At the end of 2020, a group of Stanford students came together to create a venture fund called Stanford 2020 just to invest in their classmates’ ventures. Given the school’s past history of shepherding successful startup founders, it surprisingly had no trouble raising $1.5 million for its first investment vehicle — waitlist excluded.
Now two years later, the leader of that club. Steph Mooy, It’s trying to replicate that playbook in the form of venture-backed startups and solopreneurship. Pin, which stands for Power in Numbers, recently raised a $5.6 million seed fund led by Initialized Capital from GSR, NA and Canaan.
Pin wants to replicate Stanford 2020’s story for other community-based initiatives. He said the organization has a back-office framework for interested clubs, legal and tax support, and a platform where leaders can search for capital-raising opportunities, meet other members and manage portfolios. It makes money through SaaS fees, which Mui hopes will keep below 2% of a club’s total assets under management, she said.
“Anyone who has started an investment vehicle, whether it’s an investment club for a traditional fund, knows how difficult it can be because of the administrative obligations to ensure that the fund is properly structured and that the fund is compliant,” Mooy explained. “Community investment clubs are more difficult because the number of investors (a club can typically have hundreds of members) creates more friction in the fundraising process and ongoing operations.”
The startup isn’t trying to make it easy for anyone to invest in a startup, from companies like AngelList, which solves the founder experience, and Republic.
Newly funded startups are passionate about helping people enter the world of venture capital investment and the capital tables that are in demand in 2020. When failure occurs, the field looks more dangerous. For example, when founders enter a period of uncertainty, the appeal of having an independent investor can be more proprietary than a round of advisors, VSC Ventures’ Jay Kapur told TechCrunch last week. “The problem with those party rounds was when it was time for someone to step up and really support the company, they weren’t there,” Kapur said.
Founders always want to keep their equity, but in a volatile market, can investment circles win deals? PIN is working on a variety of products that create incentives for club members to support founders beyond capital. Like, employment bonus system.
Mui explains how hiring founders can receive job postings that they advertise to all of their community club members through the pin platform. Each action is associated with a specific reward, so if a member refers to someone hired, you may receive a financial reward or a leaderboard that identifies someone who goes above and beyond to help a startup.
Product developments are still in progress, but mostly aimed at keeping up with some party-round issues. Mui added that most of the people in the Stanford 2020 were first-time check writers, meaning their care and personal connection to an investment is “much higher and more powerful than a general round of parties,” adding that an investor could have hundreds. of beginners.
It’s not a trait she or the initiate can rely on indefinitely.
“The sad moment we’re building with us right now is that we’re benefiting a lot from the interest of traditional groups, like other schools, early-stage tech companies, startups, and unexpected people. [those] Who wants to use this product anyway,” Mui said. It’s an even bigger uphill battle in terms of getting more non-traditional investors – something we’re concerned about… [but] It took a bit of a back seat.
She added: “If you don’t know how technology works and you start investing and you’re in this recession, you’re going to be impacted and you’re going to lose your job and you’re going to have less income to invest.” Naturally, this becomes less of a priority… so it’s frustrating for me personally.
While market dynamics may affect Pin’s ability to find a diverse set of early adopters, Mui is optimistic about the future. She noted the growing brainstorm around crypto-native DAOs (decentralized autonomous organization) as investment clubs are more interested these days. DAOs are all shared decision-making frameworks, a concept that other fintech and crypto companies bring to the world simply as an investment. Just this week, OrangeDAO — a crowdfunding platform that brings together 1,000 YC alumni to invest in startups in one place — raised $80 million. Earlier this year, TribeVest committed millions to a collaborative investment vehicle.
“When [TechCrunch] Article came out about Stanford 2020, my co-worker and I thought about doing this as a full-time company, and actually one of the main reasons we didn’t at the time was because we were convinced that it would probably be a part of Stanford. Because of the fair criticism of the corner case from some readers,” about privilege, Mui said.
“The thing that changed my split was speaking to over 100 groups…and realizing that wasn’t the case,” she says. “Now that I’m a founder, I realize that all startups have very different needs…all those groups benefit from having different community clubs at their table because of the expertise they need.”
