292: From LearnVest to Inspired Capital: Alexa von Tobel’s Mission to Help People Find Financial Stability

We’ve all heard the motivational mantra that if you love what you do, you’ll never work a day in your life. But Alexa von Tobel sees things a little differently.  “If you love what you do, you’ll work every day of your life,” she says, “and it’s because I’m so passionate about what I’m doing.”  The mission that gets von Tobel jumping out of bed every morning is one that impacts every one of us—finding financial stability. Without it, whether you’re a working family or a creative new startup, it’s near impossible to plan for the long term and ultimately thrive. Von Tobel came to this understanding after graduating from Harvard and beginning a career on Wall Street, when she realized that, while she was great at managing the business finances of others, she was woefully unprepared to manage her own. And she quickly discovered that she was not alone.  That lit a fire underneath her to improve financial education, inspiring her in 2008 to launch LearnVest, a digital financial planning business that teaches investment and finances. The award-winning company became wildly popular, especially among women.  She ended up selling that business, but in 2019, van Tobel decided to take her passion for financial advising in a new direction. Today, she manages Inspired Capital, a $200 million investment firm that’s supporting early stage startups.  This massive new undertaking is all rooted in van Tobel’s desire to support ambitious entrepreneurs and help people achieve financial stability. That, and a deep love of math. Freedom to Think Bigger  Von Tobel says she was an entrepreneur from day one. She’s always been drawn to the toughest problems, outside-the-box thinking, and bringing joy to others. And when she recognized her own problem with managing her personal finances, she suspected that this could be a cause worth taking on.  Von Tobel says that 78% of all Americans live paycheck to paycheck and that the average person doesn’t even have $400 in a savings account. And the crippling anxiety that comes from mountains of debt and living one medical crisis away from going broke? She firmly believes it holds people back from concentrating on something bigger. “If you’re living for tomorrow, you can’t think long term,” she says.  Despite her lifelong love of math and her driven personality, she’d never been taught how to manage her personal accounts, invest her money, or plan for retirement. It became clear that many of her peers had not either.  “I think it’s insane that it’s not taught in every high school, college, and graduate program in America,” von Tobel says. “I mean, it’s not that dissimilar to basic hygiene.”  From von Tobel’s perspective, money is a basic lifeline that enables people to care for themselves. Therefore, she believes everyone should learn how to intelligently manage it.  That’s what drove her during her years as founder and CEO of LearnVest—the unwavering belief that financial education was a key to happiness.  “If you can create real financial stability for a family,” she says, “you can help a family thrive.” Among the strategies she taught through LearnVest were how to grow a successful savings account by setting aside 20% of each paycheck, no matter what, and the benefit of establishing firm ground rules for financial health. She taught when to begin investing (yesterday), preparing for retirement (the day before yesterday), and how to plan effectively for the ebbs and flows of life.  But what about the people (like, oh, I don’t know, the writer of this article, for instance) who are deeply terrified of math? Von Tobel says that’s not a problem.  “Personal finance is basic math,” she assures. “It’s not complicated math. It’s really straightforward math—what comes in, what goes out, is there something left, and are we saving it properly? Really, it’s more organization than math.”  After more than a decade spent as a financial educator and the sale of her business to Northwestern Mutual in 2015, von Tobel decided it was time to give something new a try.  And when her husband pointed out how many hours she had spent financially advising entrepreneurs for free, she realized she may have inadvertently stumbled upon her next big project.  Shooting for the Moon  Inspired Capital was born from von Tobel’s passion for financial education, combined with her desire to help entrepreneurs reach their goals. The result is an early stage and seed investment firm, driven by women (also led by former Secretary of Commerce Penny Pritzker) and funding startups nationally. Von Tobel now meets with at least 75 founders each week in pursuit of new investments of all shapes and sizes. From tech to product-based business, von Tobel is interested in all of it, provided they have a good idea and a plan.  She says that the best founders who have pitched her get to know her firm before reaching out. They also don’t get discouraged by rejection. Von Tobel says that just because it’s a no today, doesn’t mean it’ll be a no tomorrow.  And while founders are waiting for their yes, von Tobel says there are many things they can invest time in learning. She says that the biggest mistake she sees founders make is running away from the aspects of the business that make them feel inadequate, passing it off to others before even giving it a try.  “I think it’s the typical kind of head-in-the-sand ostrich move,” she says. “You’ve got to lean into the things that make you nervous.”  She believes this is what enables businesses to address issues before they reach critical mass, while also making founders feel capable and bold.  “If you want to build a really good business—if you want to get really good at being an entrepreneur—you’ve got to get good at everything,” she says. “And I don’t mean you literally have to hold every job, but you have to take the job, get pretty darn good at it to the point where then you know how to hire for it, and then you can pass it off to somebody better at it.”  Once the machine of a new business really starts whirring, von Tobel says that it’s essential to have an eye on building up the reserves.  “You want to make sure you are never within nine months of running out of cash,” she says. “Because if you need to go fix that, putting a plan together to go fix that can sometimes take three to six months, and you don’t want to be in a position where literally you can run out of money.”  While she acknowledges that smaller businesses can get away with slightly less in the bank, she wouldn’t recommend leaving the stability of a company to chance or dependent on a tight timeline.  And ultimately, von Tobel believes these healthy savings accounts are what embolden business leaders to take new and exciting risks.  “I’m not risk-averse,” she says. “I shoot for the moon, but I have a plan B that has enough cash...that gives me enough confidence to shoot for the moon. Having a good solid financial plan gives you the comfort to take more risks.” And the best part of all is that von Tobel believes there’s never been a better time to launch a business than right now.  “Every year it gets less expensive to stand up a company,” she says. “Every year there are better online resources to make it easier to do.”  From free online resources to highly affordable software for startups, she says founders need only do a light Google to find a flood of resources at their disposal.  As an investor passionate about the startups and founders of tomorrow, she can’t wait to see what thrilling new business plans come across her desk next. And that’s why she encourages struggling founders to keep pushing, keep growing, and keep pursuing their dreams.  “You’re building something new. You’re building something special that serves a purpose,” she says. “And that’s pretty powerful.”  Alexa von Tobel’s Tips for Building a Successful Business  Get the product right first Von Tobel says that entrepreneurs can be distracted so easily by the task of building a business and marketing a product that they forget to perfect the product. Talk to the customers. Find out what works and what doesn’t, and make adjustments. Before diving headfirst into marketing a product, she reminds entrepreneurs to really nail product-market fit.  Begin by stoking word-of-mouth marketing Rather than sinking tons of cash into a paid marketing strategy up front, von Tobel recommends that founders begin by delighting their customers and encouraging them to share their experiences with the brand. She reminds entrepreneurs that word-of-mouth marketing is free and often more effective than traditional marketing for startups.  Wait to focus on paid marketing until revenue is up Once revenue is climbing and there is a little more wiggle room, von Tobel says the time has come to give paid marketing a go.  Embrace a constant learning process Above all, von Tobel reminds entrepreneurs that the constant pursuit of growth without fear of negative feedback is essential to success.  “I think the best founders are learners,” she says. “They are comfortable with negative feedback. They want to make it better, and they are constantly just listening and learning obsessively.” Key Takeaways Why von Tobel, a Harvard graduate and Wall Street career woman, found herself struggling with her personal finances How this experience drove her to launch LearnVest, a digital financial planning business that teaches investment and finances Why von Tobel doesn’t believe a fear of math should stop anyone from pursuing financial education The sale of LearnVest to Northwestern Mutual in 2015 The mission behind Inspired Capital, an early stage and seed investment firm Why von Tobel wants to work with founders who embrace aspects of business they’re not good at The reason behind von Tobel’s optimism for the future of business