How Powerset’s $1M Founder Investment Program is Reshaping Startup Funding
A New Approach to Venture Capital
Founded in late 2022, Powerset is challenging traditional investment models with a bold hypothesis: founders make the best investors. This innovative program selects 5-10 visionary founders annually and provides them with $1 million each to invest in promising startups—with potential for additional funding based on performance.
The Brains Behind Powerset
- Co-founders: Jake Zeller (AngelList alum) and Jonathan Swanson (Athena founder)
- Notable alumni: Includes Supabase’s Paul Copplestone, MotherDuck’s Jordan Tigani, and Python pandas creator Wes McKinney
- Current status: Accepting applications for its third cohort
How the Powerset Model Works
Powerset operates as a decentralized venture fund with unique characteristics:
- No investment training: Founders learn by doing
- Flexible timelines: No pressure to deploy capital quickly
- Autonomous decision-making: No managing partners to veto deals
- Profit sharing: Founders keep 15% of investment profits
Bridging Two Worlds
This experimental model blends elements of:
- Angel investing (without personal financial risk)
- Traditional VC scout programs (with greater autonomy)
Founders are encouraged to mentor their portfolio companies, adding value beyond capital.
The Founder-Investor Advantage
Zeller explains why founders make exceptional investors:
“The best founders building the best companies naturally become the best investors. I’ve never met a genius-level technical founder building an incredible company who was bad at investing.”
Key advantages founder-investors bring:
- Deep understanding of startup challenges
- Constant exposure to top talent
- Industry-specific expertise
- Authentic founder-to-founder connections
Who Qualifies for the Program?
While Powerset maintains flexible criteria, ideal candidates:
- Are actively building a tech company
- Have organic connections in the ecosystem
- Demonstrate product-market fit
- Show long-term commitment to their venture
The Deal Breaker
Zeller explicitly avoids founders who:
- View Powerset as a path to becoming full-time VCs
- Lack commitment to their own companies
“Those planning to spend the next 5-10 years building their company make the best investors. They won’t waste time on marginal opportunities.”
The Future of Founder-Led Investing
Despite the challenges of working with time-constrained founders (some invest heavily while others never deploy funds), Zeller believes this model will generate exceptional returns by leveraging founder insights that traditional VCs often miss.
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