‘We Understand How It Feels To Be In Their Shoes’: Why Calvin Williams Built Freeman Capital, His Automated Wealth Management Platform
Calvin Williams, Jr. had his first exit in his mid-20s — a web application studio startup — and he thought he had “a little bit of money.” But his exit didn’t make him wealthy in the eyes of traditional wealth management investors, and he decided to start a business that makes investing accessible to first-time, first-generation investors.
Making a business like this successful would mean breaking the financial industry’s wealth management model that requires a quarter of a million dollars to invest. Williams set out to target millennials and help them buy stocks with a minimum of $1 through his new company, Freeman Capital.
Shrinking the wealth gap and its bleak outlook will not be easy. Bill Gates, Jeff Bezos and Warren Buffett have more wealth than half of the U.S., according to Inequality.org. The country’s richest 1 percent own more than half the stocks.
As the CEO and founder of Freeman Capital, Calvin and his team are focused on being able to reach those who do not typically have the knowledge to invest or $1,000 to purchase a share of stock.
Freeman Capital is the first Black-owned automated wealth management platform in the country that is regulated by the Securities and Exchange Commission. “When you look at the financial services market, you often have companies that may target a certain demographic, but don’t truly understand the experience of that demographic,” Williams told Moguldom. “We want our customers to feel comfortable and to know that we have built a product for them because we understand how it feels to be in their shoes.”
Williams spoke to Moguldom about the wealth gap, his motivation for starting Freeman Capital, and how bias prevents many businesses from reaching a growing U.S. demographic.
Moguldom: Why did you start Freeman Capital?
Calvin Williams, Jr: At the age of 20, I had bought my own house and I was exiting my startup, a web application studio. After my exit, while in my mid-20s, I thought I had a little bit of money. I had been marginally successful. I wanted to try and find a wealth manager or someone that could help me stay on the right track for the next level of success. But the reality is that I quickly found out that there are levels to this. I was still broke in their eyes. They pretty much told me, “If you can’t write me a check for a quarter of a million dollars in our first meeting, we can’t talk.”
And that really bothered me because I’m a good guy and I was trying to move forward, but I couldn’t. There was no platform or service that would help first-time, first-generation investors under this high-net-worth minimum. I began to really study the wealth gap. When you look at the net worth of African Americans versus white Americans and Latinos, the gap is massive and is only growing. In 2016, the average wealth of white Americans was $146,000, while the average Black wealth was $3,500 and Latino wealth was $6,000. That is already a problem, and it’s getting even bigger. By 2053, the Black net worth number is supposed to reach zero, and for Latinos, zero by 2070. When it comes to the wealth gap, we see that it comes down to the lack of access to education and tools to help these populations.
Moguldom: We know African Americans have less access to capital and often bootstrap and invest their own paychecks and savings into their business. Is it possible for people of color to be startup founders and grow their future with investing in stocks?
Calvin Williams, Jr: We are in a time now where we have to be very resourceful. It’s always been that way for us. When you look at the statistics of venture capital for early-stage investments, they are not going to people of color and women. What I have had to do is be as flexible as possible. Before I launched this company, I was talking to my wife, who helps to keep me grounded. She said, “Before you bring this life-changing, generation-changing idea, let’s make sure that really is a market for this.” We did a market research study where we surveyed over 3,400 people to really understand millennials, but especially Black millennials. I would say that for us, as Blacks, because the opportunities are so scarce, we have to be very targeted. And when we take our shot, we just can’t take it. Unfortunately, we have to be more prudent and careful. But at the end of the day, it does end up with our businesses poised for success because we take more time in the beginning to prepare. When we take our shot, we can win because of the preparation. And, yes, we can still invest in stocks as long as we have access to education and tools.
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Moguldom: You went to North Carolina A&T State Univerity for your bachelor’s degree in computer science. How has this been helpful for you in launching the technology portion of your business?
Calvin Williams, Jr: I’ve been a geek my whole life. Even when I was recruited to work for the Department of Defense at age 17. Getting my degree from A&T was especially critical, not just from a technical perspective, which was very beneficial, but from a cultural perspective. It’s very easy in America to follow the narrative of what is going on in marginalized communities, especially the Black community. But at A&T, you’re basically surrounded by Black excellence and it motivated and showed me very early on that there’s a mass segment of the U.S. population underserved and overlooked.
Now 10-to-15 years later, there are all these reports coming out showing how Black people are becoming one of the most educated groups in the country and that our income progression is outpacing other groups. That’s partially why we target our customers the way that we do.
Moguldom: What does Freeman Capital offer its customers that makes it different from other investing resources?
Calvin Williams, Jr: Freeman Capital is the first Black-owned automated wealth management platform in the country that is regulated by the SEC. It provides three key pillars. First, with financial planning. Because we’re helping first-time and first-generation investors with something as sensitive as their money and their time, they get the beauty of having a hybrid financial planning platform. The platform can help them to organize their finances, create projections in terms of investing in their retirement or helping to pay off debt. They can also get a human, certified financial planner to be their personal guide and coach, and that is game-changing. Certified financial planners charge hundreds of dollars per hour to access their expertise.
The second part is we provide automated investment management which is focused on making wealth-building accessible with a very low minimum investment of just $1. We do fractional shares, which means that if you want to invest in a company that is thousands of dollars per share, like Amazon, and you don’t want to spend all of your money on one share of the company, we can let you buy a fraction of the share with $1 or at the dollar amount you want.
The beautiful thing is you don’t have to worry about doing the management and tracking every single thing. That’s what our platform does for our customers.
The third thing we do is around education. We have an education platform within our app where experts teach on various topics, we share information on blogs, and we provide access to tools and calculators. You get all three of these things for less than $1 a day. One of our customers said he likes Freeman Capital because, for the price of Netflix and Hulu, we help them get their financial lives together.
Moguldom: You were recently a part of the Google Startups Black Founders Exchange. You also went through other programs. Do you find it beneficial to participate in these programs and to participate in more than one?
Calvin Williams, Jr: I think they are very beneficial, depending on what you want to get out of them. For me, at each one of these programs, I went into it hoping for a certain outcome. Take Black Founders. I really valued it because of the partnership with Google. There have been other programs where it was an opportunity of focusing on nailing our market and our customer messaging. It really depends on what you want to get from the programs. For us, we are programmed out. We are only looking at specific programs to move the needle forward to help us reach more people so they can become more financially secure.
Moguldom: You were awarded a $50,000 NC IDEA grant. Have you received any other external funding to help grow your company?
Calvin Williams, Jr: We were able to receive two grants from NC IDEA. One for the $50,000 which you mentioned and then another one is for a crowdfunding campaign which is yet to be determined. We have raised some money from family and friends. We’re always open to learning and talking to people who are were supportive of our mission.
Moguldom: In checking out your current team, a lot of them look like you. Was that on purpose?
Calvin Williams, Jr: It was important for us to have a diverse team. When you look at the financial services market, you often have companies that may target a certain demographic, but don’t truly understand the experience of that demographic. We want our customers to feel comfortable and to know that we have built a product for them because we understand how it feels to be in their shoes. So, diversity is extremely important for our team. And that is something that we look to continue as we move forward.
Moguldom: It is difficult to find diversity in the financial industry. Many do not look like us. Have you experienced any challenges launching your business in the fintech space?
Calvin Williams, Jr: I have had some challenges. A few years back, I was at an event and I was sharing Freeman Capital in front of about 50 people. Someone there said, “How will Black people invest?” Even though I had stats from credible sources, the bias was so strong that they literally just did not see the truth. This is not unique to just the fintech and finance industry. It happens in a plethora of fields. It’s something where we have to just fight through and continue to move forward and find those allies that are open to having really honest conversations. The way we see it, the opportunity in America is in diversity. When you have the majority of the U.S. population becoming a person of color and yet, you have no firms that are specifically trying to help them, what will become of one of the largest, if not the largest population of the country? This bias is now impacting the ability to provide a great service. We see opportunity, where other folks show prejudice or bias. We look to help me as many folks as we can.