EarlyBird CEO on crypto investing: Families should have 'equal access to a holistic portfolio'

EarlyBird Co-Founder and CEO Jordan Wexler joins Yahoo Finance Live to discuss the platform's goal to help families invest for children's futures, introduce crypto to kids, and the potential of digital asset regulation.

Video transcript

ZACK GUZMAN: Welcome back to Yahoo Finance Live. You know, there have been a lot of prices that have gone up in the last year. But if you look at one thing that actually hasn't risen as high as we've been expected or have been used to, it's the cost of education. But that doesn't mean it's not necessarily a good time to be putting off investing in your child's future, of course.

And our next guest here is the CEO and Co-Founder of a fintech startup looking to help make that easier for parents out there. Jordan Wexler is the Co-Founder and CEO at Earlybird, and he joins us now. And, Jordan, we're talking about ways to make this easier for parents. And of course, maybe just backing up, it's all about investing for the future, whether it is through a 529 plan, whether it is through something else.

You're trying to make more money so you have more money down the road to pay for your kids' education. Talk to me about what you've been seeing on your platform.

JORDAN WEXLER: Yeah. So Earlybird is a investing platform that empowers family and friends to collectively invest in the kids that they love. And what we've been seeing is that it is so critical for families to start investing from day one-- so really making it that checklist item when you have a child, you go buy the baby book, you buy a crib, and you really should set up an investment account to make sure that you can capitalize on that lifetime of compounding interest for these investments. So we've really decided to target that 0 to 5-year-old demographic and provide both the capital and the knowledge so that families can build a better financial future for their kids.

AKIKO FUJITA: Jordan, in terms of the money, the investment that parents set aside in the early years of their kids, how much of that should be exposure to crypto? How much of that should be in more traditional funds?

JORDAN WEXLER: Yeah, it's a great question. So what we believe is that it's critical for all families to have equal opportunity, equal access to a holistic portfolio and to make sure that as they build their investor profile-- so they really look at their risk tolerance, their time horizon, their investing experience, and their knowledge-- that we collectively can help to build a diversified portfolio that really has exposure in both public markets, crypto, and a multitude of different digital assets that we believe are going to be critical components to what the future of investing is really going to look like.

ZACK GUZMAN: And you have backing from the founder of Reddit as well as the Winklevoss twins, and maybe not surprised to see a push on crypto being included if you do have support from the Winklevoss twins. When you look at that, I mean, obviously, people like 529 programs because it's tax-advantaged IRAs, similarly tax-advantaged.

When you look at, I guess, how that weighs into some of these returns-- obviously, you have to pay the IRS quite a dent coming out of those savings overall. So how do you maybe see that as maybe an important reminder for everyone as we start the new year?

JORDAN WEXLER: Yeah, so we believe that-- one of the core missions of Earlybird is to democratize access to generational wealth. And it is so important to really look at, what is the future going to look like, right? Really making sure that we have this on-ramp of public market account investing-- so at Earlybird, you have these managed portfolios-- five fixed managed portfolios that allows for those 70% of American families today that are not investing in their kids to be able to get in, and get involved, and get started from day one, and then to really create that access and exposure to, what does the next 10 to 15 year really look like?

And what are going to be the winning digital assets-- if it is cryptocurrencies, or NFTs, or whatever that might be-- to ensure that all American families have that equal access and that they are really following the best practice on investing, which is dollar cost averaging. So figuring out how much can I put away every month, and then making sure that that is on a consistent basis-- so if it's $25, to $100, to $1,000 and making sure that that money is being invested on a consistent basis so that when your kid turns 18, they really have this incredible financial foundation that creates financial freedom and really allows kids to pursue their dreams-- if that is higher education, or if that is maybe traveling the world, or whatever they might want to do. We want to ensure that Earlybird provides that freedom.

AKIKO FUJITA: And, Jordan, I've got a question for you in terms of what's happening on the private funding side. There's a story in the "Wall Street Journal" talking about how many venture capitalists are just flush with cash. $93 billion is the amount of money that was poured into early stage startups.

I know you're not necessarily early stage. You've been around for several years. But how easy has it been to be able to raise money in this current environment? You've already got some big name backers, but give me a sense of if you've seen a bit of a shift here in VCs, you know, a lot of these investors maybe willing to jump in a little earlier to fund companies that aren't necessarily established yet.

JORDAN WEXLER: Yeah. I think that the idea of funding stages and rounds has definitely drastically changed over the years. What a series A might be two years ago now is considered a seed round stage of funding. We raised our seed, which was a $4 million round, led by 776, with strategic follow-on from Gemini's Frontier Fund.

And with that round, it really empowers us to take the next big leap, which is really looking at explosive growth and making sure that our platform can be adopted by hundreds of thousands, if not millions, of American families. So I think that, really, venture capital is finding these unique opportunities And with, of course, the flush of capital, they're able to really take earlier bets today than they ever have been.

ZACK GUZMAN: Just one last one too on crypto in terms of the roadmap there. Obviously, we're seeing regulators still kind of parse through what everything is supposed to be in terms of looking at the sector as a whole. I'm not sure if that maybe makes it more difficult for you guys to allow people grandparents and the gifting piece of early bird to really play a part in that. I mean, what are you expecting as you move forward through 2022?

JORDAN WEXLER: Yeah. I think it's going to be critical that everyone continues to be really careful and smart on what is going to happen, as no one really knows. And so for Earlybird, we are not making a bet on one particular cryptocurrency and/or one particular digital asset.

But what we are really looking at is making sure that we position all American families to have the accessibility and exposure to all these different investment classes that are going to start to continue to take over, as it's already been transformative in the impact that blockchain technology has had disrupting a ton of industries. And looking at the next 10 to 20 years, we just want to make sure that all American families have access to these investment opportunities, as that is the most critical thing in building generational wealth.

ZACK GUZMAN: Jordan Wexler, the Co-Founder and CEO at Earlybird, appreciate you coming on here to chat with us today. And Happy New Year. And thanks again for taking the time.