Ocho Wants To Rethink (and Rebrand) Personal Finance For Business Owners


Ocho Wants To Rethink (and Rebrand) Personal Finance For Business Owners

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Ocho Wants To Rethink (and Rebrand) Personal Finance For Business Owners
Ocho Wants To Rethink (and Rebrand) Personal Finance For Business Owners

Ankur Nagpal felt lucky when he sold Teachable for a quarter of a billion dollars. Then he quickly disappeared as he tried to navigate the financial system of the country of his birth and learn the institutional language that often only the historically wealthy speak fluently.

It would take several years of self-employment and business building before Nagpal returned to this moment as an early inspiration for Ocho in his new venture. The company, announced today, wants to make it easier for entrepreneurs to set up and manage their 401(k) retirement accounts.

Personal finance is tough, and it's a story as old and tough as the weather. And while Nagpal agrees that there is no "north star" company that has shown how to improve financial literacy, he hopes Ocho's 10-person team can have a boring sweater that can turn things around.

Ocho joins many fintech companies looking to modernize and truly transform the retirement account, away from traditional providers like Charles Schwab or Fidelity or expensive solutions like attorneys and advisors.

"I started researching the space and we realized that everyone from Robinhood to Coinbase is spending unsustainable money to get customers, but they're not making any money, and they need these big funding rounds just to survive," Nagpal said. ."

Ochon thinks the emergence of competition is the center of attention for the market. "There are so many companies targeting startups and their funding. There's a new startup every month or two, all backed by big-name VCs, but none of them focus on an entrepreneur who's doing well but isn't engaged. The bottom line. Startup founders or employees," he said. .

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Instead, Ocho leverages Nagpal's background with creative people when building Teachable. Teachable has helped creators create revenue streams, Ocho wants to help those same creators take their revenue and invest smartly, grow and grow it.

"At Teachable, we've helped these people make money online, and now there are so many places for creatives, freelancers, and entrepreneurs to make money online, but how do we help them think about creating wealth?" said Nagpal. Ocho's long-term vision is to offer more than 401(k) products that help entrepreneurs build wealth.

Human Interest is one of Ocho's closest competitors. Last year, $200 million was raised at a $1 billion valuation. Nagpal says Ocho is different because it focuses more on individuals, freelancers and creatives, rather than targeting the human needs of small and medium-sized businesses.

Now, Ocho charges a $199 annual fee to help people start their retirement accounts. It takes about 10 minutes to set up and 48 hours to get the final approval.

One big challenge for a startup is finding the right solopreneurs to fund their retirement accounts. He's looking for businesses that generate income but don't have full-time employees. If you have a side job in addition to your full-time job, you can set up a 401(k) just for the side job, but you can't contribute full-time income to your retirement account.

Image Credits: Ocho

Nagpal believes early adoption can be achieved through smart educational materials and awareness, citing personal finance trends on TikTok as an example of consumer demand for more information. About 40 percent of Ochon's employees work in marketing or education, and the balance will be maintained as the company grows, he said.

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If education is so important to Ocho's operation, why launch a fintech product? The answer is simple: time constraints. Users must set up a retirement account by December 31, 2022 if they want it in 2023, putting fintech in a related but short-term position.

Nagpal isn't worried about the 401(k) product's timeliness, as the future product roadmap includes education products, retirement product investment streams such as the ability to invest in startups and ETFs, including HSAs, which are often referred to as 401(k). ) for health care.

To fuel that ambitious product expansion, Ocho has raised $2.5 million from Nagpal's venture capital firm, Vibe Capital. The entrepreneur says he owns 20% of Ocho, which today became a reality after raising Vibe Capital's $60 million seed fund with the idea of ​​creating one or two startups from the company.

Nagpal admits that the idea of ​​a founder using the company's capital to launch his startup can seem like the "mother of all conflicts of interest." He emailed all the LPs in the fund about the investment, got a unanimous yes and collected them at a much lower price than if they had gone to the fair market. It's still rare to see founders sell the business, start a venture firm, and use the same venture firm to start their next company.

Perhaps the unique relationship between Nagpal's first company, the company, and his new venture is an indication of what his approach to personal finance might be. Multiply into multiple vehicles, redefine what the investment load looks like, and keep learning.

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Ocho home team.

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