Our Investment in Holberg Financial

We met Joe Holberg through Rob Topping.  Rob is another Chicago investor.  I never asked Rob how he met Joe but my guess is it was through the Michigan network since they are both alums.

Joe grew up in western Michigan.  He paid his way through school and went on to work for Teach for America and Google.  One day, he woke up with an idea, a cell phone and a computer and started Holberg Financial.  Ironically, my father spent his teen years in western Michigan.  I still have some family there in Three Rivers.

Holberg Financial is a financial health and wellness platform that helps employees reduce financial stress. 85% of Americans are financially stressed and 62% have less than $1,000 in savings. HF is 100% free to employees and 100% unbiased since they don’t sell data, products, or financial services. They just get people the unbiased info and support they need on their platform. They work with thousands of employees across the US already. They reduce employee financial stress by 64% which saves companies $3,200/employee/per year. Their big goal and vision is to build the financial health of America by helping hundreds of millions of Americans reach their financial goals and dreams.

We meet with a lot of entrepreneurs.  I took my first meeting with Joe driving in a car from San Francisco to Kenwood, CA.  We spoke for a half hour.  There was something different about that phone call.  At the end, I thought, this guy is bankable.

Of course, you don’t invest on a phone call.   When I got back to Chicago, we set up an in person meeting. My partner Kenny and I met with him.  He was impressive.  You just had a feeling inside your gut.

When we talked with other people, they all said the same thing.

My millennial aged kids logged onto his platform and really liked it.  There is a ton of current information for millennials and Holberg continues to pump the platform full of relevant content that impacts their lives.

Both of us felt like this was a deal we wanted to be a part of.  It fit our thesis.  Joe and his company hit all of our touch points.  This was the fastest deal WLV has ever done.

Early stage startups are about betting on the team.  Period.  Team wins.  Joe has an early stage business now that we think could become a very big one.  He’s solving a problem that is near and dear to our hearts. People around the world don’t understand the basics of finance and it causes them to get into trouble they don’t need to be in.  Joe and his team can solve this.

Holberg Financial is WLV’s fourth portfolio company and we are happy to be along for the ride.  This is a seed stage deal and we led the deal.  We have a sidecar syndicate that’s open to investors if anyone is interested.  Joe also has people that want to write checks.  Howard Tullman is one of them.  Howard met Joe at 1871.

Holberg is hiring.  Click the links above and send them an email if you are interested in helping them change the world through helping people make better educated financial decisions and relieve stress from their lives.

I will take a seat on his board.  Michael Rosenthal and Bob Pratt of Poisinelli represented us in the transaction and Drew Whiting represented Holberg.  Our analyst, Aditi Kapadia helped us out on the deal.  She is off to greener pastures working for a startup.  We were lucky to have her.

Essentially, Holberg services an underserved community.  In recent years the trend towards robo advising and micro wealth management have allowed “regular” investors access to some of the tools historically reserved for high net worth individuals.

Better tool access is great, but it doesn’t address the larger issue that many people with small portfolios simply don’t understand the basics of investing: opening brokerage accounts, how fees for passive vehicles like ETF’s work, cash flow planning for large purchases, etc.

Holberg is providing a financial teaching solution.  They want to teach folks basic techniques to build financial stability.  The problem is if they market directly to the end customer, they become yet another source of noise and confusion in an already inundated market. All you have to do is turn on the television or listen to the radio and see how many “financial planning” commercials there are.  It’s a crowded space with a lot of noise and not a lot of trust.

Holberg sidesteps this problem by going directly to the employer and offering financial education as a benefit that companies can buy on behalf of their employee.  This is one of the cheapest benefits the employer can buy, but it has a huge impact on the financial health of an employee, and their retention.  Holberg also helps them understand how to manage their finances and gives them a proprietary financial health score.  

For the employee it simplifies their life.  Bare bones financial education that is provided free to them by a trusted party.

When we spoke with some employees they said Holberg really made a difference in their life.  Employers loved it because it relieved a lot of the stress around finances that they cannot control.  Happy employees are more productive employees.

We also perused a lot of academic research on financial health in the workplace.  We looked at different studies.  Here is one that seemed to ring true when it comes to Holberg.  A few lines of the summary are as follows,

We start with an overview of theoretical research, which casts financial knowledge as a form of investment in human capital. Endogenizing financial knowledge has important implications for welfare, as well as policies intended to enhance levels of financial knowledge in the larger population.

If you are a small or medium sized business, you should be engaging with Holberg.  Providing that benefit to your employees can mean the difference between success and failure, and offering them Holberg will create loyalty to your firm.