Friday, January 15, 2021
From Tech Crunch:
A new fintech startup called EarlyBird wants to help families invest in their children’s financial futures. Through the EarlyBird mobile app, parents in just a few minutes can create a custodial account, also known as a UGMA (Uniform Gifts to Minors Act) account. These accounts typically allow a parent, aka the “custodian,” to invest in stocks, bonds, mutual funds and other securities on behalf of the minor child. When the child comes of legal adult age, the investments become theirs.
Through the app, parents can set up an account for their child, then invite other family members and close friends to contribute.
The idea is not so different, in spirit at least, from something like HoneyFund, where newlyweds ask loved ones for cash donations instead of physical gifts. Similarly, EarlyBird offers an alternative to giving a child toys and more “stuff,” by inviting family and friends to donate money. Except in EarlyBird’s case, it’s not asking for straight cash donations — this is not some glorified crowdfunding platform, after all — it’s enabling investments.
EarlyBird, however, aims to combine the investment account itself with a platform that allows for social features and a gifting experience. The idea is to make the act of donating to the account feel more like a real gift — unlike the gift of a check or some cash tucked into a greeting card.
Read more here.