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Jul 22, 2017 · 33m · top-founders

728: With $24m Raised, Why is He Buildling FinTech On Back of Advisors?

Aaron Klein · 20m spoken Nathan Latka · 10m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top, host Nathan Latka interviews Riskalyze co-founder and CEO Aaron Klein to explore the company's SaaS unit economics, capital-efficient scaling to 19,000 financial advisors, and the behavioral finance principles underpinning its platform.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 32.8% of the talking time here. How this is scored →

Nathan as informed peer 3.8 Guest teaching 3.3 Guest disagreement 2.7 Nathan pushing back 4.5
05100:0010:0020:0030:001:15–6:25 · Nathan as informed peer 3/10 The Mission and Methodology Behind Riskalyze Nathan asks probing questions on how Riskalyze verifies short-term decisions and challenges why tech is needed over speaking. Aaron explains investor psychology and quantitative risk scoring.6:25–11:06 · Nathan as informed peer 4/10 SaaS Monetization, Founding Roots, and Capital Strategy Nathan pushes into cap table allocation and questions whether Aaron engineered angel buybacks for corporate leverage. Aaron clarifies their board structure, capital efficiency, and early investor liquidity.11:06–17:25 · Nathan as informed peer 4/10 Scaling Operations, Pricing Strategy, and Retention Dynamics Nathan drills down into SaaS unit economics, demanding gross rather than net churn figures. Aaron shares operational metrics, pricing iteration history, and low churn dynamics.17:25–20:35 · Nathan as informed peer 6/10 ARPU Expansion Mechanics and Revenue Estimation Debate Nathan computes an implied $2.7M MRR by multiplying stated customer count and ARPU, cornering Aaron when he refuses to confirm the figure. Aaron concedes the $145 price point is only for new customer onboarding.20:35–27:39 · Nathan as informed peer 5/10 Challenging the Passive Indexing Model Versus Advisory Value Nathan challenges the entire advisory model using Warren Buffett and passive indexing, claiming advisors only make money on transaction velocity. Aaron firmly rejects the premise and educates Nathan on modern fiduciary flat-fee structures and behavioral finance.27:39–32:12 · Nathan as informed peer 1/10 Mid-Roll Promotion for the GetLatka SaaS Analytics Platform After a mid-roll promotion for GetLatka, the segment transitions into standard Famous Five rapid-fire questions and closing remarks.1:15–6:25 · Guest teaching 4/10 The Mission and Methodology Behind Riskalyze Nathan asks probing questions on how Riskalyze verifies short-term decisions and challenges why tech is needed over speaking. Aaron explains investor psychology and quantitative risk scoring.6:25–11:06 · Guest teaching 3/10 SaaS Monetization, Founding Roots, and Capital Strategy Nathan pushes into cap table allocation and questions whether Aaron engineered angel buybacks for corporate leverage. Aaron clarifies their board structure, capital efficiency, and early investor liquidity.11:06–17:25 · Guest teaching 2/10 Scaling Operations, Pricing Strategy, and Retention Dynamics Nathan drills down into SaaS unit economics, demanding gross rather than net churn figures. Aaron shares operational metrics, pricing iteration history, and low churn dynamics.17:25–20:35 · Guest teaching 3/10 ARPU Expansion Mechanics and Revenue Estimation Debate Nathan computes an implied $2.7M MRR by multiplying stated customer count and ARPU, cornering Aaron when he refuses to confirm the figure. Aaron concedes the $145 price point is only for new customer onboarding.20:35–27:39 · Guest teaching 7/10 Challenging the Passive Indexing Model Versus Advisory Value Nathan challenges the entire advisory model using Warren Buffett and passive indexing, claiming advisors only make money on transaction velocity. Aaron firmly rejects the premise and educates Nathan on modern fiduciary flat-fee structures and behavioral finance.27:39–32:12 · Guest teaching 1/10 Mid-Roll Promotion for the GetLatka SaaS Analytics Platform After a mid-roll promotion for GetLatka, the segment transitions into standard Famous Five rapid-fire questions and closing remarks.1:15–6:25 · Guest disagreement 2/10 The Mission and Methodology Behind Riskalyze Nathan asks probing questions on how Riskalyze verifies short-term decisions and challenges why tech is needed over speaking. Aaron explains investor psychology and quantitative risk scoring.6:25–11:06 · Guest disagreement 3/10 SaaS Monetization, Founding Roots, and Capital Strategy Nathan pushes into cap table allocation and questions whether Aaron engineered angel buybacks for corporate leverage. Aaron clarifies their board structure, capital efficiency, and early investor liquidity.11:06–17:25 · Guest disagreement 1/10 Scaling Operations, Pricing Strategy, and Retention Dynamics Nathan drills down into SaaS unit economics, demanding gross rather than net churn figures. Aaron shares operational metrics, pricing iteration history, and low churn dynamics.17:25–20:35 · Guest disagreement 4/10 ARPU Expansion Mechanics and Revenue Estimation Debate Nathan computes an implied $2.7M MRR by multiplying stated customer count and ARPU, cornering Aaron when he refuses to confirm the figure. Aaron concedes the $145 price point is only for new customer onboarding.20:35–27:39 · Guest disagreement 6/10 Challenging the Passive Indexing Model Versus Advisory Value Nathan challenges the entire advisory model using Warren Buffett and passive indexing, claiming advisors only make money on transaction velocity. Aaron firmly rejects the premise and educates Nathan on modern fiduciary flat-fee structures and behavioral finance.27:39–32:12 · Guest disagreement 0/10 Mid-Roll Promotion for the GetLatka SaaS Analytics Platform After a mid-roll promotion for GetLatka, the segment transitions into standard Famous Five rapid-fire questions and closing remarks.1:15–6:25 · Nathan pushing back 4/10 The Mission and Methodology Behind Riskalyze Nathan asks probing questions on how Riskalyze verifies short-term decisions and challenges why tech is needed over speaking. Aaron explains investor psychology and quantitative risk scoring.6:25–11:06 · Nathan pushing back 5/10 SaaS Monetization, Founding Roots, and Capital Strategy Nathan pushes into cap table allocation and questions whether Aaron engineered angel buybacks for corporate leverage. Aaron clarifies their board structure, capital efficiency, and early investor liquidity.11:06–17:25 · Nathan pushing back 3/10 Scaling Operations, Pricing Strategy, and Retention Dynamics Nathan drills down into SaaS unit economics, demanding gross rather than net churn figures. Aaron shares operational metrics, pricing iteration history, and low churn dynamics.17:25–20:35 · Nathan pushing back 7/10 ARPU Expansion Mechanics and Revenue Estimation Debate Nathan computes an implied $2.7M MRR by multiplying stated customer count and ARPU, cornering Aaron when he refuses to confirm the figure. Aaron concedes the $145 price point is only for new customer onboarding.20:35–27:39 · Nathan pushing back 7/10 Challenging the Passive Indexing Model Versus Advisory Value Nathan challenges the entire advisory model using Warren Buffett and passive indexing, claiming advisors only make money on transaction velocity. Aaron firmly rejects the premise and educates Nathan on modern fiduciary flat-fee structures and behavioral finance.27:39–32:12 · Nathan pushing back 1/10 Mid-Roll Promotion for the GetLatka SaaS Analytics Platform After a mid-roll promotion for GetLatka, the segment transitions into standard Famous Five rapid-fire questions and closing remarks.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 65.5% · guest 34.5%0:00 · Nathan 65.5% · guest 34.5%3:00 · Nathan 12.6% · guest 87.4%3:00 · Nathan 12.6% · guest 87.4%6:00 · Nathan 19.5% · guest 80.5%6:00 · Nathan 19.5% · guest 80.5%9:00 · Nathan 18.1% · guest 81.9%9:00 · Nathan 18.1% · guest 81.9%12:00 · Nathan 14.1% · guest 85.9%12:00 · Nathan 14.1% · guest 85.9%15:00 · Nathan 28.8% · guest 71.2%15:00 · Nathan 28.8% · guest 71.2%18:00 · Nathan 42.1% · guest 57.9%18:00 · Nathan 42.1% · guest 57.9%21:00 · Nathan 30.1% · guest 69.9%21:00 · Nathan 30.1% · guest 69.9%24:00 · Nathan 32.1% · guest 67.9%24:00 · Nathan 32.1% · guest 67.9%27:00 · Nathan 55.7% · guest 44.3%27:00 · Nathan 55.7% · guest 44.3%30:00 · Nathan 40.7% · guest 59.3%30:00 · Nathan 40.7% · guest 59.3%33:00 · Nathan 100% · guest 0%33:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 26:46 Aaron rejects transaction fee premise

Aaron directly counters Nathan's claim that advisors require high trading velocity to make money, explaining that modern fiduciary advisors operate on flat AUM fees.

 Hardest push from Nathan ▶ 19:24 Nathan presses on conflicting revenue numbers

Nathan refuses to let Aaron dodge the revenue calculation, explicitly demanding to know whether the 19,000 advisor count or the $145 ARPU is incorrect.

 Biggest teaching moment ▶ 23:10 Aaron educates on behavioral finance vs mathematical theory

Aaron breaks down why theoretical low-cost indexing fails for typical investors due to human panic selling, showing why tailored risk alignment drives real-world outcomes.

 Nathan holds their own ▶ 19:08 Nathan traps guest with rapid unit math

Nathan demonstrates sharp financial command by instantly multiplying customer count by stated ARPU to expose that the guest's reported numbers do not reflect overall blended ARPU.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
The Mission and Methodology Behind Riskalyze 3424 Nathan asks probing questions on how Riskalyze verifies short-term decisions and challenges why tech is needed over speaking. Aaron explains investor psychology and quantitative risk scoring.
SaaS Monetization, Founding Roots, and Capital Strategy 4335 Nathan pushes into cap table allocation and questions whether Aaron engineered angel buybacks for corporate leverage. Aaron clarifies their board structure, capital efficiency, and early investor liquidity.
Scaling Operations, Pricing Strategy, and Retention Dynamics 4213 Nathan drills down into SaaS unit economics, demanding gross rather than net churn figures. Aaron shares operational metrics, pricing iteration history, and low churn dynamics.
ARPU Expansion Mechanics and Revenue Estimation Debate 6347 Nathan computes an implied $2.7M MRR by multiplying stated customer count and ARPU, cornering Aaron when he refuses to confirm the figure. Aaron concedes the $145 price point is only for new customer onboarding.
Challenging the Passive Indexing Model Versus Advisory Value 5767 Nathan challenges the entire advisory model using Warren Buffett and passive indexing, claiming advisors only make money on transaction velocity. Aaron firmly rejects the premise and educates Nathan on modern fiduciary flat-fee structures and behavioral finance.
Mid-Roll Promotion for the GetLatka SaaS Analytics Platform 1101 After a mid-roll promotion for GetLatka, the segment transitions into standard Famous Five rapid-fire questions and closing remarks.

Statements from this episode (10)

Insight
Klein: Long-Term Investing Requires Making Sound Short-Term Decisions
“Somewhat counterintuitively, the only way to become a long-term investor is to make a bunch of really great short-term decisions along the way.”
Aaron Klein Jul 22, 2017 ▶ 3:05
Assertion Contradicted
Klein: Only 52% of Investors Aged 20-29 Match the Aggressive Stereotype
“What we found, actually, we had a team of academics delve into the data and the methodology behind the risk number, and what they found was that about 52% of investors aged 20 to 29 are aggressive, just like the stereotype. But the other 48% are spread across …”
Aaron Klein Jul 22, 2017 ▶ 5:41
Assertion Not checkable as stated
Klein: Early Riskalyze Investors Earned 10x Returns via Share Buybacks
“No, there are some of our early investors who've earned a 10 X return already from the company.”
Aaron Klein Jul 22, 2017 ▶ 9:03
Assertion Not checkable as stated
Klein: ARR Exceeded $4M Deployed Capital Before First Institutional Raise
“And we deployed just a little more than four million dollars in total capital prior to bringing FTV capital on board last year as our first institutional capital. So we really built a pretty substantial business you know, where we don't talk about revenue numb…”
Aaron Klein Jul 22, 2017 ▶ 10:09
Assertion Not checkable as stated
Klein: Riskalyze serves 19,000 paying financial advisors nationwide
“We serve 19,000 today across the country.”
Aaron Klein Jul 22, 2017 ▶ 12:20
Assertion Not checkable as stated
Klein: Discounting a $129 list price to $99 tripled conversion rates
“We pushed it to one 29 and started discounting back to 99 immediately and bam our conversion rates like tripled, right? So we were charging the same amount of money, but it was a discount and conversion rates tripled.”
Aaron Klein Jul 22, 2017 ▶ 13:40
Assertion Not checkable as stated
Klein: Riskalyze Operates With a $600 Fully-Loaded CAC
“Yeah, so we usually spend like direct sales cost, probably about 400 to acquire a new customer. You want to follow that cost with like our fixed conference and marketing spend, probably about 600 bucks to acquire a new customer.”
Aaron Klein Jul 22, 2017 ▶ 16:47
Assertion Not checkable as stated
Klein: $245/Month Premier Tier Captures 12% of New Seat Sales
“Number one is we rolled out a premier tier of Riskalyze ah, in February. And that's been great. And we sell about 12% of our new seats in the premier tier right now. And we've done a bunch of upgrades from existing customers. So that's, that starts at 245 buck…”
Aaron Klein Jul 22, 2017 ▶ 18:12
Prediction Not checkable as stated
Klein: Autopilot Aims to Capture 10x Revenue Per Financial Advisor
“We're focused on delivering like, you know, real numbers, about a 50 X impact on efficiency and what it takes for an advisor to actually implement the investment decisions that they make for their clients. And in exchange for that 50 X impact on efficiency, we…”
Aaron Klein Jul 22, 2017 ▶ 18:47
Insight
Klein: Humans cannot psychologically follow passive buy-and-hold index fund advice
“There's only one problem with it. Humans are incapable of following that advice.”
Aaron Klein Jul 22, 2017 ▶ 23:21
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