In late 2020, a group of Stanford students banded together to create Stanford 0220, a venture fund solely to invest in their fellow classmates’ ventures. Given the school’s past in spinning out successful startup founders, it unsurprisingly had no trouble raising $1.5 million for the debut investment vehicle – waitlist not included.
Now, two years later, the leader of that club, Steph Mui, is trying to replicate that playbook in the form of a venture backed startup, and solo entrepreneurship. PIN, which stands for power of numbers, has freshly raised a $5.6 million seed funding round led by Initialized Capital, with investments from GSR, NEA, and Canaan.
PIN wants to replicate the Stanford 2020 story for other community-based ventures. The company says that it provides interested clubs with the back office framework, legal and tax support and has a platform where leaders can look for capital raise opportunities, meet other members and manage portfolios. It makes money through a SaaS fee, which Mui says she hopes stays below 2% of a club’s total assets under management.
“Anyone who has started an investing vehicle, whether it’s an investment club to a traditional fund, knows how difficult it is because of all the administrative obligations there are to make sure the fund is set up properly and is compliant,” Mui explained. “Community investment clubs are even more difficult because of the number of investors (a club can commonly have hundreds of members), which introduces even more friction during the fundraising process and ongoing operations.”
The startup isn’t sitting too far from companies like AngelList, which is unbundling the founder experience, and Republic, which is trying to make it easier for anyone to invest in startups.
A newly-funded startup all about helping people break into the venture capital investment world and land coveted cap table spots feels very 2020. During a downturn, the pitch seems more risky. For example, as founders enter a period of uncertainty, the appeal of having one dedicated investor may take precedence over a party round of advisors with varying ownership, VSC Ventures’ Jay Kapoor told TechCrunch last week. “The problem with those party rounds was when it came time for somebody to step up and really support the company, they weren’t there,” Kapoor said.
Founders always want to protect their equity, but in an unstable market, can an investment club win deals? PIN is working on different products that would create an incentive for club members to support founders beyond capital. Like, a hiring bounty system.
Mui explains how founders who are hiring can push a job description that they’re promoting to all their community club members, who will then receive it through the PIN platform. Each action is tied to a specific reward, so if a member refers to someone who gets hired, they could get a money prize or a leaderboard spot that identifies them as someone who is going above and beyond to help the startup.
The product developments are still in the works, but largely with the goal of getting around some of the issues of party rounds. Mui added that the majority of people in Stanford 2020 were first-time check writers, which meant that their care and personal connection to an investment is “significantly higher and more powerful than, arguably, a general party round” where an investor may have hundreds of startups.
It’s not a characteristic that her or the startup can depend on indefinitely.
“The unfortunate timing with us building right now is that we’re benefitting a lot from interest from traditional groups, unsurprising people like other schools, early-stage tech companies, accelerators and [those] who would want to use this product anyways,” Mui said. “It’s a much bigger uphill battle in getting more nontraditional investors – which is something we care about..[but] has taken a little bit of a backseat.”
She added: “if you’re already less familiar with how technology works and started investing and you’re in this downturn, you’re impacted and you lose your job and you have less disposable income to invest. Naturally, this becomes less of a priority…so it’s just been disappointing to me personally.”
“When the [TechCrunch] article came out about Stanford 2020, my co-founder 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 that we were convinced that that maybe Stanford class is a corner case because of the fair criticism that some readers brought forward,” about privilege, Mui said.
“What changed that divide for me was talking to literally over 100 groups…and realizing that’s totally not the case,” she said. “Now that I’m a founder, I realize that all startups have very different needs.. all those groups benefit from having community clubs of all different sorts on their cap table because of the expertise they require.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
