The Exchanges

Q Why, Alessandra, why people are thinking, why can't I just set up a will to prevent that? Why do I need a revocable living trust to do that? Why can't a will solve that?

A A will goes through probate. It has to be processed through probate court. A will is just instructions for who you want to inherit your assets, but the government will still process that will. And, and people will have to actually show up for court and make a claim for those assets. And so that process takes on an average 18 months. If you have a trust, a trust is an actual legal entity. You put everything you own in your trust. Your trust now owns your home. It owns your investment accounts. And so if something happens to you, your successor trustee takes control of your trust and can do whatever you want with your assets based on the instructions that you created.

AI assessment note: “A will goes through probate. It has to be processed through probate court.”

Q I've heard from attorneys and counsel is you can't direct the corporate trustee on where to use that money. In other words, I couldn't tell you to go buy the house. So what's the point of having you control? How will you know? Like, what are you going to do to go buy random stuff with it? How do I give you guidance on what to use that money on?

A So when you create your local trust, you create, you can create a very specific instructions, or you can make it very generic. Your specific instructions can say upon liquidity event, buy houses in these locations, and to find out which houses like you want to purchase, work with this advisor. And so you can appoint like your brother, for example. And so it's a very indirect way of controlling trust. Uh, the other way you can do is you can make it super generic and you can just say, you know, all the decisions are going to be made by my advisor that I appoint and whoever that advisor is has Full discretion on anything that happens in the trust. So you just want, it's just creating that, that, uh, layer of separation. Like you're not going to be able to get the tax benefits if you're directly connected to it. Right. You're not going to be able to get the asset protection. Like if you get divorced and they see that you're the one sticking your hands in the cookie jar, like you're going to be able to lose those cookies. If you want to create that layer of separation, it has to be somebody else that's making the decisions.

AI assessment note: “you can create a very specific instructions, or you can make it very generic”

Q Very cool. Okay. We get it. It's for, uh, 2000 free signups at the top of the funnel each month coming mainly from Instagram and TikTok, uh, short form videos. Take us down the funnel. What happens next? How do you get to paid?

A So they come in, they get in for the free trust, um, and then they, they want some advanced options or they have some questions. They get on the phone with one of our customer support reps. Um, and then we upsell them until we have two paid products. We have the, uh, more advanced feature revocable trust product for nine dollars a year. So we're not necessarily, we say we're pre-revenue, but we actually have about 50,000 dollars ARR, and that's coming from the 99 dollar a year product. The irrevocable trust product Like that's in the very earliest stages right now where we get licensed. We can help people create these irrevocable trusts, but we're not really putting a lot of emphasis on that until we become licensed because the trustee services, that's where the big revenue opportunity is.

AI assessment note: “They get on the phone with one of our customer support reps. Um, and then we upsell them”

Q Okay. And what makes this, I mean, that's a lot of dilution, right? So you must have a good reason to give up that equity, right? What makes this so expensive to build? Why do you need five million bucks?

A Yeah, we don't actually. We have a lot of, we have like three plus years of runway. We're keeping expenses super low. I think the most, the most important reason why we wanted to raise money is because we're becoming a licensed trust company in South Dakota, and that's going to require us to have a minimum of a million dollars on reserves. It filed via a bond. Um, in addition to that, there's just, there's, you have to get some insurance. And so it's really just for getting the, Through the trust company application process. And it's very specific. We're doing it in South Dakota. South Dakota is the number one place for trust. There's different kinds of trust. There's revocable trust, which we offer for free. That's kind of our top of funnel. Lead gen engine. We help, you know, that's what 99% of Americans need. A revocable trust protects you from probate court. You know, because most Americans don't have a trust, hundreds of billions of dollars every single year gets seized by the state governments and placed into probate court. Uh, it's the biggest tax on non generationally rich Americans that exist. Um, and so we want to solve that problem for them. And that's our free product. Our paid product is the irrevocable trust. That's the South Dakota trust product. Um, and so we have to become a licensed trust company in South Dakota so that, uh, we can serve as a trustee and actua…

AI assessment note: “the most important reason why we wanted to raise money is because we're becoming a licensed trust company”

Q second thing, the biggest thing I hear from entrepreneurs when we're talking about this kind of thing is they say, Nathan, I don't want to give up control to some random person or my younger brother or my mom or my dad, right? So I guess help people get comfortable with that. What does it mean to actually give up control so you can take advantage of any irrevocable trust?

A Yeah. And so there's two ways you can do it. You can turn over the trustee services to a family member, to a friend or family member. They can be the trustee of your trust, which means they're the ones that are actually assigned for any investments or any distributions. Um, the other way you can do it is you can assign a corporate trustee company. That's what we're becoming licensed to be a corporate trustee. And so when you assign a corporate trustee, then you're, you work with them directly and they custody your assets. Um, and they actually make the trades for you and the investments for you. It's kind of a similar situation for the public markets when you're an insider and you're involved in insider trading, like you can't make the direct trades on your, on your shares. And so you have this like 10 B five, one plan, which allows you to place orders to make the trades. It's the same kind of thing. You set up all the instructions for the irrevocable trust and the corporate trustee is the one who's actually going to make the transactions happen.

AI assessment note: “You set up all the instructions for the irrevocable trust and the corporate trustee”

Q in that trust, I could show that to Some bank and they might give me 40% leverage on the ten million and give me a four million dollar loan at a four percent rate. Personally, I can then control where I spend that money and it is backed up by the trust. Is this something you see entrepreneurs do a lot? And am I thinking about this the right way?

A A hundred percent always. And the other way that they do it is they don't take a loan from the trust, but if the trust buys real estate, they can rent, they can rent to live in that real estate. So they're not directly connected. So for example, like, let's say I have my daughter, uh, I'll create an irrevocable trust for my daughter. I'll use the proceeds of sale to buy a house. I'll live in the house. I'll pay rent. That rent goes back to my daughter and the trust that I created for her. And so it's a way of, you know, you get around the taxes and the money just goes back to my daughter for the rent.

AI assessment note: “A hundred percent always. And the other way that they do it”

Q Can you name an example of a partner that's driven you leads?

A Uh, yeah. One of the largest mortgage lenders in the U S a guaranteed rate. And so we're partnering with mortgage lenders because we really were circling in homeowners because homeowners are the widest base of mass market customers that have a single problem to solve, right? They have to put their home in their trust. That's the only way they can avoid probate court. And so putting a home in a trust is actually complex. Like you can go to legalism, you can create a trust online, but actually putting your home in it, you're going to need to see an attorney because they're going to have to draft a new deed for you. So the way that we're, uh, approaching the homeowner problem, helping homeowners put their home in trust is we're, we're circling the home buying process with mortgage companies, with title companies, with prop tech companies. So the next time you buy a home and you go to guaranteed rate, you get a mortgage guarantee rates. It's going to say, do you want to put this home in a trust for free? And that's, that it gets embedded directly into the buying process. And they tell you exactly why you want to do it. Your home goes straight into the trust or doesn't have to be any deed transfer.

AI assessment note: “One of the largest mortgage lenders in the U S a guaranteed rate.”

Q So how, how are you going to get in?

A Uh, you know, we're, we have connections with the state of South Dakota specifically. We have like a former congressman joining our South Dakota board. Uh, you know, we're working our way through South Dakota. We have connections into the governor, right? And so you have to, and also like we have very powerful investors, right? Bill Ackman is one of our investors. We have the founder of Insight Partners, one of our investors. We have the founder of Carta. We got a bunch of billionaires as investors. And so we're just, that was the main purpose for raising capital. Also, in addition to Uh, you know, satisfying the needs for the South Dakota trust company. We need the connections that will help us, uh, get through the red tape over there.

AI assessment note: “We need the connections that will help us, uh, get through the red tape”

Q Alright, so call it 2022, uh, time frame. And what is a free and easy living trust creator for homeowners?

A Yeah. So, uh, when we looked at the space initially, we saw that it was broken. Every, every living trust that you could get up until Dynasty existed was, was paper. Uh, you know, you go to the most expensive law firm in the United States, you can get a stack of papers, your output. Uh, or if you go to LegalZoom, Rocket Lawyer, name your online trust creator, you were buying stacks of paper. Like you slide your credit card, pay 500 bucks, print out a stack of paper, find a notary. Stored in your filing cabinet. Now you have this massive stack of paper. How do you update it? What happens if you lose it? And so we saw the exact same problem that we saw in Carta in the early days. It was, it was paper stock certificates, the paper option agreements, we digitized everything. And so we looked at, we actually came up with this idea at Carta. We saw this as another set of legal documents that needs to be digitized and democratized. Uh, but we realized that we weren't going to be able to build it at Carta. So we left And we got a lot of the same investors to invest in us, and we, we kicked off the company.

AI assessment note: “We saw this as another set of legal documents that needs to be digitized”

Q is very valuable for entrepreneurs. And a lot of people do not understand it, but frankly, the biggest bill you're going to play your entire life is taxes. So understanding this move, right, is important. And Alessandro, I guess this is part of the thesis is the fact that nobody really understands this is why you're building Git Dynasty. So how does Git Dynasty make money on all this stuff?

A Yeah. So, you know, we have two products. We have the revocable trust product and the irrevocable trust product. As I mentioned, revocable is for inheritance planning, irrevocable trust, that's for taxes and asset protection. Your point about a South Dakota trust, anybody, you don't have to live in South Dakota to have a South Dakota trust. I have a South Dakota trust. I can move my digital assets there. So all my, my founder shares, my previous shares at Carta, my crypto, everything's in a South Dakota trust. That gives me South Dakota tax treatment. And so the way that we make money is we have this flywheel where people, we have thousands of people every single month signing up for a free revocable trust product that they put their home in it. That helps them avoid probate work.

AI assessment note: “the way that we make money is we have this flywheel”

Q And who is the closest to you in terms of in this space right now? I'm seeing like Verify, Velvet, Portfolio.io, but I mean, are those, who would you say is your top competitor in the space?

A Uh, you know, I think we're kind of playing this middle ground between legal zoom and attorneys. And, you know, the difference is our revocable trust is free. Like nobody else is doing that. It's going to cost you money everywhere. We were switching the business model completely. We're using the revocable product as our acquisition. That's the master market product. Every single American in the United States needs a revocable trust. And then, you know, the, the, the premium product, that's how we're going to monetize. So there's not really anybody that's doing it From that sense. But the main reason, you know, somebody would not use us is maybe because they want to see an attorney. They want to go through that process. Most people don't, but some people do. And you know, for that, they can, they can definitely go see the attorneys.

AI assessment note: “playing this middle ground between legal zoom and attorneys.”

Q Yep. That makes a ton of sense. Uh, this is great. Okay. Uh, we talked about sort of your growth growth. We talked about your funding. We talked about how much you sold. We talked about why trusts are important. What else am I missing? Remember my audience are mainly founders doing between one to five million bucks of revenue. How should they be thinking about trust? Anything we missed?

A Yeah. And so like taxes and asset protection is great. Um, but like, you know, you don't need to rush and do that today, especially if you're not going to be selling stock for another five to 10 years. I would say the most important thing is for anybody who does not currently have a trust, any type of trust at all, use our free product. You can do it in less than five minutes in the backseat of an Uber. You can do it while you're multitasking. We literally have customers that do this while they're in the gym working out. And we know because they go through the selfie verification at the very end of our workflow. And so that's the way we designed this product to be so simple that anybody can do it while they're multitasking, like do it quick. Get dynasty.com takes you less than five minutes. If you want to see an attorney later, if you want to get our upgraded package later, great. You can always expand on the free one, but at least having a free one is going to give you some layer of protection. Today you have zero. Some protection is going to be much better than zero.

AI assessment note: “you don't need to rush and do that today, especially if you're not going to be selling”