This new app is helping Gen Z invest in cars, food, video games and other ‘features’. • TechCrunch

Michael Haddix Jr He is a former college basketball player who majored in pre-med until he discovered investing after completing his undergraduate degree.

After being exposed to it, Hadix He said he was “excited” about the investment and that he could have worked in the field with an MBA from Columbia Business School. After graduate school, he began working at Goldman Sachs, an investment bank, and then as a financial advisor to NBA stars Chris Paul and Stephen Curry, as well as Olympic swimmer Michael Phelps and Olympic gymnast Aly Raisman.

It was then that Haddix realized he had a passion for teaching athletes. And he turned that feeling into a company Power 3d.

“I told myself, ‘I’m going to go to colleges and pro sports teams and teach finance and invest 101,'” Haddix recalls. “When we do that, we ask, ‘Where do I start now? How do I do this?’ ”

And so the idea Scout – A different investment app – is born.

Haddix joined On Deck as a co-founder and met the co-founder and CTO there. Cindy Rod. The couple married in 2010. In 2020, they teamed up to build Scout — an alternative to what Hadix says are retail investing apps that offer “no guidance” or old-school institutions with a “set it and forget it” mentality.

“We knew there had to be something better for people looking for guidance and someone to hold their hand,” Haddix told TechCrunch. “There’s a lot of information out there and some people don’t know what’s good, what’s bad, or how to act.”

In short, the goal behind Scout is to make investing more fun, less scary, and more educational. The company’s long-term goal is to help people — especially Gen Zers — build responsible, repeatable investment habits by “encouraging participation in a variety of portfolios across themes or funds that individuals feel align with their interests and experiences.”

So what exactly does that mean?

Scout gives its users a way to invest in buckets based on their needs. Once a person registers on the platform, they are asked to share their personal investment goals and risk tolerance. They can then “scout themes” or select funds based on their interests to create a personalized portfolio. That strategy led to the company’s tagline, “Invest in themes, not memories.” The company combines those themes with a variety of other U.S. stocks and U.S. municipal bonds, the “Scout Starter Pack.”

Scout Themes/Funds currently includes 15 different options, though Haddix says the company plans to add more regularly. Existing themes include “I love college,” for example, which includes companies in the American food and beverage industry that specialize in fast food and alcohol. Another theme is “The Love of the Game”, which includes companies that develop or publish video games, stream or download game/email content, or manufacture hardware used in video games and e-mail. Other themes include So Glamorous, companies that sell clothing, luxury goods and other consumer retail products such as handbags, shoes and jewelry, and The Open Road, which includes – you guessed it – companies involved in the development of self-driving cars, electric vehicles and their components and materials.

It then provides users with a “Scout Report,” which provides insights into why the scout team is spending each of their money.

The startup is banking on the belief that Gen Z investors will participate in the market faster than ever before.

“They become overwhelmed and confused by the boring rigidity of financial advisors, and ultimately lose interest in starting and continuing their investment journey at a young age,” Haddix said. Or with low guidance and single-stock ‘casino/day-trading’ brokers who are overwhelmed by the bright lights and excitement and can lose huge amounts of money before losing interest in the markets.

The Scout app came out of its private beta program in August and is now available in the Apple App Store. During the beta period, the company enrolled thousands of students on more than 17 college campuses. This move was in line with a go-to-market strategy that began targeting college students, including athletes and athletes, while hoping to make ambassadors from influential people on campus. (Maddix’s father is a former NFL running back.)

Interestingly and specifically, Scout does not make money by charging transaction fees. Instead, it charges users with less than $1,000 in assets under management (AUM) $1 per month for a subscription. For larger accounts — over $1,000 — the startup takes 1% of AUM.

The low barrier to entry is intentional. The company is pursuing what it sees as a huge total addressable market with low customer acquisition costs.

“We want to get people in the door, and we want convenience,” Haddix told TechCrunch.

The hope and expectation is that you will invest more money over time.

As part of helping users stay comfortable, Scout provides daily monitoring and balances accounts monthly. It does not want its users to be confused by the changing macroeconomic environment around them.

“When the market changes, when things happen, when the Fed raises or — hopefully in the future — interest rates start to rise, or their life circumstances change, we make sure we’re managing portfolios to make sure people are still in the same risk bucket, and their allocation is still where they want it,” Haddix said.

To continue growing the user base, The company is also exiting a $2.6 million seed round led by Chingona Ventures, along with BDMI, On Deck, One Team, Reach Capital, Gaingels, Hustle Fund, Alive VC and Broadhaven Ventures. Several high-profile angel investors also invested in the round, including 12-time NBA All-Star Chris Paul, Super Bowl champion Vernon Davis, early stage investors Tim Fong, VSC’s Jay Kapur, and athletes Jimmer Freditt and Kyle Hines.

Chingona Ventures Founding Partner Samara Mejia Hernandez said her firm prioritizes investing in founders from non-traditional backgrounds who “bring unique perspectives to clients that will give them a competitive edge.”

She believes the company’s strategy of targeting Gen Z at colleges by leveraging campus influencers like athletes is compelling and unique.

“Michael is from this community and has spent most of his professional career advising this group on their financial matters,” Hernandez wrote in an email. Now he wants to expand this with technology.

She added: “The Gen Z community has a desire to invest, you need to give them a platform to do so while educating them on what you are doing and helping them share their investment with their friends.

NBA player Paul said in a written statement that financial education and encouraging young people to make it a priority is “always important.”

“I have the privilege and responsibility to use my platform to deliver this life-changing message to everyone,” he added.

Recognizing the benefits of having ambassadors that users know and look up to, Scout also partnered with several professional athletes including Travis Kelce, Ali Krieger, Elena Delle Donne and CJ McCollum to promote the investment app on social media.

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