Founder Profile: Rocket Dollar

Rocket Dollar was founded in early 2018,  and we launched our first product at the end of Summer, 2018. We’re coming up on our second anniversary in early February.  

The idea for the business came about when we realized that there is over $$10T in old 401(k), and IRA accounts in the US, and over 98.5% of those assets are invested in only public stock/bond/mutual fund type investments. By the way, the $10T is growing rapidly too.

We currently offer two types of accounts at Rocket Dollar, the Self-Directed Solo 401(k) (launched in March 2018),  and the Self-Directed IRA (launched in June 2018). Both accounts are available in Traditional (pre-tax contributions) or ROTH (post-tax contributions).

If we are considering all self-directed IRA providers widely, then our largest competitors are Pensco, Millennium, Equity Trust, but they operate on different business models than Rocket Dollar.

If we consider the market of start-up tech-enabled companies providing a near document less online customer experience, and platform, then our closest competitor would be Alto.

Our business model is somewhat different than the industry as a whole, as Rocket Dollar is a tech-enabled, flat-fee, self-directed IRA with checkbook control (as opposed to a strict custodial model where the custodian makes all transactions on behalf of the customer).

On October 1, 2019, Rocket Dollar launched a new, premium-level product at a premium price. With this launch, Rocket Dollar has two service, and pricing levels for IRA, and 401(k) accounts. The product that we introduced last year, and are currently offering is now Rocket Dollar Core (a few features were removed from the Core level). The new, premium product is branded Rocket Dollar Gold (press release). It has enhanced services, and for the first time, tangible Rocket Dollar branded items – checks, a logo checkbook wallet,  and a Rocket Dollar debit card will be provided to customers. The Rocket Dollar Core offering will remain at our current pricing model of an upfront $360 sign up fee, and $15 per month recurring revenue compliance fee. The Rocket Dollar Gold account level is priced at an upfront $600 one time sign up fee, and $30 per month recurring revenue compliance fee. Rocket Dollar Gold customers will receive expedited account opening, and funds transfers, phone support, an initial supply of Rocket Dollar logo checks, Rocket Dollar branded debit card, an allowance for free wire transfers,  and year-end tax form preparation.  

Rocket Dollar is an online provider. We have an online platform, and customer service

support emails, and calls. We have an affiliate channel through Commission Junction.

The sales team is exploring outbound sales programs in Q1 2020. To date, our efforts have focused on digital signups.

• Expand Affiliate Marketing Program, and support affiliates with content
• Write a long-form article every month about a content marketing topic that resonates with our audience
• Be more disciplined, and apply a project management approach to conserve resources in
• marketing, and use more effectively.
• Send a must-read email newsletter that shares helpful resources, and engages with subscribers twice a month
• Use Pay-Per-Click Advertising to boost product sales
• Be smart, and utilizing an Event Marketing strategy to engage, and attract new customers with both online, and offline events

We are about to pass $100m in Rocket Dollar accounts, and customers in all 50 US states.  

Rocket Dollar has a core guiding focus: to be the fastest, and most efficient provider at setting up, funding,  and making alternative investments within tax-qualified accounts. Over the next 2-5 years, the company will have the most tools set up to allow customers to completely self-service their accounts digitally.  It will offer a completely diversified marketplace of alternative, and private investments. An appropriate analogy would be to characterize Rocket Dollar as the Fidelity of the 21st Century.

Rocket Dollar has traction in setting up an affiliate program consisting of investment product partners, personal finance websites, blogs, podcasts,  and newsletters. In pursuing our B-B-C strategy, Rocket Dollar is beginning to work with large-scale partners, including one with 30m monthly site visits, to create custom content around self-directed retirement accounts, and alternative investment asset classes. This relationship has been formalized,  and the content will begin to roll out in 2020.

Our target customers are individuals who have over $50,000 in IRA/401(k) type investments. Our customers are average age 39 years old, 70% male/30% female,  and have an average of over $100,000 with Rocket Dollar.

*Pain point:*

We let people tap an often overlooked source of capital (traditional stock/mutual fund investments) in an IRA or 401(k) to make alternative investments. The private, and alternative investment markets represent over 70% of the total available supply in America today, yet most Americans have the vast bulk of their investable assets tied up in only public market securities.

We have a well-rounded team, and segment groupings into product/tech, marketing/sales,  and operations. Our goal would be to add additional product/tech folks to develop more robust customer self-service tools, and add headcount in partnership sales to keep adding large scale distribution, and alternative asset product partnerships, and providers. This will take place in the second half of 2020 based on our current modeling.

Crowdfunding is currently one of the most utilized investment strategies amongst our existing customers at Rocket Dollar. It is a perfect example of a new age investment strategy. Running a campaign ourselves is an ideal way to bring awareness to the next level way to invest in crowdfunding opportunities: by deferring taxes for several years. We will use the funds to develop additional self-service tools, and build infrastructure to become an investment marketplace so people can genuinely create a diversified, hyper tax-efficient account with private alternative investments using Rocket Dollar.  

Rocket Dollar certainly has a line of sight to becoming a self-sustaining entity. However, we think our business would be attractive to companies that either manufacture/distribute alternative investment products, and also provide financial services to affluent mass customers. We’d say that Goldman Sachs would be an excellent potential acquirer as an exit opportunity.