty substantial net worths. Talk about what you're offering them, like why is Elevis right for them when they might be used to something that has more hand holding to it? Well, this has been a surprise because we really expected to start, we really started as a digital only platform and what we started to hear from women who were further on in their lives and had some money was, look, you know, we wanna be part of this. Elevest enables women to invest from their first penny and so I wanna be part of that change. I wanna be investing in that change and quite frankly, we had some women tell us, you know, the investing industry, their parts of it, they're like, you know what, I don't wanna always support, you know, an industry that hasn't supported me and for all of you in this audience knows very well, the majority of women are interested in impact investing but it's a very small single digit minority of financial advisors who have spoken to them about it and when most of them hear about it, you know, when financial advisors are asked about it, they say you have to give up returns in order to do this and so we hear from so many women of some means which is that doesn't make sense to me. I don't understand why if I'm investing for the environment or in social causes or, why do I have to give up, that doesn't make any sense that I have to give up return and so at Elevest, one of the things we're offering, particularly for women of some means, is the opportunity to invest behind other women, gender lens investing which is, you know, a little hard to come by these days and so there's a real interest in, can I be part of this, support these women who are starting out and support women through investment products as well and so there's a nice sort of circular reinforcing reference here. Right and what about your team? How have you thought about building out your team? What are some of the core values that you've brought with you? You thought about, you know, hiring folks into those roles. Well, I want to be perfectly clear, we do value diversity at Elevest so we do hire some men as well which is awesome and we embrace what they have to bring to us, I'm obviously joking, we actually do hire men but we're today, diversity is very important for us so we do have a majority female employees, our engineering team is 50% women and our overall company is 40% people of color and the way we've done it quite honestly is I just have everybody stop hiring when we go off of these numbers because for us the tilt, you know, is always to become more a bunch of white women and so that's where, you know, our majority is and we tilt towards it and my co-founder and I think you've heard this story, you know, when we were, there was an early hire where we had two individuals, one who was a gender fluid individual of color, all these amazing tattoos, Mohawk and then we had one sort of blonde hair, blue-eyed Caucasian woman and the team, you know, who was a couple levels down was tilting towards hiring the Caucasian women and I said, take me through this thinking and they said, well, it's really close, it's like 52%, 48% towards the Caucasian woman, you know, and let us, you know, she's great this way and it was like, keep talking, keep talking and I said, you know what? I think we should hire this individual of difference and I remember my co-founder saying but we have to let our managers manage, right? If you force this decision, then they're gonna feel disempowered, we're trying to build a meritocracy, you know, they know the next person, you know, should be a person who brings some diverse attributes to us and you know, I said, you know what? I grew up in a meritocracy. I grew up on Wall Street, which is a meritocracy that happens to be 90% white males, right? And I'm not gonna do it with a company that we took outside investors from with the promise that we build a diverse team and if it is 52%, 48%, it's really 30%, 70% because this team, it's their first hire, they don't understand their own inherent biases and so, and we actually got in a fight. It is rare that we fight but we got to where I sort of had sweat trickling down my side because, you know, I hate conflict but we did end up giving the individual who brought diversity to us the offer and they ended up turning us down because they said I don't see enough diversity like me in this company and so since then we've made a real overt effort. That's great and it's really great to learn more about I think just the opportunity to build entirely new types of financial firms, investment firms in the ground up just look really different from what's come before. What is important too, particularly our millennial clients is that we do look like the world that's out there today. We, you know, one of the reasons the other efforts to serve women have failed at other financial services companies is because, you know, they don't look like these individuals and it doesn't matter as much to the women who are 60 years old, it matters a lot to the women who are 25. Great and on that note, thank you so much. Thanks a lot for having us. Thanks guys.