When it comes to investing in startups, alumni networks are the most commonly overlooked source of deal flow, but one of the best sources to tap into. Companies like Airbnb, Uber, YouTube, and Meta have witnessed the immense success of their alumni, who've gone on to create unicorn companies.
So why don't more companies and communities invest in their alumni? Perhaps, it’s the heavy admin barrier, or lack of knowledge about how to consolidate an alumni network for investing opportunities.
Orange Collective, an investment club formed by Y Combinator (YC) alumni, knows all to well the potential locked within their alumni network. PIN’s team is proud to be powering their investment club with our platform as we aim to simplify the process of setting up funds for alumni networks, companies, and communities.
YC is renowned for the transformative experiences it offers to early-stage startups. With its powerful talent network, unique ecosystem, and unparalleled investment opportunities, YC has played a pivotal role in shaping countless success stories like Stripe, Dropbox, and Airbnb. According to a recent report by Pitchbook, since 2010, approximately 4.5% of YC startups have become billion-dollar companies, surpassing other major accelerators. The unicorn creation rate was even higher, at around 5.4%, for cohorts between 2010 and 2015.
Yet, what sets YC apart is the collective power of its alumni community. As YC alums, the founders of Orange Collective have experienced firsthand the importance of supporting the next batch of founders. This support ranges from making introductions and sharing expertise to investing in new startups.
However, as YC batch sizes have grown and opportunities become more competitive, it has become increasingly challenging for alumni to participate in the best deals. Writing relatively small checks (typically $5,000 to $10,000) can limit a solo investor’s involvement in these promising startups. This challenge, combined with the desire to diversify their investments, led to the start of Orange Collective.
Orange Collective's mission is to empower ambitious YC alumni to pool their resources and invest in the top companies of each YC batch. By doing so, they aim to build a diversified portfolio and participate in the potential of the YC alumni network. While Twitter’s been buzzing with concerns about the lack of VC funding, Orange Collective has observed the opposite, with many of the deals oversubscribed by YC’s Demo Day.
They have already made 14 investments in promising startups, including Common Paper, Conduit, JustPaid, and Trigo, alongside top VCs like Sequoia, Initialized, Soma Capital, and L2 Ventures.
This is where Power In Numbers (PIN) enters the picture. Our is a platform designed to streamline the process of setting up investment funds for companies, communities, and angel networks. It takes care of the complex and time-consuming aspects of starting a fund, such as legal and tax considerations, entity creation, compliance, and bank account setup, allowing investors to focus on what they do best—investing in and supporting their alumni founders.
PIN offers some key differentiators that make it accessible and efficient for groups, especially founders' communities, to invest in each other and the startups they care about. These differences include:
The impressive success of alumni networks at companies like Airbnb, Uber, YouTube, Shopify, Lyft, Robinhood, and Meta underlines the untapped potential within these networks. Investing in alumni not only makes financial sense but also fosters innovation and growth within organizations and communities.