LendTable Ycombinator Startup - would you use this?

VC & Private Equity Firm
ishmael20

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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TOP 4 Comments
  • New
    djsjjdhn

    New

    djsjjdhn
    So they basically loan you money. I am not sure what the innovation is and there seems to be very little moat around their business. Someone can copy their entire business model with little effort.

    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.
    Sep 1, 2020 0
  • Financial Services Company
    gxnv32

    Financial Services Company

    gxnv32
    Hey this is one of the co-founders of Lendtable here (Sheridan)... First off, thanks so much for all of the kind words!!! So we have a bunch of clients who we work with at Facebook, Dropbox (My co-founder and I both worked here), and a bunch of other companies in the valley.... Predominantly it'll be less technical roles, so if you make <$120k a year, there's a very good chance you don't have the money to be able to take $6k out of your paycheck since Cost of Living is so high (especially because a lot of these companies offer pretty incredible matches, so sometimes you'll need $10k+ to get the full match.

    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
    Sep 18, 2020 2
    • This is so interesting
      Feb 21, 2021
    • New
      NXQv67

      New

      NXQv67
      Sorry but this sounds like a very unethical tool for people who can’t afford it. Essentially a high interest rate loan with a monthly fee. Then you can’t leave your employer or you are hit with a huge bill that you can’t withdraw without a penalty.
      6d