Exclusive Powerset joins the ranks of programs that turn founders into investors

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Exclusive Powerset joins the ranks of programs that turn founders into investors

Illustration: Natalie Peeples/Axios There’s a new program on the block for turning entrepreneurs into angel investors — dubbed Powerset — and it’s aiming to raise $314 million. Why it matters: Co-founder Jake Zeller previously helped lead , a similar setup (and the inspiration for Powerset) that’s a joint venture between AngelList and venture firm Accomplice. Details: Zeller started Powerset with long-time collaborator Jonathan Swanson, who's also a co-founder of Thumbtack, a marketplace for professional services. Powerset will debut with $30 million in capital that the two already put together largely from their own money and that of friends. Powerset will start with 10 entrepreneurs for its first cohort, and give them each $1 million to invest in early-stage startups. As the entrepreneurs build an investing track record, they’ll each be able to draw up to about $15 million in additional capital for follow-on investments or bigger deals. Participating entrepreneurs will get 15% of the carry, though Zeller expects that structure will evolve and may be a bit different when it comes to follow-on investments. Powerset will use the management fees to provide resources for the program. What they’re saying: “I’m specifically looking for the [entrepreneurs] who are like, ‘I’m too busy for this, I don’t have time for this,’” Zeller tells Axios of the would-be investors he wants to recruit. His experiences at that founders investing in peers tends to generate strong returns, he adds. "Everyone has hobbies — some people go to the gym, for example,” he says. “Helping other founders is another great hobby.” Between the lines: “Our thesis is that we’re going to see a lot more of [these programs] as well — a movement of founders backing founders,” says Zeller.And while Powerset and Spearhead offer fresh models, the underlying idea isn’t new. Scout programs from VC firms have been around for over a decade, arming entrepreneurs and startup execs with a bit of capital to invest on their behalf. Some firms have long believed that former startup founders make the best professional VCs. The bottom line: VC remains a game of finding and capitalizing on unique networks.

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