Boris Silver and Alex Mittal believe entrepreneurship and venture capital can be forces for good in the world, capable of supporting innovators and their drives to meet and solve humanity’s problems and needs. That is why Silver and Mittal are disrupting private equity. It’s in need of a 21st century refresh—through digitization and democratization. It’s also why in 2012 they founded FundersClub, the world’s first online VC firm, seeking to support the world’s top startups. They didn’t stop there, releasing a new service called Partnerships that allows accredited investors access to opportunities from experienced startup investors.
FundersClub’s first revolution involved giving a platform to accredited investors to invest as little as $3,000 in one of the startups in its portfolio. With over 11,000 accredited investors and over $25 million invested on the platform to date, $3,000 checks have added up to significant seed-stage funding for the more than 100 portfolio startups. These companies not only get the benefit of this crowdfunding; they can tap into the expertise and connections of FundersClub investors, as they would through traditional VC. And like traditional VC, investors and founders expect and hope for exits, like the four FundersClub companies that were acquired recently. Successful FundersClub companies have subsequently garnered the support of leading traditional VCs like Sequoia Capital, Andreessen Horowitz and First Round Capital.
With Partnerships, Silver and Mittal license out the digital platform that powers FundersClub to experienced investors, who can then use it to create their own online VC fund while sharing a percentage back to FundersClub. Partnerships was launched in the second-half 2014 with four investor partners initially lined up.
The service continues where the FundersClub co-founders started—addressing pain points they both experienced as entrepreneurs and investors. Silver built a leading network of Facebook-based fantasy sports games, which eventually was sold to Yahoo. He started exploring angel investing but grew frustrated with the challenge of finding solid investments and the friction involved. Mittal is a repeat entrepreneur (see his previous startups, Innova Dynamics and Crederity) who grew tired of the time and energy suck that is fund-seeking. In essence, they are both inveterate problem-solvers.
Mittal realized as an undergrad that entrepreneurship would allow him “to look at the world, discover problems that people are experiencing and solve them. That seemed like such a pure, efficient and helpful pursuit for the world, and it really drew me in.”
Beyond finding solutions, Silver is hooked on continuous learning, growth and exploration.
“I view things as a continuous progression. It’s about learning new things, and exploring what I haven’t explored yet,” he says.
In talking with them, one gets the sense that they still have much to prove with FundersClub. Ask them why they are so successful, and they practically deny any such thing. Mittal immediately mentions how he keeps his first startup failure (perhaps his only) in mind always.
Another driver of their success is that the pair are enjoying the ride with each other—having met way back on Penn’s campus outside Huntsman Hall in line at a Hemo’s food truck and reconnecting when both found themselves in San Francisco.
Speaking about himself and Silver, Mittal says, “It’s almost scary sometimes how we anticipate situations and resolve them and work as a team.”
The FundersClub team has grown into 11 full-time members, and the collaboration among them makes up some of Silver’s favorite moments at FundersClub—creating and launching new products and features, becoming more cohesive and effective as they do.
“I find that process in and of itself both challenging and rewarding,” he says.