Powerset, established towards the end of 2022, represents an investment initiative with a straightforward proposition: What if the most successful investors aren’t venture capitalists but rather other founders who juggle writing checks during late-night programming marathons and board gatherings?

On an annual basis, Powerset, initiated by former AngelList member Jake Zeller and Athena’s founder Jonathan Swanson, allocates $1 million to five to ten entrepreneurs to invest in new ventures—potentially increasing their returns if those founders secure lucrative investments. Participants from previous cohorts consist of Paul Copplestone, the developer platform Supabase’s co-founder; Jordan Tigani, analytics firm MotherDuck’s co-founder; and software engineer Wes McKinney, the creator of the Python pandas library. Applications for the third cohort become available this week.

Zeller portrays Powerset as a form of decentralized venture fund: There is no curriculum for “teaching” founders investment methods, no deadlines for when the capital should be deployed, and no panel of managing partners to dismiss a deal. Founders retain 15% of the profits a deal generates.

It’s an innovative model situated between angel investing—though founders are not utilizing their personal funds—and conventional VC scout programs, where VCs engaged individuals, including founders, to assist in identifying deals. Participants are then motivated to mentor and counsel portfolio startups, akin to any investor.

However, in Powerset’s scenario, decisions are left entirely to already overwhelmed and pressured founders. “Some founders are swamped with their ventures and extremely selective, leading them to abstain from investing,” Zeller noted. Alternatively, a founder might swiftly transition from no investing activities “to becoming highly active in short order.”

Despite the challenges, Zeller remains convinced that Powerset’s approach will result in substantial earnings. “Frequently, it’s the top founders constructing the best businesses who happen to be the most successful investors,” he mentioned.

Founders inherently grasp the complexities of developing a startup within their domain and are perpetually scouting for exceptional talent. “I haven’t encountered a genius-level technical founder who’s building an extraordinary enterprise and performs poorly at investing,” he asserted.

No stringent criteria exist for candidates qualifying for Powerset’s program—except for being involved in a company and deeply embedded in the tech landscape. “Hopefully, your company is reaching a scale where you naturally establish some organic connections,” according to Zeller, implying that other founders admire your product and instinctively connect with you.

Nevertheless, Zeller stresses one non-negotiable condition: He doesn’t wish to engage with anyone viewing Powerset as an exit strategy from operating a company, hoping to swiftly transition into a full-time venture capitalist role. “Such individuals will underperform significantly,” he warned.

He insists that the highest achievers in Powerset are founders planning to dedicate the next five to ten years to their own enterprises. “If you’re aspiring to create something profoundly significant, your life’s mission, and core work, investing in a negligible company won’t be worthwhile,” he declared. “It fails to merit the necessary activation energy.”