A new Phoenix-based financial technology company currently in its beta phase is positioning itself as the Match.com for private companies looking to raise capital, according to its founder.
WealthVP, founded by Phoenix entrepreneur Leif Hartwig, raised over $500,000 from private investors in a seed funding round that closed at the end of September to build the software as a service platform that matches qualified companies — software and sustainability companies to start — with family office investors from all over the world. Hartwig declined to comment about a second funding round.
Hartwig, who also serves as WealthVP’s CEO, said he came up with the concept for his new company after realizing that the $2 trillion spent by investors each year in funding businesses is all done through word of mouth and pitch contests.
“In the U.S. alone, hundreds of thousands of cutting-edge companies need capital investment to fully realize market potential,” he said. “Less than 10% will be fully funded, and most will fail due to lack of capital. Through WealthVP, we’re making it easy for world-bettering companies and family office investors to find one another.”
The need is especially critical in Arizona.
“I believe we are one of the top three states in the country for startups, however, we have almost no venture capital money in town,” Hartwig said.
This means many startups won’t get the investor funding they need, or they will get funding from an out-of-state investor and may get asked to relocate the company, he said.
“We truly need this national and international investor community that can see these companies that we have in Arizona,” he said.
The CEO of Phoenix business accelerator Coplex agreed.
"One of the biggest barriers to growth for promising early-stage companies is raising capital,” Brenda Schmidt, CEO of Coplex, said in a statement. “WealthVP reduces the time and complexity of raising funds for founders and reduces the risk of finding qualified startups of investors. This is a game-changer."
Accepting applicants
WealthVP is currently accepting applications from 100 qualified companies and at least 25 purpose-driven family offices that are a good match for those companies during the beta phase through the end of 2020, Hartwig said. The official launch date is Jan. 2.
He said he hopes most of the first 100 companies will be based in Arizona.
Qualified companies are required to be generating revenue, have a total addressable market in the world of $100 million, have already received some funding and are seeking at least $1 million in new funding. The companies must submit an executive summary of the business, a pitch book, pro forma and a video to be posted on WealthVP.
Because of the disparity in funding, WealthVP is guaranteeing 25% to 30% of the companies selected to be on WealthVP will be women, veteran and minority founded.
WealthVP’s internal advisory board vets any company looking to be on the platform to make sure they meet the minimum qualifications. An analytics firm will then verify the information provided by the applicants.
Once accepted onto WealthVP, companies and investors are matched through the platform’s proprietary algorithm, Hartwig said. Either side can also search for entities by location, financial needs or investment goals, type of company and more. Once a match is made, investors control the conversation and can reach out directly to the companies they are interested in via a secure messaging tool, according to WealthVP.
'The industry needs us'
Hartwig said WealthVP doesn't ask for a percentage of the companies seeking investors. Companies will pay to be on the WealthVP platform on a monthly basis.
Next year, he said he expects WealthVP will open the platform to more accredited investors and private companies in varying sectors.
“We want to grow the company to significant value, but we are grounded in values," Hartwig said. "The industry needs us, needs companies like us."
Tobias Prestel, founding partner of Prestel and Partner, a global family offices forum, also called WealthVP a “game changer.”
“WealthVP is relevant in many aspects: being purpose-driven is a major one,” he said. “The focus on family offices is another — you heard the saying 'know your clients.' There is a huge need to bring together family offices and investment opportunities that serve our favorite motto: making money while doing good.”
Prior to the Covid-19 pandemic, WealthVP was leasing office space at the Industrious coworking facility at Scottsdale Fashion Square mall. Hartwig said he expects the company to go back to the coworking space at some point in the future when the virus is more under control.
WealthVP has a goal of having $80,000 in monthly recurring revenues in January, he said. The company plans to be profitable by the end of the second quarter of 2021.
WealthVP currently has six employees including CFO Todd Lawson, formerly of such companies as Commerce Signals and 41st Parameter; and chief technical officer Jeremy Wilson, formerly of Chassi and WebPT.
Prior to founding WealthVP, Hartwig spent 30 years in software startups and in the financial services industry and has raised over $200 million from private investors. He was the founder and CEO of SquadPod, a unified collaboration software as a service app and also founded Truquest, an international consulting business that helped generate billions in revenue for companies including State Farm, Nationwide and Prudential.
