Hey fintech friends - Dez here, I’m super excited to share my interview with Alessandro Chesser, the CEO & Co-Founder of Dynasty. We covered a ton of ground here: Alessandro's vision to build “Morgan Stanley 2.0”, why the average American should have access to a trust, and got into a bit of philosophical debate on what would happen if Dynasty is successful in their mission to “democratize trusts.” This was a super fun interview for me and I think you’ll all enjoy it. Let’s dive right in.
Alessandro, great to be chatting with you again. Could you tell us what Dynasty is, as well as give us a little context on your background?
Hey Dez, great to be here. At Dynasty, our mission is to democratize the greatest financial instrument the richest Americans use that the rest of us don't use today: The living trust. We are building a vertically integrated trust company for both simple trusts and complex trusts.
So a little bit about me and my background– I actually started my very first job in financial services at 16 years old; I was at Bank of America selling financial services and financial products.
I spent close to a decade in the consumer banking circuit working for Bank of America, Wells Fargo, and Washington Mutual. Over time I ended up moving into the software world. I got my first software job at Silicon Valley Bank (I guess I worked for two companies– Washington Mutual and Silicon Valley Bank– that are both no longer here) within a group called SVB Analytics. They owned a software platform called CapMx that was a “Version One” of cap table software.
Over time, I became the only salesperson for that product and because of that experience, I wound up at Carta as the first sales hire in 2014. Carta was zero-ARR when I joined. Henry specifically recruited me because he found out that I was the only salesperson for the incumbent's product, and he wanted to leverage the relationships and the knowledge that I had in the space to build his business. I ended up at Carta for eight years, as VP of Sales I built the business from $0 ARR to +$300 million ARR.
Amazing. Could you bring us inside that journey a little bit?
The most important part of that journey was that I got to really flex that zero-to-one muscle. I got tons of experience going zero-to-one with brand new products. I helped launch the cap table product, the company valuation product, the investor valuation product, the expense accounting product, the tender offer product, the public markets product, the CartaX product, and the compensation product. Most of the products that Carta has, I served as the first business lead for. That zero-to-one muscle is what Henry liked to use me for. I also built up a 200+ person sales organization brick-by-brick, so I got to build that 1-N skillset as well.
That's incredible. Really diverse and varied background and lots of different jobs over the course of a career. How'd you get a job at Bank of America at 16? Did you just walk in and apply? Did you know someone?
My mom actually worked at Bank of America as a branch manager. My family is an immigrant family, so most of my uncles were in the tile and marble industry and other blue collar industries. Nobody went to college. My mom ended up getting more of a white collar job, and she was like, "Hey, you need to do this. Here's some other managers I know that are looking for people to hire. They reimburse tuition when you go to college; this is the best job you can have as a student." And so she was able to get me in the door and for that first job.
Nice. Another question I had, because you were in the financial system during '08 and now you're trying to innovate around the financial system: What lessons do you think you're taking from 2008 and applying to Dynasty today, knowing how ephemeral startups– and even large companies– can be?
I think the lesson from 2008 was that you never want to get too greedy. That was the issue back then: The banks got too greedy and shouldn’t have expected the economy to only go up and to the right. They were being very aggressive with the loans that they were offering, going up to 100% or even above 100% loan-to-value, which is ridiculous. As a sales person during that time period, the banks were just incentivizing the wrong behavior– for example, giving somebody a $1.2 million loan on a $1 million house because in a couple of years the house would be worth $1.3 million and it will be in the money. It was just a matter of getting too greedy, and not enough people being reflective.
As far as what that translates to for Dynasty, I would say that apart from the market crashes, the biggest learnings I got from my time in financial institutions are: 1. I know how to sell every single financial product and service that exists. I can talk about asset management, I can talk about life insurance, I can talk about lending, personal loans, business loans. I built an expertise working with HNW clients.
Secondly, I saw how hard it was for banks to acquire customers. Even now, if you look at some of the offers that Robinhood is giving for people to open new accounts, new credit cards, you name it - it’s all very aggressive. It's very hard for banks to acquire customers because banks are a commodity. Almost every single bank offers the same products. The interest rates might vary slightly depending on how aggressive they want to be on the deposit side or on the lending side, but it's very difficult to acquire customers for banks because everybody already has a bank.
So I've really translated that into what we're building with Dynasty, because the biggest thing that we're building is a flywheel for high net worth individuals. The people that want to create a trust with us tend to have assets on average of $2.6 million. That's $2.6 million in assets that the average customer is connecting to our product. So that was the focus from day one: Creating a flywheel for high net worth individuals, because we knew that once we have that flywheel, there's so many other products we can layer on top.
What's the end vision for Dynasty? Let's unpack that statement of creating a flywheel around high net worth individuals and then come back to the actual mechanics of a trust and why people should use it.
I want to build Morgan Stanley 2.0. I think that Morgan Stanley today– and not only Morgan Stanley: Goldman Sachs, all the big private banks– are broken. I know this because my whole family is in financial services at this point; my mom got all my cousins in, so the younger generation didn't go the blue collar route. They all ended up as wealth managers, some of them are at RIAs, some of them are at the largest banks in the world in top wealth management and private banking positions.
But private banking is broken. If I walk in the door at Morgan Stanley and I talk to a financial advisor, they're going to help me set up a financial plan, which is fine. There's a ton of different software companies I can go to now that offer financial planning. If I don't like their asset management, I can go to Wells Fargo. That's kind of been democratized. What they're not going to do is be able to set me up with a trust, and they're also not able to help me with tax planning, which is very important.
Alternatively, if I have +20 million dollars, I have the opportunity to work with a multifamily office that’s going to do all of what I just mentioned: The financial plan, the estate plan, and the tax plan all under one roof, with one point of contact for me to work with. That experience should exist for mass market customers.
I truly believe that Morgan Stanley 2.0 needs to exist, because all of these things need to work together. My estate plan and my tax plan and my financial plan should all be coordinated together. Today, for mass market customers, they're not, and that's a problem that we want to solve.
We specifically chose to build a trust company, because as I mentioned, we believe trusts are the greatest financial instrument that needs to be democratized. Trusts are the trojan horse into the entire relationship.
Okay, so talk to me about the mechanics of a trust.
A trust is a private entity that owns all of your assets. Of all of the estate planning tools, the trust is the only one that is an actual legal entity; everything else is like a will. A will gets processed through the court system– it's not a legal entity, it's just a document. The trust is an actual legal entity. Everything that you own, you put into your trust. You don't own your house, your investments, or your bank accounts anymore; your trust owns them.
Having a trust can protect your assets and help you avoid taxes. We saw that right away and we said, “We need to democratize trusts. We need to make it possible for anybody to protect assets, avoid taxes and avoid probate court.” Probate court is the biggest tax on non-rich Americans that exists. It's hundreds of billions of dollars a year getting ripped from American families. Rich people aren’t dealing with it because they already have their trusts set up; it's the non-generationally rich Americans that have a simple will instead of a trust who are.
At what point in someone’s lifetime should someone typically create a trust?
The most important time to create a simple trust is before you acquire your first asset, before you make your first startup investment, or before you buy your first home. Because if you already have a trust, you can put the home immediately into the trust or make your investment immediately from the trust, and it's never unprotected.
People think that you have to be 60 years old to create a trust, so they wait. Next thing you know, you have 50 startup investments, you have 10 bank accounts, you have three pieces of property, and you have to go move all that into a trust. Most people never get around to doing that, which is why so much of these assets end up going through probate court [when they pass away]. The best time to create one is at the very beginning of your adult life cycle.
It’s almost like a trust should just be a default product for the financial health of all Americans, no different than a bank account.
Exactly. That's why we have a free trust product– it should be the first thing you do when you graduate from school.
We think Dynasty’s trust business alone is big enough to be a $100 billion dollar company, especially when you get into the more complex trusts. But back to my earlier point, the whole reason for building this is to create a flywheel for high net worth individuals. There's so many other things that we can get into: Taxes, asset management, life insurance… all of these financial products complement a trust. There's a lot that we can do as far as our vision goes, whether or not we're the only company that's providing this service. We want to help build Morgan Stanley 2.0.
Just to pressure test slightly, why would a HNW or a HENRY need a trust? Like in some ways you’re talking to a lot of the core TWIF audience.
Simple. There's two different types of trust: Revocable trusts and irrevocable trusts.
Everybody should have a revocable trust. A revocable trust is a personal private entity that you put all your assets into. The two purposes of having a revocable trust are, number one, privacy. So instead of you owning your assets, the trust owns your assets. You can call the trust whatever you want– you can call it First Mark Trust or XYZ Trust, for example. This gives you privacy because if you own real estate, real estate records are public. In the world that we live in today, you can upset somebody on social media and next thing you know, they Google search you and find your address because it's public record, and they can show up at your doorstep. But if XYZ Trust owns your house, they are going to have a hard time figuring out where you live. They don't know who owns that house, so they can't find you. Privacy is a huge reason to have a revocable trust.
The second reason is probate. Unless you have a trust, if you die or if become incapacitated your assets are going to be processed through the probate court system where a judge is going to decide what's going to happen to your assets and who in your family gets what. As I mentioned, hundreds of billions of dollars are processed through this system every single year. If you have a will, all that will is is instructions for the judge that have to get processed through probate court. The government seizes your assets and holds onto them– the average time period for probate court is 18 months– your family has to show up to court, get their own legal representation, and they have to make a claim for the assets. There's court fees, there's lawyer fees, and it’s a huge time commitment.If something happens to you, your family's not going to want to waste 18 months fighting for your assets. It causes a lot of family friction as well. This probate court process destroys families because your siblings are fighting for your assets, your parents are fighting for your assets… It's ridiculous. It shouldn't exist. Having a revocable trust is the only way to avoid probate court. If something happens to you, you've already assigned a successor trustee, they get control of your trust and they distribute the assets per your instructions. The government doesn't even get to touch it. Your estate can be settled in days, not 18 months.
Is Dynasty a pain killer or a vitamin? Like Carta clearly solves a burning need for the right customer at the right time, but having a trust? That may not be a burning problem for many consumers in the US today?
A revocable trust is important when you die or if you become incapacitated To your point, aside from the privacy benefits, there's not a lot of urgency behind a revocable trust except for people who have health issues, are going into the military, or have high-risk jobs– people that have a burning need to make sure that their estate is going to be handled if something happens to them. They need to make sure their family's going to be protected.
Separate from that though, the irrevocable trust product– which is what we're rolling out now as our second product– that's more of a painkiller than a vitamin because it is not just going to benefit your family when you die; it can benefit you today by helping you pay less taxes and by helping protect your assets from lawsuits, creditors, divorce, whatever.
In divorce, specifically, a trust is better than a prenup because there's a lot of friction when you create a prenup: You have to get a lawyer, your spouse has to get a lawyer, you're negotiating your divorce before it even happens. That's ridiculous. Instead, if you move your assets into an irrevocable trust, number one, you don't even have to have the conversation. You've already separated the assets from yourself. There's no negotiation with your spouse. There's no drama, nothing. You've already separated the property and now it's protected. A prenup would have to get processed by a judge, similarly to a will, and a judge can say, "Oh, I don't think this is right. It's not fair. Divide the assets."
There's this quote from John Rockefeller, he wrote in his book like 100 years ago, "Own nothing. Control everything." He's talking specifically about irrevocable trusts. Because if you put all your assets into these irrevocable trusts, the assets are protected if you get sued, get divorced, or go bankrupt. People have a burning need for that product today.
Two philosophical questions. One, in Dynasty's success, does the public have to lose? Obviously, taxes go to a wide range of things, and we can both agree that there's a lot of inefficiency in that process. But if you think about the wild future of Dynasty, where everyone has a revocable or irrevocable trust, you'd say the net effective tax rate of the United States goes down.
Yeah.
What do you think about that?
Have you heard of the death tax? I didn't even get into the death tax yet, but anybody who's worth over $12.9 million has to pay a tax of 40% on every dollar over that if they die. If you have $100 million, that's almost $90 million worth of assets that are going to be subject to 40% tax*. The death tax is an absurd amount of money that goes to the government every single year. Somewhere up to $25 to $30 billion comes from death tax.
If everybody had a Dynasty irrevocable trust, the trust lives forever, so that tax is never paid. To your point, yeah, that's the business that we're in. We want to help people protect their assets and avoid taxes through legal means the same way that billionaires are today. If we're successful at that, there may be less taxes paid and maybe then we have to come up with another system, but that’s not Dynasty's problem to solve. If we're successful, then there will be a new way of doing taxes regardless.
You want to arm the rebels.
I want to level the playing field. The billionaires shouldn't be the only ones getting advantages that everybody should get. But the way that it works today is 100% broken, wherein the richest people have access to the tools that allow them to avoid death taxes, that allow them to avoid state taxes, that allow them to protect assets from divorce and bankruptcy and creditors. That shouldn't be the case; everybody should have access to these tools. So our mission is to completely democratize them.
How do you think about marketing Dynasty? It strikes me that the language you use– "’Own nothing. Control everything,’ Rockefeller, Dynasty.” rr “Invest like the 0.01%, Dynasty”– is eye catching or attention grabbing. How do you think about telling that story to the public and getting people excited?
From day one we were a down-market startup, so we knew that we never wanted to spend a lot of money on marketing. We focused on product-led growth. We wanted to create this organic flywheel where we have this free trust product, so the first thing you do on Dynasty is invite people to it. On average, our users are inviting 4.2 additional users to the platform with an average net worth of $2.6 million. That, first and foremost, is our marketing strategy: A product-led, organic, viral flywheel.
Two last questions. Firstly, what was it like joining a business at $0 of ARR and growing it to $300?
Oh, man... Some days I felt on top of the world. Some days I felt like everything was on fire and the company would go out of business. I think it was the best and hardest thing I've ever done, especially being in charge of revenue for many years and having very aggressive revenue targets.
That being said, it gave me the foundation that I needed to build this business. Carta gave me the relationships with a lot of the early investors and team members that joined Dynasty. It gave me confidence that I was able to do all this zero-to-one over and over again.
Do you think more people should start startups?
The way it stands today, no. I'm like, “Man, I shouldn't have even started one.” It's so hard. It's so hard, especially in a downmarket. Theoretically, yes, more people should start startups, but when I give advice to my friends, I tell them not to start one. There are so many better ways to make money. But absolutely, we do need more entrepreneurs; you can never have enough entrepreneurs. The challenge is that most of those are going to fail, and those people are going to have a very hard life.
Alessandro, this was fantastic. Really enjoyed it. One last question– which is something I care about because in today's day and age, there are so many opportunities for the next generation of entrepreneurs, investors, operators to learn from people like yourself who are actually in the arena building stuff: What is the single piece of advice you would give to someone who wants to start a fintech company or a startup generally?
Number one: Don't start a company unless you have a distribution plan from day one. I think a lot of people are like, "Oh, I'm going to create this really cool product," and the most important thing is: How are you going to distribute it? If you can't distribute it, you shouldn't even start the company. That's the most important thing– being distribution-first. Of course, I'm a career salesperson, so that's how I think.
Number two: A team. There are solo founders. Don't start a company unless you have a really good team because if it's you by yourself, it's extremely lonely. I have two co-founders and it's lonely enough, so a team is very, very important– especially complimentary team members.
The way we built our company from day one was with three complimentary pieces: A business leader, a product leader, and an engineering leader. And that's it. Henry actually embedded that in us in the early days of Carta– he called it “The Trifecta”. If I were going to give anybody advice on starting a company, I would tell them that's the number one thing: Find The Trifecta. It doesn't have to be a product lead. It could be a design lead, but you need somebody who's going to be working on the front end of the product. Then you need the back end– the engineer that's going to help build the database– and you need the business person that's going to be worried about distribution.
To me, that makes it significantly easier to build a company if you have that strong foundation.
Love it. Love it. Alessandro, this was fantastic.
Thank you Dez - I appreciate it!
* Editor's note: The federal estate tax exemption increased from $12.9 million to $13.6 million in tax year 2024.
