LendTable Ycombinator Startup - would you use this?
VC & Private Equity Firm
ishmael20
Sep 1, 2020
4 Comments
https://www.lendtable.com/
I've been following this startup for a while. The co-founders seem solid and they're backed by Ycombinator and other VCs. Their value prop is they help you earn more money by lending you money to pay for your 401k contributions if your employer does 401k matching.
I see it being more useful for people who can't afford to put it 401k funds, but do you see this working for most Silicon Valley companies? I would assume that most people in tech make enough $ to afford to contribute to their retirement, but I could be wrong. #investments #personalfinance
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Their wording of the loan is also highly suspect. Something about it just gives off the sleazy sales vibe like they are trying to trick you into buying.
With that being said though, you're completely right. This is a product that is predominantly for the rest of America. Folks who aren't making the crazy high-salaries that you see in San Francisco and are worried about liquidity and being able to make ends meet.
Funny enough though, I actually came up with the idea whilst at Dropbox. I had just dropped out of school and came out to SF to work at Dropbox as a ML PM (a year ago). Got my 401k match, thought it was dope, was shocked that almost none of my friends were using theirs. I thought they didn't understand how it worked, so tried explaining it. They made it clear that's it's not that they didn't understand it, it's just that they just moved out to SF rents expensive...etc. They just outright couldn't afford to take anything out of their paycheck
So that's how the idea came to be, people have this incredible asset a "401k Match". However 25% of the working population doesn't use it. If we can just give people the liquidity to get it, we don't need a credit check, variable fees, compounding interest. We can just do a one time fee of 15% and help people get 85% of their 401k match without having to take any paycheck reduction or take any hit to their income