The Chris Voss Show - The Chris Voss Show Podcast – Harness Wealth CEO David Snider on Unlocking Financial Mastery: Strategies for Entrepreneurs and Investors

Starting point is 00:00:00 You wanted the best. You've got the best podcast. The hottest podcast in the world. The Chris Voss Show. The preeminent podcast with guests so smart you may experience serious brain bleed. The CEOs, authors, thought leaders, visionaries, and motivators. Get ready. Get ready. Strap yourself in. Keep your hands, arms, and legs inside the vehicle at all times, because you're about to go on a monster education roller coaster with your brain. Now, here's your host, Chris Voss. Hi, folks. It's Voss here from thechrisvossshow.com. There you go, ladies and gentlemen. For 16 years and over 2,000 episodes, the Chris Voss Show has been bringing you all the smartest people,

Starting point is 00:00:47 the CEOs, the billionaires, the White House presidential advisors, the Pulitzer Prize winners, the great authors, the great minds that share their stories, their journeys, and teach you all the different aspects of things that you need to learn about life. Today we have David Snyder on the show with us today. He is the founder and CEO of Harness Wealth. We're going to get into that and what it's about and how you can do better with everything you're doing. So we'll get into that. Harness is a company that's on a mission to make bespoke

Starting point is 00:01:15 financial advice, accessible, intuitive, and valuable using a holistic wealth platform, not holistic health, holistic wealth, because you always want to do organic wealth as opposed to buying the things from the food mills. No, I'm just kidding. Money mills. I don't know. I don't know where I'm going with the holistic thing, but it sounded funny in my head at the time. They seek to provide the next generation of builders confident in their path to the best financial future. Previously, David served as an executive at residence at Bain Capital. He was the COO and CFO at Compass and was responsible for leading the development of its operation finances.

Starting point is 00:01:54 He helped the business grow from a pre-launch to over $350 million of revenue and raised more than $300 million, valuing the company at $1.8 billion. Prior to Compass, David was an investor at Bain Capital where he completed transactions valued over $3 billion, including the IPO of Sensata at the New York Stock Exchange. Welcome to the show, David. How are you? Pleasure to be here. Doing well. Thanks, Chris. Pleasure to have you as well. Give us your dot coms. Where do you want people to find you on the interwebs? Harnesswealth.com is the right place for all things. And as we talked about in the pre-show,

Starting point is 00:02:27 we're both here to serve business owners and equity holders navigate key tax and financial decisions, but we're also a software platform that helps the tax and financial advisors that serve them. But we got a little bit of everything on the website for both. So if people listen today and they need help with their taxes and IPOs and I think cryptocurrency and different things that we'll talk about today, they're a potential customer. And then anybody who might be in the tax business or financial business as well, right? That's right.

Starting point is 00:02:58 There you go. So give us a deeper view, maybe a 30,000 overview of what you guys do there at Harness.com and what makes you guys unique? Yeah, just to bring it to life, that genesis of the business really stemmed from a million plus dollar mistake that I made with my own tax and planning. You'd think a CFO and a private equity investor would get it all right, but I definitely did not find that to be the case. I don't know, you know, Chris, if you're batting 1000 on on the stuff that you've done, but you know, I listened to Harvard Business School professors give me advice on what to do as I was taking over the CFO role at Compass. And it was good advice in the abstract, but the wrong advice given the specifics. And I think insight that

Starting point is 00:03:47 good generic advice is often wrong because of the unique nature of someone's situation. In my case, you know, a change in the tax code in 2018 that allowed for, you know, a huge tax deduction on big gains over five years, it was just not the right advice. And so one would build a platform to help individuals navigate the complexity that they were encountering, typically, through some form of equity compensation, the businesses that they've built, the equity they hold through a private equity or venture backed company, their investments, etc. But meet people where they are, you know the venture-backed solutions I saw, they've got their solution, sort of one size fits all, and really wanted to create something that

Starting point is 00:04:34 was very specific to the individual, but benefiting from a contemporary best-of-breed technology experience that, like what Compass, I think, has done in the real estate space, blends the best of phenomenal advice with a great new digital experience. There you go. So who are your customers on the front side where, you know, is there a minimum net worth? What sort of issues do they need to have worked on? We want to serve people where the complexity that they are facing is no longer solvable with DIY or kind of the main street solution. So if you can get by using TurboTax, like God bless you, it's a great interface. When all of a sudden you're getting K-1s or you've got foreign income or you're creating your own business practice or you're thinking about, hey, gosh, I'm in a really high tax state.

Starting point is 00:05:32 Wouldn't it be better to have an entity so I can avoid some of the state and local income, you know, exemption thresholds? That's when you want to talk to someone that really understands the nuances of what you're trying to do. And that can include typically first a tax advisor, but in some instances also a great financial advisor that's going to navigate some of the more advanced policies for you. There you go. And part of your software helps track your finances, right? Including ISOs and NSOs. What are those by chance? That is the alphabet soup that you encounter if you start or work for a venture-backed company, typically. I think more

Starting point is 00:06:11 and more even some of the private equity-backed ones. But each type, ISO, incentive stock options, NSO, non-qualified stock options, RSUs, restricted stock units, all these things have a different set of decisions and tax treatments that the earlier you understand and plan around, the higher your after-tax outcome is going to be if you're fortunate to have a positive liquidity event. There you go. So tell us a little bit about yourself and we'll circle back to Harness. How did you grow up? What got you into the VC business and

Starting point is 00:06:46 doing some of the things you're doing now? I grew up thinking I wanted to work in politics. So it's been fun watching the conventions of the past couple of weeks recently. Worked on Capitol Hill back in 2002. Loved it, but looked around and said, gosh, whether you move up in this space is highly dependent on who the member of Congress you work for knows, sleeps with, chooses to retire, et cetera, maybe not the fastest, most predictable path to success. And went down the road of, hey, I think traditional professional services is a great place to learn how to do business, so to speak. So I was fortunate to work at Bain & Company for a couple of years, phenomenal training ground, moved over to Bain Capital during the worst part of the Great Recession. And so I got to see kind

Starting point is 00:07:39 of the comeback of the best companies, you know, took one public, as you mentioned, the intro, great business in the technology space, did several new deals across spaces. But in 2012, I was really interested in areas that I had a lot of excitement around, which for me was consumer financial services and real estate and what technology innovation ought to look like in those areas. This was kind of like the early days of the Betterments and the robo-advisors, early days of, you know, not early days, but still early-ish days of the Zillow, Trulia, kind of the transition from real estate tech 1.0 to 2.0. In fact, there was so much that ought to be built. But that sort of lured me in. And as I was thinking about potentially starting something on my own, the founder CEO of Compass, who I'd known through a nonprofit,

Starting point is 00:08:35 reached out and said, hey, we've got a good thing going. We think we've raised a little bit of capital. Would you be interested to join to drive sort of the business side of the house is what took me down that road. And how long has Harness Wealth been active now? Six years. Six years. There you go. So it's got its footing. It's got its mapped out plans. Now I noticed one of the things is it's a marketplace that has tax advisors, CPAs, equity advisors, all those different things. But I noticed one of the features is instantly, it says here.

Starting point is 00:09:07 Tell us about why you have it set up that way. I mean, the goal really from the beginning has been to meet clients where they have a need. In the tax space, one of the observations I had was the most important advice you can get often is well before you're paying that seven-figure tax bill. CPAs are not structured from a price engagement model to actually want to deal with you until you're ready to file a complex 1040 or 1065 with them. And so we pioneered this idea of an equity planning session where you could pay 250 bucks, spend an hour with an advisor who's reviewed your situation beforehand, give you very specific advice to hopefully unlock a huge multiple of that 250 upfront and set you on a path that when you have that outcome, business sale, whatever, you're going to go

Starting point is 00:09:57 back to that advisor and work with them for two decades. So OO is really, we have clients that sit on, you know, fang boards and have immense complexity day one that we serve. And we have clients that, you know, are still paying off student debt and have a bunch of illiquid stock options that could be worth a lot later and need advice to make sure they don't make some of the same cost mistakes that I did. Yeah. Because you trigger different things once you sell or do different things with the product. You know, you trigger different tax situations and scenarios. And the tax code is so bloody complex. I mean, I guess they need to make it simpler, but I guess, I don't know.

Starting point is 00:10:38 Maybe they'll never. Don't hold your breath for that. Don't hold your breath. Yeah. It's too much to, you know, they keep coming up with all sorts of different ways. So people who are tax advisors, equity services and stuff like that, they can register with the site and market themselves on there. Is that correct? Yeah.

Starting point is 00:10:55 I mean, our observation was tax tended to be one of the most important, most sought after services of next generation wealth creators. And one where it was really hard to find great practitioners in that you had a lot of people that were really good experts, but they were at big firms charging more than a lot of clients wanted to pay, or they're really good experts, but they were running a small firm with poor cybersecurity, no digital infrastructure to serve their clients, etc. And so we had built our own end-to-end platform to power great breakaway advisors that are at a big firm, but want to run their own practice, but don't necessarily want to worry about 12 different softwares and all the aspects of growth, etc. And we're a great partner for boutique practices those that are serving you know 50 to 5 000

Starting point is 00:11:47 clients and want a dramatically better experience for them and avenues to grow the value they're creating for their clients and in the way they add new clients to the practice as well there you go there you go so it's a it's a feature for all of them is there i noticed that you've also helped, this is in beta, I guess, in net worth tracking. So you help people track their net worth through all their different financial products. Yeah. I mean, that goes back to the thesis of the business, which is the way to create the most long-term value is by helping people before they need it, before you're going to charge them for it, et cetera. So the tools that we have at HarnessWealth.com are all free,

Starting point is 00:12:29 but it allows people to have a much more comprehensive view of their finances, to be able to run scenarios. Hey, what happens if I move from California to Nevada or New York to Florida, et cetera, in addition to what happens if I exercise something now, sell later, et cetera. Yeah, if you've got multi-state taxes, that's always complex too.

Starting point is 00:12:51 If you're a traveling sort of, I don't know, business person, you're in the NBA or NFL, or maybe you just go around giving speeches, I suppose, to different places in different states, you've got to pay all those applicable taxes. Those get pretty complex. It's hugely complicated. And people should be very cognizant that there's a lot more funding for the IRS and enforcement.

Starting point is 00:13:17 And while they have said that they want to focus on the most high net worth complex individuals, the way their algorithms work, they are going to audit more people across the board. And so at a minimum understanding the exposures you have, being very cognizant of the tax decisions, if there's any gray area that you're making, more important now than it's ever been. And so having the right advice delivered securely, delivered in a way that creates value and at a reasonable price is really portable we're offering yeah and i mean i like the instant part because when you need an answer sometimes at least when i need an answer i need an answer i'm like i'm like i need it you know i'm trying to action item on this right away and i need i need to know what's going i can't sit

Starting point is 00:14:01 there and be like okay i gotta wait a week for someone to get back to me. So like the immediate nature of it, I think you're adding the ability or I see crypto coming soon here in the net worth tracking. Is crypto a thing I can also track in the SaaS? Yeah, we've got a provider so you can link a wallet directly to track that as part of the offering. I think more core is a growing volume of people that are finding success as an investor in the crypto space or in any digital assets. There is a lot of tax complexity. I was just on a call earlier today with someone building software that helps the Treasury Department spot anomalies and look for people they should go after. And so you got to really pay attention with what you're doing, even with the best of intentions to avoid some downstream issues because the tracking is really complicated. It's like what, you know, brokerage and financial services were in the equity markets 30, 50 years ago.

Starting point is 00:15:02 And, you know, having a tax advisor can help navigate that, but really as an expert in the area is also quite accretive. Definitely, having it all. What haven't we talked about that you guys offer there at Tarnus Wealth? I think one of the interesting things is, so tax is the core, but we also have this highly curated network of financial advisors. And I think a lot of next generation individuals are reticent. You know, they've been sort of conditioned of gas. You know, the people that are trying to sell me a product and take commission,

Starting point is 00:15:40 you know, or a big AUM-based fee, that feels like a bad trade. And I think what we found, especially for the clients with a lot of complexity that we're dealing with, huge value unlocks in unexpected ways. And one of those is that comprehensive nature of being able to pull together strategic insurance with tax income through Harness or independently a bunch of other areas. The amount of levers to be thinking about if you're going through a company sale or you're an individual who can structure your own tax-deferred retirement programs or you're at a company going public or something else is really quite vast. And I think the complexity of the strategies that are out there, exchange funds, if you've got a concentrated public position, the ability to sell call options in your stock and collect income until maybe some future price point that you

Starting point is 00:16:33 think is valuable to move money into trusts in different parts of the country that might help with your overall efficiency. There's just a lot of stuff out there. And so that's why we find it so valuable to at least have the conversations with the right tech and financial advisors to know what you should be tackling and thinking about. There you go. And you can find the one you want specific to the need you have. You guys help with life milestone planning, getting married, having a kid, or maybe having multiple kids, retirement planning, equity compensation, IPOs and acquisitions, and starting a business. So you can help people that

Starting point is 00:17:10 want to start a business as well. Yeah. I mean, again, I think there's a big difference between someone who's got a little bit of income and a side hustle and someone who's really creating something and wants the nuance of, hey, I'm creating an LLC. Do I want an S-corp election? Where should that business be domiciled? What's the threshold of expenses that makes sense, et cetera. So being able in one place to have a solution to tackle the increased personal complexity of that, the business tax complexity you may not expect and how you structure it and then, you know, how you file and pay for things.

Starting point is 00:17:44 Am I, you know, owing and pay for things am i you know owing sales tax for what i'm doing are there under the wayfair law new obligations and sales tax states that i operate in it it's just a lot having resources to turn to that can help you navigate that are wildly valuable definitely most definitely so what is the future of your business what do you see you guys doing in the future as Harness and your big vision? We see the data that flows into the tax process as being wildly valuable relative to what it is today. 99% of people that work with a CPA or doing it themselves, they get all these W-2, 29s, K-1s, you know, other types of documents.

Starting point is 00:18:31 And like, it goes into a process, you get to a number, you're not happy if you owe something, you know, maybe you're happy if there's a refund at the end of it, but then it kind of just like disappears. And having the ability to leverage that data to actually make better decisions. Should I be in safe harbor if you're someone who's got to pay quarterly estimates?

Starting point is 00:18:52 Am I significantly below the average on the tax efficiency of the way that I'm investing my personal portfolio? It's stuff that we just feel is really valuable. So for the clients that work with us for tax, we've created a far more seamless experience that ought to unlock more value. But now on top of that,

Starting point is 00:19:12 building off of the tools that you referenced and some other stuff, really ensuring that we have the most insightful engagements with advisors that exist anywhere in tax or financial services. That's great. And having it to where you kind of control the process. You can go online, order what you want instantly.

Starting point is 00:19:30 I like that because we usually want to need something. It's usually on a weekend. We're not open until Monday, you know, that sort of thing. So there you go. Final thoughts as we go out, pitch people to onboard with you in the.com that they need to go to to find out more about you guys. Yeah. So again, I think HarnessWealth.com is meant to be a one-stop shop for helping to solve people's most important tax and financial decisions. So as Chris mentioned, if you're

Starting point is 00:19:56 a tax advisor, a financial advisor looking to enhance the way that you serve your clients and grow your business, navigate from HarnessWealth.com to that Harness for Advisor page in that top navigation bar. If you're an individual who's finding the complexity of their financial, personal lives growing, we think we're one of the most flexible and most additive resources that you can use to navigate whatever that may be. There you go. There you go. Thank you very much for coming on the show. We really appreciate you coming by and sharing the data with us. And hopefully people can onboard either way,

Starting point is 00:20:31 depending upon what their needs are. A lot of fun. Thanks for having me, Chris. Thank you. And thanks for tuning in. Go to goodreads.com, 4chesschrisfuss, linkedin.com,

Starting point is 00:20:40 4chesschrisfuss, chrisfuss1, the TikTokity, and check out harnesswealth.com. Be good to each other. Stay safe. We'll see you guys next time.

The Chris Voss Show - The Chris Voss Show Podcast – Harness Wealth CEO David Snider on Unlocking Financial Mastery: Strategies for Entrepreneurs and Investors

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