FundersClub, the online venture capital firm that combines funds from individual investors to back companies, plans to announce Tuesday that it’s raised its first multicompany fund to support 11 of the most recent graduates of Y Combinator’s winter class. The new fund backing these companies raised $1.1 million from 86 investors.
FundersClub has pioneered some new ideas in venture capital since it launched last July, but this particular model, which will allow for accredited investors to put money behind Y Combinator companies, is interesting. The New York Times recently wrote an extended profile of the Y Combinator incubator program and how investors are often eager to back the companies. It’s not because they’ve necessarily generated strong sales or traction yet, but because there’s a belief that Y Combinator experience can set you apart and predict future success. So by creating incubator-specific funds, FundersClub could give investors easier access to these companies.
However, Alex Mittal, CEO and co-founder, said the new type of fund wasn’t just created to back Y Combinator companies. Instead, these funds can be raised to support a particular class of companies from any incubator or accelerator program, although YC is just the first one they announced so far.
“Theoretically, it does not have to be Y Combinator,” he said. “We didn’t create this feature just for Y Combinator.”
The 11 companies that will recieve backing from this particular fund include CircuitLab, Goldbely, Medisas, Meldium, Padlet, Prizeo, Screenhero, Strikingly, Teespring and Thalmic Labs. Mittal said the companies were chosen by the FundersClub investment committee, which includes both institutional investors from partners firms as well as FundersClub internal employees.
The group recieved good news in March when the Securities and Exchange Commission told FundersClub that its business model doesn’t violate federal securities rules. And you can read our assessement of the most recent class of YC companies here.
Mittal said that participation in certain funds is generally on a first-come-first-serve basis for investors. He said in the case of the Y Combinator fund, they had anticipated raising half a million dollars, and it came in at $1.1 million.
“We had basically an abundance of interest beyond the half a million, beyond the $1.1 million even, but at some point you have to just proceed forward,” he said.