FinTron targets users with zero investment experience
Startup co-founded by Sacred Heart University grads aims to offer comprehensive finance app
Wilder Rumpf, co-founder and CEO of Westport startup FinTron, laughed as he recollected one advisor’s interpretation of his company’s logo: the letter “F” stylized as a phoenix beating its wings.
“Rising from the ashes ... of the dumpster fire that was your personal finance,” Rumpf said. “We’re targeting young people who have zero investment experience.”
FinTron, co-founded by recent Sacred Heart University graduates Rumpf, Matthew Fatse and Adam Pulcyn, will soon launch a personal finance app that combines savings accounts, checking and debit cards through an affiliation with Radius Bank and backed by the Federal Deposit Insurance Corporation.
The app also includes budgeting tools and offers a platform for buying and selling stocks. Through FinTron Invest, users can purchase fractional shares of stock for as little as $10 and set up accounts for monthly investments to build up larger stakes over time.
There’s even a feature for calculating how much you can save by eating in rather than dining out.
“You can create a budget that we can set recurring for you,” Rumpf said. “We transfer [funds] on the first of the month into your account so you are forced to save that money — you [have] to plan for eating in.”
FinTron members pay $3 a month to use the app, which comes with commission-free trades on more than 600 stocks and exchange-traded funds. Roughly 100 people are already using FinTron to help it tweak the app in advance of general availability, initially on Apple iOS devices with plans to add an Android version.
Rumpf, Fatse and Pulcyn launched the company only a few years after graduating from Sacred Heart University. Among those licensed to conduct securities transactions under the purview of the Financial Industry Regulatory Authority, FinTron may now be the “youngest” broker-dealer company in the country.
Twenty-somethings also happen to be FinTron’s core customer base.
“We saw all these companies making finance incredibly complex, so we surveyed almost 2,000 young people [ages] 18 to 32,” Rumpf said. “We found that almost every single person wanted to invest . ... It’s something that everyone knew they had to do, but they were too scared or too intimated to do it.”
Rumpf conceived the company as an exten
sion of his own early interest in investing. Along the way, he created algorithms for a trading “bot” to automate some of those processes.
After deciding to start a business, Rumpf pulled together a group of Sacred Heart students. The university provided them with a workspace, and John Gerlach, a Sacred Heart professor who died in May 2020, gave them early advice.
Rumpf ’s father Jeff, who worked at Sacred Heart at the time and is now the executive director of Pegasus Therapeutic Riding, invested more than $20,000 at the outset.
“He said, ‘Dad, ... this is going to be something that will really change the world, because where money goes is how society goes,’” Jeff Rumpf said. “He wants to give the 99 percent the opportunity that all these one-percenter hedge funders get.”
As work progressed, FinTron farmed out tasks to nearly 100 interns from local high schools and colleges. The town of Fairfield also awarded FinTron a $5,000 under a “micro-enterprise” grant program.
“With any startup, there’s an understanding there’s risk involved, and a lot of these businesses don’t succeed. That’s just part of the landscape,” said Mark
Barnhart, head of economic development for the town of Fairfield. “Especially in this case, while they were all young guys in college at the time they were starting this thing, they had some people with some expertise that were providing guidance and counsel. That gave us a certain amount of confidence that they could pull this off.”
FinTron received another $2,000 from a runner-up finish in a startup contest sponsored by the Entrepreneurship Foundation.
“That really helped us — it built our confidence,” Rumpf said. “Every single time we were about to run out of money, we would find an investor just in the nick of time.”
Still, FinTron’s journey has not been without its share of obstacles. The Financial Industry Regulatory Authority (FINRA), taking into account the inexperience of its founding team — all of whom are 25 or under — put the company through heightened scrutiny, according to Rumpf, requesting personal financial statements from FinTron investors.
Rumpf and Fatse also had to run a gauntlet of four regulatory exams requiring more than 120 hours of study. Just when it seemed FinTron was in the clear, FINRA mandated that the company have liquid assets of $220,000, which they were able to scrape together from investors.
Supported by fees levied on the firms it polices, FINRA administers tests to qualify people for broker dealer roles and other functions in finance, and monitors firms for compliance with the power to levy penalties. It is one of a number of regulatory entities overseeing the finance industry, including the Securities & Exchange Commission, the Consumer Financial Protection Bureau and state entities like the Connecticut Department of Banking.
“Every single response we sent them, there were six more questions; and to those six [answers], there were six more questions,” Rumpf said. “They kept cliffhanging us — every time we would miss a deadline, they would extend the deadline.”
Because the startup had been in business for more than a year, it qualified for a loan under the Paycheck Protection Program, which was designed by the U.S. Department of the Treasury to keep people off unemployment assistance during the pandemic. The loan has since been forgiven.
Two of the FinTron team also tested postive for COVID-19; both recovered without the need for hospitalization.
But the company subsequently won $1.5 million in investment capital led by Sage Venture Partners founder Fred Warren, who is considered a visionary in the U.S. venture capital industry because of an early $1 million investment in Apple.
Not everyone bought into the initial vision for FinTron. Connecticut Innovations, the New Haven venture fund that invests in technology companies with the potential for significant job growth, chose not to invest in the company at the outset.
“We review 700 or so companies per year, and we are only able to invest in a small number. We did review FinTron and liked the idea but at the time, the company was not a fit for investment from CI,” stated Peter Longo, senior managing director of investments for Connecticut Innovations, in an email response to a query. “In almost all cases, our answer isn’t no, but rather ‘not yet.’ We are always happy to see founders come back to us ... and provide an update so we can reevaluate whether the company is well-suited for a CI investment.”
FinTron’s office is located in the Loft at Saugatuck building adjacent to a Metro-North commuter rail stop. As the company grows, Rumpf said he would consider Stamford as a likely destination. Either way, he plans to keep the company’s main office in Connecticut.
While the company currently has only a handful of employees, Rumpf anticipates FinTron would grow to a workforce of 200 people in the coming half-decade — and possibly far more, depending on support for clients which would require a call center with a welltrained staff to field questions — if the company hits its growth projections
For inspiration, FinTron founders can look to Greenwich, where Interactive Brokers has become a dominant platform for day traders of stocks and other securities; as of March, it currently serves more than 1.3 million accounts containing $330 billion in client assets.
Interactive Brokers entered this year with more than 2,000 employees. Forbes estimates founder Thomas Peterffy’s net worth at $25 billion, including a gain of $129 million alone on Tuesday, based on the value of his holdings.
In time, FinTron plans to offer tools to help members build up strong credit ratings and a mix of financial services geared toward those considering retirement.
“We want to grow slowly with our clients,” Rumpf said. “Our generation is very ‘do-it-yourself ’ and self-guided, so we built the app to allow people to do it themselves with all the help they need.”