Introduction
Through investment clubs, individual investors can pool funds and grow wealth as a group. Group activities can get complicated, though — especially with money involved. Bad management and poor communication can make investment clubs difficult and stressful.
Tribevest aims to make group investing a viable option. Tribevest is a one-stop platform for smooth and transparent group investing. Everyday investors can pool capital, invest in whatever asset class they choose, and stay connected and organized. We reached out to Tribevest co-founder and CEO Travis Smith to learn about his own group investing experience and upcoming product features.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
In your own words, how would you describe your company?
Tribevest is disrupting the way people invest. It’s no longer only a single-player game. In a safe, easy, and transparent way, Tribevest gives friends, family, and like-minded people the ability to invest as a group. They are changing the game for those starting their wealth journey and for the most experienced investors to get into more deals, leverage knowledge, and “level up” together — as a tribe. With Tribevest, we no longer have to do it alone.
What inspired you to take the leap and start this company?
About a decade ago, my three brothers and I came together on a trip where we shared our desire to obtain financial freedom for our families and future generations. We knew we couldn’t do it alone. So we decided to begin pooling our money starting with $500 a month per person, which led to our first $24,000 down payment on a real estate investment.
By forming and funding that small group, we took ownership of a future that we could have never imagined. But our master plan almost never happened. Banks looked at us like we were crazy when we told them our idea of automatically saving together. Forming an LLC, creating an operating agreement, and opening a joint bank account were some of the hurdles we found unbelievably difficult to navigate. It took hundreds of hours and thousands of dollars. We made it through and have since built a multimillion-dollar portfolio of various alternative investments.
We learned so many lessons to get to that point. Then, we had the “aha” moment where we realized there must be a better way for friends and family to invest together. That’s when I decided to leave my comfy career and leverage my financial tech experience and network to start Tribevest.
How is Tribevest transforming the investment industry?
Pooling resources to overcome barriers and achieve more is nothing new. Wealthy families have leveraged economies of scale for centuries. For the wealthy, outsourcing the administrative process to pool their money may cost tens of thousands of dollars. But that is a drop in the bucket when considering the tens of millions or hundreds of millions of investments for each group.
Most of us don’t have existing lump sums of capital to finance the process to set up and manage an investor group. As a result, the power of numbers was reserved for the rich. Investing for the rest of us was very much a solo-player job.
The average investor is looking at investments under $100,000. Before Tribevest, the effort and cost of launching and managing an investor group were too much of a burden for such a small venture. As a result, we built Tribevest. Now, in less than 48 hours, your group can quickly align and assemble, start a multimember LLC, and bank together, all in one easy-to-navigate place.
What was a solo-player game is now a multiplayer wealth-building experience. We call it tribe-vesting. Average investors won’t be restricted to traditional brokerage investments or limited to their 401(k) accounts. Now, they are ownership partners in their own investor business and can achieve wealth that they couldn’t or wouldn’t as a solo investor.
What are some regulation hurdles that your company has to face and how do you overcome them?
We are currently staying clear of the regulatory hurdles of the SEC and banking industries, as we do not provide investment advice or custody funds directly on Tribevest but do so through a banking partner. We provide a software management solution for a legal entity. In its current state and for the foreseeable future on our product road map, we will not be subject to the regulatory bodies.
What does your product pipeline look like for the next few years?
We are very excited for our product pipeline in the coming years. We are going to be adding additional complementary features to our current solution set. Two of our most highly requested features are a mobile app and assistance with K-1s, and we are excited to have both product initiatives in our pipeline.
What does the competitive landscape look like, and how do you differentiate?
We differentiate ourselves as being the premier collaborative investing platform for private assets. There are a few collaborative investing platforms out there for the public markets (Webull and Public) and a few platforms for the solo angel investor in a variety of asset classes (AngelList and Pacaso), but we cater to group investors and are asset class agnostic, as we provide the software management layer versus directly providing the investments.
How do you intend to use the money you raise this round to scale the business?
The funds for this round will be utilized to scale our acquisition channels, as we have spent the last year or so largely dedicated to product and community development. With our product in the place it is today, and with clearly defined and efficient acquisition channels, we are looking to grow into a Series-A-ready company with a $1.5 million to $2 million annual revenue run rate by the fourth quarter of 2023.
What do you want potential investors to know about you and/or your company?
Many companies at our stage look to build products that have one or two attributes: retention and virality. Our software is naturally retentive, as a legal entity must stay compliant with its state of domicile by filing annual reports, renewing registered agents, and all the matters related to voting. As such, the annual retention numbers for our software subscriptions are considerably higher than most software companies at our stage.
Our software is also built on a backbone of collaborative investing and bringing in other people to join a tribe on a deal/investment. On average, we see four to five new members join a tribe for every one that is created. This natural virality is another core strength of our software platform.
And lastly, because of the movement that we have started and that our tribe members believe in, they clamored for the opportunity to invest in Tribevest directly. They believe in our mission and vision and want to be able to participate in our growth. As such, we launched our crowdfunding round to enable that participation, and we have been thrilled to see our greatest advocates and fans (our customers) invest meaningful amounts of their capital into Tribevest. We are beyond lifetime value with Tribevest, and the story is just getting started.
As you think about the business five to 10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for the company?
There are a few natural paths for Tribevest to grow and provide successful end results for our investors. One path could be an acquisition by a larger, more established player in either the collaborative investing space or the private assets space. However, our desired outcome, at this stage, would be to ring the bell on the New York Stock Exchange with an initial public offering (IPO). An IPO would likely be toward the tail end of that timeline, but if our success brings forward an opportunity for an IPO sooner, then we would be thrilled with that outcome as well.
We look forward to seeing where Travis and his team take the company. Tribevest is currently raising on Wefunder.
