Founded in late 2022, Powerset is an investment program with a simple premise: What if the best investors aren't venture capitalists, but other founders scribbling checks between late-night coding sessions and board meetings?
every year Powerset, founded by AngelList alum Jack Zeller and founder of coaching firm Athena; Jonathan Swanson gives five to ten founders $1 million to invest in other startups – potentially giving them millions if the founders bring in good investments. Past panel members include Paul Copplestone, co-founder of Supabase; Jordan Tigani Wes McKinney, co-founder of analytics company MotherDuck and software engineer who created the Python pandas project. Applications for the third batch will open this week.
Zeller described Powerset as a kind of decentralized venture fund: There's no program to teach founders how to invest; There is no timeline for when the founders need to deploy the capital, and no management team that can veto the deal. Founders take home fifteen percent of the profit on a deal.
It's an experimental model that sits somewhere between angel investing, except that the founders are investing their own money. Old-school VC scouting programsVCs help people source deals, including founders; Cluster founders are then encouraged to mentor and advise portfolio companies, just like any investor.
In Powerscout's case; Investments made entirely in the sense of overworked and stressed founders. “There are some founders who are too busy with their companies and too picky,” Zeller says. Or the founder will go to “be the most active person” without investing.
Despite the complications, Zeller believes Powerset's strategy will yield big returns. “It's often the best founders who are building the best companies for the best investors,” he says.
Founders deeply understand the intricacies of starting a startup in their field and are constantly on the lookout for top talent anyway. “I've never seen a genius-level tech founder building an incredible company with so little investment,” he said.
There are no hard and fast rules for who qualifies for Powerset's program. You just build a company and immerse yourself in the tech ecosystem. “Hopefully your company will get to a point where you can get some kind of organic connection,” Zeller says. This means other founders like your product and naturally reach out to you.
But Zeller has a deal breaker: He's not interested in anyone who views PowerSet as an approach to running a company with the vision of becoming a full-time venture capitalist. “These people are very scary,” he said.
The top performing Powerset participants will run their own company for the next five years. He said the founders were planning to build for ten years. “If you're building something very important and you're building your life's mission and your life's work; You're not going to invest in some marginal company,” he said. “It doesn't justify the motivational energy.”