Powerset Empowers Founders with $1 Million Investment Opportunity
Powerset, launched in late 2022, proposes a novel investment strategy: engaging startup founders as potential top-tier investors. The initiative poses a question: might the most effective investors be the very founders immersed in their ventures rather than traditional venture capitalists?
Cohort Opportunities and Program Structure
Each year, Powerset, spearheaded by AngelList alumnus Jack Zeller and Athena founder Jonathan Swanson, provides five to ten select founders with $1 million to invest in other emerging startups. This model not only incentivizes these founders with potential millions in returns but also enriches their investing acumen. The past participants include notable figures such as Paul Copplestone, co-founder of developer platform Supabase, Jordan Tigani, co-founder of analytics firm MotherDuck, and software engineer Wes McKinney, the originator of the Python pandas project. As Powerset opens applications for its third cohort this week, it continues to attract ambitious entrepreneurs seeking to expand their investment horizons.
Decentralized Approach and Flexibility
Powerset distinguishes itself as a decentralized venture fund, eschewing traditional structural norms. According to Zeller, founders have the freedom to invest without stringent guides or deadlines and enjoy the autonomy to finalize deals. The program offers a 15% share of profits to founders from successful investments, aligning their financial success with Powerset's growth.
Dynamic Investment Environment
This experimental venture sits between angel investing and VC scout programs, though with a distinct twist: founders do not use their funds initially, yet they manage investments independently. Founders in the cohort are encouraged to mentor and leverage their experience to guide portfolio companies.
Challenges and Founder Dynamics
Zeller acknowledges the challenges, noting that busy founders might initially abstain from investments only to become highly active investors later. Despite these hurdles, he believes the approach will yield significant returns. "It’s often the top founders, crafting the best startups, who become the best investors," he stated. Founders inherently understand startup challenges and constantly scout for innovative talent.
Criteria and Expectations
While there are no rigid prerequisites, Powerset seeks founders embedded within the tech ecosystem whose companies garner organic interest from peers. Zeller cautions against applicants seeking a segue to venture capitalism, emphasizing that successful participants remain committed to their ventures for five to ten years, viewing Powerset as a complement to their entrepreneurial mission rather than an exit strategy.
"Engaging with Powerset while concurrently pursuing your life’s work ensures you prioritize meaningful investments," Zeller concluded.