“When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients.” - Warren Buffett
We are united around a shared mission: to break down the barriers to digital asset ownership and lift up the next generation of investors as they onboard into web3. But there's work to do. Investing in crypto is easy, but there's a perceived barrier that prevents people from entering. The barrier isn’t made up of fees, lack of availability or accessibility – it’s a psychological barrier. Many people think that digital assets just aren't for them: they are not taught about it at school; and some think they need to study business to know what they are doing. This is where Farnam comes in.
Asset management is broken
Long gone are the halcyon days of the budding stock picker running his friends and family partnership from the sunroom at 5505, Farnam Street, Omaha. Asset management is fundamentally broken. Poorly aligned incentive structures has meant fund managers are more focused on gathering your money than growing it. Institutional distrust of financial institutions is at all time highs as opaque business models fail to evolve. And barriers to entry mean that the wealth of the few continue to compound, whilst a whole generation is left behind. The tone of the last three decades has been one of failed promises. Passive investing remains a temporary solution as markets continue to need active participants to discover prices. And few can argue that fee-free trading applications enable long term wealth creation. As retail participation in markets reaches decade long highs, the TradFi industry is ripe for disruption.
At the heart of web3 lies two core primitives: community and ownership. Most of the value generated by web2 network participants has been captured by the large centralised businesses that govern the internet of today. Web3 offers a chance for users to not only behave like owners, but become owners. As the third generation of the internet continues to proliferate, mass participation holds the potential for a whole generation to own a slice of the pie and invest in their future. As users and owners become one, the feedback loop between participation and value creation intensifies. The virtuous cycle of value compounding between business and user becomes orders of magnitude more significant than ever before. Put simply, investing done right has the chance to lift up a generation.