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Idea Overview:
Do you remember what you got for your birthday or the gift you gave a friend or family member 5 years ago? Forgot? Me too. What if you could give and receive meaningful gifts that keep on growing that you won't forget and help others invest into their future?
My idea is for a Peer to Peer app where people can send the gift of investments to their family and friends. Users will be able to send money to a recipient brokerage account connected to the app. Recipient can then access the gift and invest it in their brokerage app.
Who might use it/where it might be used?:
Target customers: 25-65 years old, people who currently have an investment account ( apart from retirement), people who are comfortable using technology/ apps, people who are current peer to peer payment (P2P) users.
Parents, grandparents, aunts, uncles who want to invest into the next generation.
Organizations that help educate people in financial literacy can use this platform to gift investments to their students in order to help them start or continue investing.
The Market (B2B, B2C or Both):
Both
Sector the idea belongs to:
Other
Is there a similar idea to be found?:
CashApp, a peer to peer payment platform allows users to send the gift of stock via the app platform. The stock gift can only be sent to current CashApp users.
StockPile, an online brokerage, offers stock gift cards that are redeemable on the StockPile platform only.
Giftofcollege.com offers gift cards people can purchase to be redeemed into the recipient's College Savings (529) Fund.
Giveashare.com allows people to purchase paper stock certificates for recipients.
Why you think there is a demand for your idea?:
--Transferring money to someone else’s brokerage acct is cumbersome/complex (i.e. sending a check to the recipient or brokerage, sender is limited to sending money to recipient who is currently using the sender’s particular brokerage.)
--Some who have resources to invest don’t invest because they have not been exposed to it, educated, or encouraged to.
--People often give gifts that lose or decrease in value vs gifts that can potentially increase in value.
--According to a CNBC report in 2020, people are seeking out thoughtful, personalized holiday gifts in light of pandemic. → Investment gifts are meaningful and unique.
https://www.cnbc.com/2020/11/16/holiday-2020-shoppers-seek-out-more-meaningful-gifts-amid-pandemic-.html
Who would be the ideal customers?:
Parents (male and female)- 35 to 50 years old
Grandparents (male and female) - 50-65 years old
Current users of Peer to Peer Payment Apps
People who have at least one social media account, comfortable with tech
Financial literacy organizations
What ideas do you have to reach these customers?:
Instagram, Facebook, Golf clubs, farmer’s markets, Connecting with Financial Literacy organizations (events, social media, email)
How far have you developed this idea?:
I’ve researched an API I could use to facilitate the transfer of money from a bank to a brokerage. I attempted to transfer money to 7 different brokerage accounts. I was able to use this API technology to transfer money from a bank account to 4 of 7 different brokerage accounts.
I’ve not spoken to potential partners about the idea. I have spoken to people to get feedback (see more info in answer to question 8). I often speak to my husband about the idea and we plan to work together to make it happen.
What – if any – feedback have you had for this idea so far?:
I’ve spoken to my financial advisor about the idea. He is not a fan of the idea because doesn’t think that people receiving investment gifts will help them invest. He mentioned that choosing to invest is more behavioral and is related to your ability (i.e not being in debt) and willingness.
I’ve also spoken to an executive whom I met through Founders and Mentors and he was intrigued by the idea, mentioning that this idea can be partnered with financial literacy organizations.
I’ve spoken to a lawyer about the idea and he mentioned it will take much regulatory compliance.
What supporting material – if any - would you like to add to your proposal?:
GV Lean Canvas- a snapshot, brief overview of the business idea
GV Biz Model/ Value Proposition- more in depth explanation of business idea and value proposition, use cases for the idea
GV Docs- Brokerage Accts- list of # of users of some top well-known brokerages
3 comments to “Give Gifts that Keep Growing (GV)”
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Mark Cardwell - July 22, 2022 at 2:57 pm
I think I’m not entirely clear on the mechanism involved (though maybe that’s because you’re still open-minded about it).
Is it
– an app that helps you transfer money from your bank directly to someone else’s brokerage cash account?
– an e-money app that can take cash from a user’s bank account, hold cash, send cash to someone else’s app, and transfer cash to a user’s brokerage cash account?
– a custody app that can hold shares, and transfer them to someone else’s brokerage account?
Krystal Adeoye - August 1, 2022 at 9:33 pm
Hi Mark,
Thanks for your question! It is an app that helps user A transfer money from their bank account directly to user B brokerage account. The money flows from user A bank –> app balance –> user B uses the app to transfer the money into their brokerage account. It’s like Venmo for sending investment money as a gift.
Does this answer your question?
Mark Cardwell - September 3, 2022 at 11:27 am
Thanks Krystal – that’s helpful. If the app were doing e-money or stock custody, there would be huge regulatory hurdles to overcome.
If you’re simply sending money to a brokerage account, I guess the components you need to check out would be
– how will your app initiate a payment (bank transfer, direct debit, etc)
– how will your app find the destination brokerage account (taking into account privacy issues)
– what if the recipient doesn’t have a brokerage account (which seems quite likely in your target market of people not used to investing)
– what does the brokerage think about third-party payments (considering anti-money laundering considerations) – for example Fidelity UK accepts payments only from immediate family members, and the recipient needs to enter their payment details first.