Eininvest
Introduction
Spencer Jaffe, Wharton MBA '23, had a friend in private equity who co-invested so much of her salary with her fund that she didn't have enough money to pay rent. Spencer offered to loan her some money in exchange for a share of her equity but she turned him down - her shares had such high growth potential that she chose to take out a high-interest personal loan rather than give up any of her equity. This introduced Spencer to the lucrative world of alternative investments, which he quickly learned was nearly impossible to access as a non-accredited investor.
Mariama Diallo, Wharton MBA '23, was working as an Investment Banker and becoming increasingly frustrated by the limited investment opportunities available to her. When Spencer and Mariama met in the same cohort at Wharton, they quickly realized that they shared the same frustrations over the exclusivity of alternative investments and set out to fix it with their new company, Eininvest.
Industry
Currently, investment opportunities in private equity, venture capital, and other alternative assets, are limited to accredited investors. However, only about 10% of American households are accredited. This limits the other 90% to investing in the public market. Over the past decade, private equity investments averaged 11.5% annual returns and venture capital averaged 15%, while the S&P 500 pulled in only 5.5% in the same period. The private market returns regularly outpace the public market by a significant margin, leaving the majority of Americans behind while the wealthiest investors get wealthier.
With inflation off the charts and the economy constantly in flux due to the pandemic, Americans need ways to reduce investment risk. Many alternative investments have low correlations with the public market which means that in addition to higher returns, they offer investors the opportunity to diversify their holdings, insulating their portfolio from the risks of the turbulent economy.
Mariama and Spencer are building an easy-to-use, blockchain-enabled platform that will enable individual investors of any accreditation status to invest as much (or as little) as they’d like in alternative investments. Each investment will be selected and vetted by the company – the founders are so confident in the strategy that they intend to co-invest in each investment they offer. They will work directly with venture capital and private equity funds to tokenize an allocation of their funds that individual investors can then purchase on the Eininvest platform.
What's Next for Eininvest
Spencer’s experience in corporate strategy and marketing complements Mariama’s finance background making them an ideal founding team for a startup in the fintech space, and investors have noticed. They were recently accepted to Antler Capital’s incubation program where they are part of an inspiring cohort of fellow entrepreneurs using Antler’s resources and expertise to build the next generation of companies.
Spencer and Mariama will spend the next few months negotiating terms with private equity and venture capital firms for their first round of investments and developing their investing platform. They are currently accepting interested investors to their waitlist.
About the Founders
Mariama Diallo was born and raised in Guinea before moving to Kentucky to attend high school and then college at the University of Louisville. She’s been interested in finance most of her life, and even credits watching Bloomberg for helping her learn English. Prior to attending Wharton, she worked in investment banking as a generalist at Goldman Sachs.
Spencer Jaffe was born and raised in New Canaan, CT, and attended the University of Pennsylvania for college. Before returning to Philadelphia to pursue his MBA at Wharton, he worked at IBM in corporate strategy and Youtube ingrowth marketing. His interest in investing started in high school, where he co-founded his high school’s investment club.