Many of the most successful technology companies like Airbnb and Stripe were started at Y Combinator (YC). For the uninitiated, YC is a startup accelerator: it supports early-stage startups with mentorship, financing, and community in exchange for equity in the company. For every batch of companies, YC hosts a “demo day,” where founders pitch their companies to investors in hopes of raising their first round of financing.
YC Demo Day has always been an invite-only event where specific investors get a first look at the latest YC batch. The event reinforces the exclusivity of the venture ecosystem at large, ensuring that only a select few individuals get access to this lucrative asset class. Enter Stonks: a demo day platform that disrupts this exclusivity by connecting startup accelerators with their massive network of investors. Their virtual demo days give investors access to the latest accelerator batches.
Thanks to Stonks, you no longer need to be invited to YC’s Demo Day to invest in YC startups. We’re excited to announce our investment in their YC Access Fund, which gives Sweater investors exposure to a top selection of companies from the Summer 2022 batch.
The Perfect Collab: Y Combinator, Stonks & Sweater
YC is the preeminent startup accelerator of Silicon Valley (and for good reason). The accelerator was started by Paul Graham and Jessica Livingston in 2005, and has since launched 15 public companies, over 80 unicorns, and 316 private companies valued at over $150M. Going through YC generally makes a company attractive to investors due to the accelerator’s history of churning out winners.
Stonks is comparatively new to the startup investing game, but like Sweater, they’re changing the game for investors. The platform hosts demo day events for accelerators like Techstars and 500 Startups, complete with opportunities to invest in the presented companies. Stonks doesn’t host YC Demo Day, but their investment committee has access to Demo Day deals. To spread the wealth around, they spun up the YC Access Fund, which invests in companies from YC Demo Day as early as possible.
Unlike most venture funds, the YC Access Fund does not charge any carry or management fees. For reference, a typical fund would charge a 2% annual management fee plus 20% on any profit. While we would hope for a great return on this even if Stonks did charge a fee, we're excited about the potential of this special, no-fee opportunity.
Why Sweater Invested
At Sweater, we believe the right to shape the future belongs to everyone, so we’re excited to partner with Stonks because they’re aligned with this vision. Together, we will fund more startups by democratizing access to investment opportunities.
Y Combinator funds top-tier startups
Since 2005, YC has brought together biannual cohorts of startups in order to support talented founders through funding and mentorship. To date, it has funded over 3,500 startups, assembled more than 9,000 founders, and attained a collective of companies with a combined valuation nearing $1T. It’s no secret that YC has claimed its place as one of the most competitive and successful accelerator programs for early stage founders. Investing in a subset of companies from YC demo day is a no brainer given their track record.
Stonks has the right team and network
The founder of Stonks, Ali Moiz, is the General Partner of the YC Access Fund. We trust him to make investment decisions: he has exited two companies of his own and invested in over 75 startups such as AngelList, Gumroad, and Jar. Since launching Stonks in 2019, Ali has scaled the platform to 50,000 users and raised $15M from investors such as a16z, 500 Global, Yes VC and Matrix Partners. The combination of his skills, network, and investment track record give us confidence that he’ll make good investment decisions.
Sweater and Stonks are vision-aligned
Ali created Stonks following his own experience fundraising. It was both a painful and time-consuming—though necessary—part of building a company. Stonks’s platform helps startups raise funding by connecting them to an untapped network of investors, ultimately increasing the number of startups that get funded. Sweater shares this vision of democratizing access and creating a more equitable venture landscape.
The portfolio companies in YC Access Fund span a wide range of industries with a global presence, from Abridge driving logistics automation in India to Momentu creating corporate mental health resources in LATAM to Dr Treat providing personalized veterinary care in the United States. We’re excited to share more and leverage the Sweater community to help these companies succeed. Check out Stonks’s recent announcement for a full list of the YC Access Fund portfolio companies.
While Stonks plans to launch additional funds for upcoming YC cohorts, they also see a future where funds, run by managers outside of Stonks, are able to use the Stonks platform to engage with and raise from LPs.
If you’re interested in learning more about how you can invest in the YC Access Fund and other startup investment opportunities, download the Sweater app today.