The wealth gap between Black and white Americans is widening, and one major contributor is stock market participation. A recent survey by the Federal Reserve found that only 34% of Black American households own equity investments compared with 61% of white families. This has caused many Black Americans to miss out on the hefty stock market returns that contribute to long-term, generational wealth in white households. But one founder is on a mission to tackle the problem head on.
In 2020, Trevor Rozier-Byrd left a career in corporate asset management to found Stackwell Capital—a digital investment platform designed to help Black Americans build wealth through broad-based investment portfolios and culturally competent financial education. Ahead of Stackwell’s launch this quarter, we sat down with Rozier-Byrd to talk about his journey founding Stackwell and how the platform plans to take on the racial wealth gap.
What was your background prior to founding Stackwell?
I studied political science and theology in undergrad, so I really had no business ending up in finance. My first job out of college was at a law firm in New York City. The practice group I was in supported fund sponsors that were bringing new products and funds to market in the hedge fund, private equity, mutual fund and ETF spaces.
Up until that point, I would define the vast majority of my life as being focused around sports. I was a track and cross-country athlete in college and the captain of the track and cross-country teams at [Boston College]. So when I got into this environment, it was ultra-competitive and perfect for me.
I fell in love with the space and got interested both from a personal and professional perspective. I started to read personal finance books. Then decided that I wanted to go to law school at [Boston University]. I had a great experience, graduated and practiced law at Sidley Austin—the same firm I’d worked at previously.
Ten years ago, I moved back to Boston and started practicing law at Wilmer Hale. I did M&A and VC work there for a couple of years, before going in-house at State Street. There, I transitioned from the legal side to the business side, where I held a number of senior sales strategy, business development and corporate development roles. In particular, I led our acquisition of a company called Charles River Development, which was one of the largest financial tech solutions firms in the market.
I had all this knowledge and experience about building and bringing new products to market, the power of the financial markets, and in particular, what that means for people when it comes to growing and amassing wealth. And those experiences helped prepare me to found Stackwell, and have perspective about the company, culture and business model that I ultimately wanted to create.
Did you grow up in a family that talked openly about money or personal finance?
It wasn’t something that I grew up with. I can’t remember having conversations with my parents or my siblings about investing or finance, until after I was out of college. That said, looking back on it, the one example that stands out for me is my grandfather.
You hear these stories about somebody that was a janitor or a postal worker amassing a seven-figure net worth—and that was my grandfather. He was a postal worker for the vast majority of my life, but he was a very persistent saver and investor. My grandfather had a high school degree and didn’t have an advanced understanding of the markets, but he understood the power of compound interest. And whatever money he did have, he always made it a point to put some of it into the market.
Now that I’m in the process of building Stackwell, I think the thing I can take from his example is that wealth is oftentimes built patiently, and it’s something that can be built by anybody, regardless of where you come from. I didn’t understand it at the time, but I now have a ton of appreciation for what he was able to accomplish as someone from his generation.
| “ | Now that I’m in the process of building Stackwell, I think the thing I can take from his example is that wealth is oftentimes built patiently, and it’s something that can be built by anybody, regardless of where you come from. I didn’t understand it at the time, but I now have a ton of appreciation for what he was able to accomplish as someone from his generation.” |
What was your first exposure to the stock market and investing?
I didn’t have any perspective on investing or the markets when I was growing up. I also didn’t study finance in college, and just kind of fell into a job unexpectedly. But I had the fortunate opportunity that one of my best friends’ fathers was a financial advisor. One night after work he sat me down and explained to me the power of long-term passive investing—that it’s not about trying to time the market, it’s about time spent in the market. That it’s not about how much money you make, it’s about how much you save right now. That was the catalyst for me to get out there and start trying personally.
And at 22 years old, I started to invest. The process was so self-reinforcing, because here I was, working a job with crazy hours in New York City. And then I would check my Yahoo! Finance account, and it was like, “You made $300 today.”
I’m 39 years old now and it’s just something I do. It’s part of who I am.
When did you realize how powerful these mediums could be for addressing the racial wealth gap?
I’ve always been attuned to the opportunities that I’ve had and how they are often different than what other people in my community have experienced. What has come with that is a strong desire, and frankly, a sense of obligation, to give back and create access to opportunities for folks that look like me. Throughout my career, I’ve had various ideas for business opportunities I could pursue, and they have always centered on finance and wealth for people in the Black community.
Two years ago when I started to work on Stackwell everyone was talking about the racial wealth gap like it was some new thing—which it’s not—and solutions to help solve the problem. And it seemed to me, there was a glaring hole related to investing.
Everybody wanted to talk about basic financial products, like banking. Yes, 50% of the Black population is either unbanked or underbanked, and we need better solutions. But a bank account alone can’t help you build wealth. I felt like I was sitting here with all this knowledge and information about how the process actually worked, and what mediums people were utilizing to amass more wealth, but we were only addressing the problem superficially.
To me, the racial wealth gap is the social justice issue of our time. I think it directly impacts every other material issue that people care about in Black and Brown communities. You think about things like access to affordable housing, health care, quality education, food insecurity issues. All those things are directly impacted by a person’s access to capital, or lack thereof. I think the notion of solving for the wealth gap is important. Because if you can give people access to a bit more capital, they will have greater agency and control to direct the outcomes that matter pervasively in their lives.
| “ | To me, the racial wealth gap is the social justice issue of our time. I think it directly impacts every other material issue that people care about in Black and Brown communities. You think about things like access to affordable housing, health care, quality education, food insecurity issues. All those things are directly impacted by a person’s access to capital, or lack thereof.” |
The final thing that I will say, and the reason why I personally really like the financial markets, is that they are fundamentally fair. There is no gatekeeper to the financial markets, unlike potentially going down the street to your local bank and running into a loan officer who can say, “Not for nothing, I’m not going to give you that loan.”
No one can tell you whether you can open a brokerage account and start to participate in the market. And once you’re there, you get the same access to returns as everybody else. And so, I wanted to help expose those opportunities, and give people the tools to take matters into their own hands, and really direct their own futures.
What are some of the barriers the Black community faces with investing?
Only about a third of Black families in the country today own stocks, as compared to almost two thirds of white families. And we know that the relative performance of the S&P 500, as an indicator of stock market performance, is up 280% over the last decade. So, the lost opportunity by people not being there is massive. You would think that those types of numbers would cause more people to participate, but it doesn’t. You have to ask yourself why.
What we have been able to glean is that there are a few main barriers that cause people to sit on the sidelines.
First, it’s not knowing where or how to start the process. So, you’re presented with a universe of 10,000 listed securities. How do you decide what is the right investment for you to make?
There’s also this strong sense that you need to have a lot of money. Or that you need to have a certain level of sophistication in and around the investment process, in order for you to be pre-qualified to participate.
And one of the strongest factors in all of this is the notion that the stock market is all about gambling—that it’s about buying low and selling high. That it’s this inherently risky proposition that is only about short-term wins. And we know that everything that I just described could not be further from the truth. So that’s why I think it’s really important to give people a better education and understanding around how really it works.
What is Stackwell Capital, and what unmet need or innovative solution did you seek to address through founding it?
We set out to build Stackwell to intentionally address and remove the social, emotional and cultural barriers to entry that exist within the Black community. We start by delivering a robo investment product, which enables people to model investment portfolios, based on broad-based index ETFs, aligned to their risk profile, investment objectives and investment time horizon.
We then pair this with access to financial literacy and investment education material that is delivered in culturally competent ways. So, we think about imagery, use of language, and the examples that we’re using. I think cultural competence and representation really matter. We want to make sure that people do not feel “othered” in this process, so that they start to understand that this is a space in which you belong, and a space in which you can be successful.
The final thing that we do is help people model and shape the effective behaviors that are required to ultimately persist along a path and stay committed. To not only put their money into the market, but not get skittish when there’s short-term volatility. We know that fundamentally, the most important factor in this proposition is time. If we can get people to start early and stay committed, they have a greater likelihood to build wealth over time.
From a price point perspective, our product is accessible up and down the income spectrum for people within the Black community. We charge a dollar a month on a subscription basis; our investment minimum is $10. We want to make sure that we can bring in as many people as we possibly can, to dispel the notion that investing is only for wealthy people.
What have you been most surprised by in your transition from previous corporate roles to your current role as a founder and entrepreneur?
I have become more flexible as a person and a professional. If you think about my background, there was never any margin for error. The notion of founding a startup, where you’re going to test and research and iterate, couldn’t be further from the background I had as a professional. Being able to understand and contextualize feedback, and getting to a place where you can rely on the things that you did well—and live with the outcomes along the way—I think has made this process a little bit easier.
I’ve made a conscious decision to be really honest about what my experience is like. I think there is value in that. I have a lot of frustration about founders and venture investors that project that you went from idea to unicorn company with no stress and strain in between. That’s not how this works. If I can be honest about me going through it, the ups and downs that I feel and the uncertainty that I have with the process, I think other people might be able to derive some level of strength from it.
There are so many reasons why the work that I am doing is important, but one of them is that there needs to be more people that look like me that are taking these chances. I feel like I have an obligation to encourage and empower the next generation of company builders and leaders that are coming behind me, so that they know that they can do this, too. The only way that I can do that is if I am open about my process.
What was your fundraising journey like—did you face any roadblocks? Do you have any helpful tips to share with other founders?
The fundraising process is always ongoing, and it’s been one of the most interesting parts of this process. As a founder, your job is to sell a vision, communicate a story and get people to buy in. The reality of it is you shouldn’t be able to convince everyone because if you could, then your thing would be so obvious, and there would be no market opportunity. And while objectively that sounds true, it can be hard in the moment, when you’re going out and pitching this thing you really care about.
Showing up every single day, regardless of what the feedback is, regardless of what the outcome is of any one individual meeting, is a really, really hard thing to do. As a track athlete, there’s this notion that you’re going to run and train every single day to perform and win races, or run a time by the end of the season. But there are all these other variables. The weather could be bad, the race could not go in your favor—anything could happen. But you continue to persist, and I’ve brought that mentality to the fundraising process.
I think you should look at every conversation as an opportunity to receive feedback and get better. While I may not have liked all the feedback that I’ve gotten, I always try to disassociate myself from it personally and say, “Okay, what can I do to get better? How do I continue to refine my approach and process? How do I leverage my strengths to better position myself and this company?”
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Note: This Q&A has been edited slightly for length and clarity.
