Wynn Capital Hits $100M AUM Milestone, Fueled by Santa Cruz Innovation
Santa Cruz Works has been a proud supporter of Wynn Capital, a shining example of what’s possible in our local innovation ecosystem. From early connections at New Tech Meetups to $100 million in assets under management, Wynn Capital’s journey reflects the power of community, persistence, and entrepreneurial spirit.
Wynn Capital is proud to announce we’ve passed the $100 million mark in assets under management. It’s been a 21-year journey from bootstrapped startup to a fast-growing, innovative Registered Investment Advisory firm.
We’d like to thank Santa Cruz Works and the New Tech Meetup for helping us achieve our goal.
Thomas Wynn
In 2014, I was a regular attendee at The New Tech Meetups. During a New Tech event at the Rio Theater, I happened to be sitting next to two entrepreneurs who had just sold their first startup. They asked for my help investing the proceeds from their exit. Seeing the potential of the New Tech ecosystem, I signed up to be one of the early sponsors.
Now, 11 years later, that relationship is responsible for 20% of our AUM.
I founded Wynn Capital in 2003, after more than 15 years working on the floor of San Francisco’s Pacific Stock Exchange. Arriving on the options floor in 1981 as a temp typist, I soon rose to floor manager for a clearing firm and in 1994, I became an options floor trader, aka a “Market Maker” in the AMD pit.
Like most derivative traders, my prior experience consisted of being the lead guitarist and songwriter in the SF rock bands “The Outlets” and “Aural Canvas.” Good times.
After a typically rough initiation into the cutthroat and highly competitive floor trading world, I finally figured it out. By 1997, I had become a consistently profitable trader. I paid my backer off and started my first company, Wynn Options.
Trading for a living in a “pit” on the stock exchange will teach you a few things about trading, investing and the markets. Successful traders find a niche, developing a strict set of trading rules and the discipline to enforce them. Most importantly, you must have the humility to take losses, preserve capital and start again.
Like most successful small business owners, I simply outworked my competition. I got to the floor early, never took lunch and stayed late doing prep for the following day.
Over the years, my trading account and income grew and in 1989, I bought a “seat” on the exchange for $39,000. It was a couple of years after the 1987 crash. The -23% single day decline. Seats had declined in value from $100,000 in 1986 to $39,000 in 1989.
“Seats” on an exchange are essentially memberships that you must rent or own to trade on the floor. Rent is usually 2% of the last sale per month. At $39,000, 2% rent was $780 per month or $9,360 per year.
When I left the floor in 1996, seats were $180,000. Rather than sell, I decided to rent out my seat. Luckily for me, seat prices in the late 90’s spiked to $500,000.
Income from the seat, my investments and income from 3 traders that I backed, more than paid my expenses. It was more than enough for me to retire. My wife and I moved from San Francisco to Ben Lomond and bought a beautiful redwood home in mountains.
Unfortunately, the tech bubble of 2000-2003 led to the demise of the Pacific Stock Exchange and the price of seats. In addition, in the fall of 2002, my wife and I received the news that we were expecting our first child!
I was going to need a bigger boat.
I started Wynn Capital with a letter to friends and family and raised a little bit of money. To get my name out I joined the chamber, the Rotary, leads groups and any other organization that would help me get my name out.
Due to my experience as a stock, bond and derivatives trader, my value proposition was significantly different from my competition. We used ETF models right from the start, long before ETFs became popular. We rebalanced often, instead of once a year like many firms. A huge competitive advantage was our ability to hedge portfolios – which can helps reduce the risk of a portfolio without selling assets.
Hedging in the 2007-2009 recession was effective and referrals from clients became more frequent. Over time, a focus on performance, retirement planning and great client service led to the steady word-of-mouth growth that still drives our business today.
It’s been a wonderful experience meeting clients, getting to know their unique situations and helping them achieve their goals. I’m excited to see what the next chapter brings.
Thomas Wynn, Founder and Senior Portfolio Manager
