Investing can seem daunting if you’ve never done it before. Enter Staax, a startup platform that helps new investors over the logistical hump.
Paying friends back through platforms like Venmo has become standard practice for all ages, but particularly for young adults. For Nikki Varanasi, the method gave her an idea, which she pitched in October to TechCrunch Disrupt’s Startup Battlefield. Varanasi’s idea became Staax.
Staax is a platform that lets friends pay friends back with shares of stock, rather than money.
“Because of the disposable income left in apps [like Venmo], it takes over a week to transfer to your bank and then to your brokerage. So for a lot of people, they just leave their money in there and they don’t invest it and that takes a hit with inflation,” Varanasi told TechCrunch.
Varanasi, who now serves as CEO of Staax, and her two co-founders, Chief Operating Officer Lucy Yang and Chief Technology Officer Victoria Yang, created a platform that acts like a brokerage; people who sign up open an investment account and can buy and sell shares. They can also receive and send gifts of shares to others. So that their peers can pick and choose, users make a list of five preferred stocks. They can also turn down a gift.
If the stock price changes between the time a person sends it and the account holder receives it, the receiver would pay the additional amount (if the share price increased) or accept the original amount as cash instead of stock.
“What happens on Staax is we avoid taxes for the sender, because we use a ledger system based on cash on the back end, so you don’t need to own the stock to send it,” Varanasi said.
What makes the platform a low-stress way to get into the market is the small amount of money that’s typically involved. “It’s not large amounts of money you need to stress about and it’s in the market, but it accumulates over time. And so [as an investor] you’re really in it for the long term strategy,” Varanasi said.
The company launched in 2020 and has raised $2 million in pre-seed funding. Its investors include Techstars and Western Union, which invested through an accelerator program for fintech; the VC firms Lightspeed, Harlem Capital, and Hustle Fund; and angel investor Litquidity.