Using PIN to Codify Investment Opportunities For Your Community
Most early-stage investment opportunities and access to equity ownership are gated by institutions or accredited investors. As a result, the barriers to entry are high, and the same thresholds have largely been in place since 1982.
According to The Brookings Institution, only 18.14 million households, or 13.85% of US households, met one of the requirements to be considered an accredited investor in 2020. To qualify, a person must have at least $200,000 in personal income or $300,000 for combined incomes. In addition, an individual or couple with a net worth of more than $1 million (excluding the value of their home) can also qualify.
It is time for a system that broadens access to capital for non-traditional investment communities.
What makes sense is a model that codifies and formalizes incentive structures around existing communities. Why shouldn’t a cohort of university alums be able to pull together and invest together? If you take this natural support network and layer economic alignment on top, it makes the community even more robust, and everyone can benefit.
When we met Steph Mui in early 2021, we knew she was the right person to take this idea of democratizing access to early-stage investing even further.
While she was a student at Stanford’s Graduate School of Business, Steph wanted to find a way for her classmates to invest in businesses being born out of their graduating class. Stanford is famous for educating some Silicon Valley’s most influential CEOs, including Netflix’s Reed Hastings, Google’s Larry Page, and Snapchat’s Evan Spiegel. What if the classmate sitting next to her ended up just as successful?
The result was an investment club she called “Stanford 2020,” which raised $1.5M from 175 classmates from the GSB Class of 2020. The minimum check size was just $3,000, significantly less than the typical investment required by a venture fund.
Through the success of the investment club, Steph recognized the value of pooling community capital to invest in companies out of your immediate circle of friends, classmates, or colleagues.
What started as a passion project led to the creation of PIN, short for Power In Numbers, a company we are proud to be an early investor in, along with our friends at GSR, NEA, and Canaan.
The easiest way to explain PIN is that the company helps any community quickly start an investment vehicle for their members to invest in startups together. PIN will handle the back office tasks, like legal and tax support, so members can focus on raising capital and helping portfolio companies.
The trendline has been moving toward community-driven models, as we have seen with AngelList, Kickstarter, and GoFundMe. PIN provides an entry point for members to raise VC funds within their own communities, regardless of investor accreditations. An investment community can form from anywhere — a group of university classmates, early-stage startup employees, industry peers, or shared interests.
Steph has been in the trenches to work around specific pain points, mainly by providing an administrative framework, often the most tedious part of investing. In just three years, PIN has already helped 10 investment clubs succeed in raising capital as well as investing alongside top venture capital firms. In addition, several clubs have already seen early exits and markups, including secondhand marketplace Archive and mental health startup Osmind.
With $5.6M in seed funding, PIN’s plan in the immediate future is to add new members to their growing community, including other universities, accelerators, and early employees at successful tech companies. If you are interested in learning more about how a member-driven investing approach can be an alternative option to traditional investment vehicles, get in touch with Steph and her team at PIN.