Steph Mui, PIN: Robinhood for Startup Investing
Company Snapshot
PIN is the easiest way to set up and launch an investment club. PIN does all the boring admin, legal, and tax work required for groups of investors to invest in startups together regardless of their accreditation status. PIN is currently a closed platform where you need to be invited to a community to join.
- Founded: 2022
- Headquarters: New York (remote-friendly)
- Notable Investors: Initialized Capital, NEA, Industry
- Total Funding: $5.6 million
Apply here to work at PIN.
What I like about PIN
When working in venture capital, Steph realized how at odds the fundraising environment can be for founders and VCs who have different incentives. Misalignment can arise due to differences in priorities, expectations, and long-term goals, resulting in conflict in areas such as exit strategy, board control, growth expectations, and more. PIN aims to solve this by allowing startups to take money from groups of individuals regardless of their accreditation status — their users, customers, and passionate fans — and, as a result, create more founders and investors who are genuinely aligned with each other. Further, she believes these communities can add value alongside venture capitalists in ways they can’t.
Several reputable investors also believe this.
I joined a startup called Wefunder for similar reasons, but we really only saw glimpses of this vision with a handful of the top startups listed on the platform — Mercury, Replit, etc.
One startup we worked with saw a 3x increase in spending when a customer became an investor. Another reported a significant increase in someone’s likelihood to refer the product after they invested. But, these wins, which demonstrate the power of allowing your community of users and customers to invest, were few and far between.
Two dynamics that seemed to influence this a lot were the quality of the company and the mismatch between companies and investors.
Due to poorly designed initial regulations, many startups with alternative funding options avoided equity crowdfunding. Much of these regulations were reformed in 2021, but not before it created signaling risk – the idea that raising on an equity crowdfunding platform would negatively impact your future fundraises. As a result, only a handful of “good” startups have raised this way. This is significant because the better a startup, the easier it is to help them. Investors crave social capital, and it is low risk to help startups like Mercury, Replit, etc., but it is much more challenging to help startups without all the external market signals and credibility.
The second dynamic is around the mismatch between companies and investors. A startup listed on an equity crowdfunding platform may attract lots of small investments from people worldwide. These people may have different backgrounds, skills, and networks. While the fundraise may help the startup meet its primary goal of raising money to continue operating, it rarely has enough demand for the founder to pick who is included in the round individually. As a result, the startup often ends up with several hundreds of investors who are not users, customers, etc., and may be unwilling or incapable of adding significant value to the business after they invest.
After talking with Steph, they clearly designed PIN to address these challenges.
To attract high-quality startups, PIN focuses on onboarding communities with built-in sources of great startups to invest in. One example of a strong community using the product is Coinbase alums. ex-Coinbase employees have already founded 60+ startups, which have raised $550 million+ in funding.
While I don’t have data on which startups the Coinbase alums on PIN have been able to invest in, it’s easy to see they have an excellent source of startups.
And, unlike with equity crowdfunding platforms, startups on PIN are taking money from specific communities who typically share a similar background or expertise (YC batch mates, Coinbase alums, Stanford MBA alums, their customers, etc.) rather than opening up their raises to the general public. As a result, startups are getting investors more likely to actually add value and increase the startup’s chances of success.
With strong product velocity, several dozens of communities already signed up, and significant work done on the product and partner side to lower their fixed costs to support a lower AUM threshold for communities to start investing, Steph and the PIN team are in a good position to materialize their vision.
Steph has accomplished a lot in her career — J.P. Morgan out of college, worked at a top VC firm, attended Stanford for her MBA program, and is now a venture-backed founder — but I’ve been more impressed by her humility, determination, and ability to build relationships. In all my interactions, she focused on how she could help others and never asked for anything in return. Startup investing, and Silicon Valley as a whole, is built on networks. Steph’s long-term approach to relationship building will bank her a lot of goodwill that will pay dividends for PIN in one way or another.
PIN may have the right investment vehicle to get allocation in the best startups, leverage the community to actually add value, and, as a result, democratize access to startup investing.
Interview Transcription
Edited lightly for clarity.
Kieran: Hi, Steph. Thanks for joining me today. Can you briefly introduce who you are and what PIN is?
Steph: Thanks for having me. I'm Steph, and I'm the Founder of PIN. My journey with PIN started so long ago that it's funny to look back. To make a long story short, my background before becoming a founder was in venture. Then, I went off to business school, where I was fortunate enough to be pulled into a project my classmates were looking into: how to start a class fund to invest in our other classmates' startups. They pulled me in because of my experience in venture thinking that we'd go to a lawyer and a tax firm and set this up pretty instantly, but it was quite the challenge to get all the logistics together. The two main obstacles were we had 400 classmates, all of whom expressed interest in joining, and we had a fair number of unaccredited folks who wanted to participate but couldn't fit into a traditional fund structure. So, for a year and a half, we worked on inventing a new vehicle and repurposed something called the investment club, which allows for more inclusivity, meaning unaccredited investors can participate in making startup investments. After our initial fund launched in June 2020, we realized a lot of schools, company alumni, and interest groups wanted to use a similar structure. We built PIN to serve as a better product and ops layer to do the arduous and tedious admin work. We did it manually the first time around; now everything is automated. So, that is a little about us.
Kieran: Great overview. The idea for this company stemmed from solving your needs with your Stanford graduating class. Now that you've worked on the business for a few years, why are you still excited about this opportunity?
Steph: Coming from venture, I was passionate about this space and working on it before I became a founder. Now, I have even more appreciation for this because I realize how disconnected; I don't want to say broken because that sounds dramatic, but how kind of at odds the fundraising environment can be with founders and VCs who have different incentives. Then there is the legal restriction and rules aspect that I find to be frustrating -- smart, passionate, intelligent people who are very well educated in the space can't invest because they don't have a certain network or are completely ineligible from investing in startups. Meanwhile, it's legal to buy lottery tickets and gamble. So, a lot of these things frustrate me. In my wildest dreams of what PIN becomes and how we like to pitch it, we hope PIN can be the Robinhood for startup investing. We want to make things more transparent, educational, and accessible. I'm passionate because I think we are uniquely positioned to align incentives amongst multiple parties and create more founders and investors aligned with each other and their missions compared to today's environment.
Kieran: There are several startup investing products, equity crowdfunding platforms, syndicates, venture funds, etc. Can you talk a bit more about your positioning?
Steph: PIN shines with all the backend stuff specifically for community investing vehicles. So, if you have a large group of individuals, we have some groups with institutional capital, but primarily, we focus on individual investors of all sorts -- 70% of the investors on our platform are unaccredited and the rest are accredited. I stand by our product as the best and easiest platform to not only set up all the logistics to take investment from your community but also manage and utilize them to help you, hence our name power in numbers. Compared to a traditional fund, each investor on PIN is involved in choosing the underlying investments. Additionally, investors on PIN respond to more founder requests and add value by recommending candidates for hiring requests, testing new products, amplifying social media and Product Hunt posts, etc., relative to LPs in traditional funds, which tend to help more passively. It's a really powerful mechanism that funds, even with large amounts of capital, can't necessarily whip up very quickly because they don't have that power of community. Regarding equity crowdfunding, our missions are very aligned. I love what they've done from an inclusivity and education perspective. Still, I find there to be a disconnect, not always, but commonly, between equity crowdfunding types of companies and venture-backed companies. As much as I admire how much Reg CF has pushed the needle on things, it's still very restrictive for many founders. They pay hefty legal costs and need to spend time preparing extra financials and other documents to participate in Reg CF. Frankly, many venture-backed startups just don't participate, which is unfortunate. I think the cool thing about PIN is that it fits more like a fund in the sense that we invest in similar types of companies, show up as one line item on the cap table, and follow a similar investment process. We also don't impose the more arduous financial and legal constraints that Reg CF does on some founders.
Kieran: I worked at an equity crowdfunding platform, Wefunder, a few years ago from 2018-2020, so I understand this space pretty well. When I look at your product versus equity crowdfunding, I think the one significant need you're solving for is the adverse selection aspect that equity crowdfunding platforms are unfortunately seeing. How do you think about controlling for quality?
Steph: Without a doubt, our long-term mission is to empower any group of people out there who wants to form a community to invest in something they know about, care about, or are really passionate about. We want to enable that super seamlessly, but right now, I think we're playing the super long game, and also, with our limited time and resources, to your point, we're focused on quality and building both sides of the marketplace. By marketplace, one side is angel investors interested in investing, and the other is founders excited about accepting capital. So, instead of having to build both sides of the marketplace in tandem, which is every marketplace's problem, our strategy is focused on enabling communities that already have a fantastic source of great founders to invest in, usually their own members or alums from their relevant group. So, I'd say, especially, that's why schools and company alums have been some of our biggest success stories — founder cohorts and accelerator programs, too, because they provide both the capital and amazing founders to invest in. So, speaking of quality control, I'd say that's where we focus our time. We accept ~20% of our waitlist signups, and we hope it will be much higher in the future.
Kieran: I want to dig into the customer a bit more. I know any community is your long-term vision, but right now, you're focused on communities that have a great source of founders to invest in -- school alums, accelerators, etc. When you're talking to a customer, what is the most attractive part of the offering? What gets them sold?
Steph: I'm still the end customer, and my banking and finance days taught me that I absolutely hate doing repetitive tasks. I'm super proud that PIN makes it as easy as possible for leaders to invest as a community. I've seen this first-hand since I still run several communities, many from before PIN started. Another stat that highlights this is that almost all of our community leaders on the platform, except for one, is part-time, meaning they are busy founders, investors, and operators with full-time jobs who can do this on the side because of how easy we make the logistics on the backend. The second part is around community and interest in investing. I genuinely believe this is the best model, especially if you're new to angel investing. Not only do you get access to a great group of people who share a similar interest, but the group themselves make ~12-24 investments, meaning you get a diverse group of investments for one check. The most common minimum check size I hear is $5k, maybe $1K, but you're not going to get a diverse index of companies compared to when you invest on PIN. I feel like PIN is the closest thing to an ETF, but for startups.
Kieran: On the flip side, when you reach out to a community, and they're not interested, where are you getting the pushback?
Steph: Our biggest challenge this year has been the macro environment. Speaking to the communities who are the best fit for us, we found company alums to be exceptional because everyone wants to emulate the PayPal mafia, where many employees went on to start the next great wave of companies, and other employees would invest in them. Company alums are one of our top customer segments to date, but I think it's harder right now when layoffs are being announced every other week, consumer spending is very tight, and things like that. It's this weird dynamic where I feel like more entrepreneurial talent is coming out of these groups than ever before in part because of need; people are losing jobs and, therefore, finding other opportunities or starting companies they might not otherwise have. On the flip side, the demand or interest in investing is certainly smaller and more measured than it was even compared to a year and a half ago. So, that's our biggest challenge.
Kieran: What steps are you taking to adapt to the new macro environment?
Steph: Historically, we haven't been able to accept groups with less than a million dollars in assets under management (AUM). Our average check size is $10K-$15K for an individual, so getting to $1M AUM is quite a hurdle and requires a big community. To adjust to the macro environment and to further our mission of inclusivity, we updated the product and got a more diverse group of partners to reduce the threshold. More product automation and a new set of partners allowed us to reduce several fixed costs, including on the legal and tax side, which we did not have much control over historically. These adjustments allowed us to improve the economics of our business and lower the minimum AUM needed to join the platform. As a result, we've seen increased adoption from new groups.
Kieran: I know many of the initial communities you onboarded came via inbound, word of mouth, or from the TechCrunch post. What growth channels have you been experimenting with, and have you found anything that seems repeatable or that you are confident will work in the future?
Steph: We're focused on two channels. One is more proven, and the other is newer, but we're excited about it. The first channel is Twitter. It started as an experiment and a fun team bet. Historically, I've never been a very public-facing person, but I've come to love Twitter. It's where our whole audience, founders, VCs, and tech operators hang out. We've been posting there a bunch. I've never seen myself as a thought-boy, thread-type person, even though I admire those folks who do it well, but I tend to post tech memes and very honest takes about being a founder. It's very self-deprecating humor, and we've been fortunate enough to develop a brand and virality around those tweets that have driven many customers to our waitlist. Outside of word of mouth, that is our second biggest channel. The second channel, which is newer, is referrals from the community. One feature we're really proud of is enabling founders to tap their communities to help them with things such as referring job candidates, boosting social announcements, and more. So, we have a bounty that is always up to reward people for referring new customers. There is a monetary reward on top of recognition. We find it fun that we get to use our product and see our incentives work live while also getting to reward our community members for being our biggest advocates. It's really exciting to see.
Kieran: What do you see as the big risks or challenges with your business and how are you trying to solve these things?
Steph: I'm constantly thinking about how we make our platform sustainable for groups. I mentioned how we needed to figure out how to reduce costs to support a lower AUM earlier. We got it down to $500K and now $250K. We're chipping away more and more at these factors through a combination of product automation, partners, and other tactics. The thing with legitimate funds is that they last a long time, sometimes 10-12 years, and there are obligations each year. So, not only do we have to think about providing great utility to invest and support them on the backend this year, but we also need to ensure we can support them sustainably for the lifetime of the investment vehicle without exposing them to the variability of labor costs and other things that may impact them. We're constantly thinking of how we build our product and work with partners to have more control over the costs. This may mean bringing more things we rely on partners for in-house over time. The second challenge is balancing growth and quality. We want to make sure there are good actors on our platform. Part of the reason why we're still in waitlist mode instead of a complete self-serve model is that we want to be extra cautious that there is never a case where people are abusing our technology to scam people or do other things. We take the consumer trust side of things very seriously and know that we're in this for the long haul and building PIN into a brand we want people to respect and trust highly. We're unbelievably cautious regarding onboarding and vetting folks before they use the platform.
Kieran: I want to transition to questions regarding the team. Can you talk a bit about the team, and how would you describe PIN's culture?
Steph: We are a mighty seven people. So, really, really small, and I want to be small for quite some time. We do have some open roles right now, which is exciting. This may be cliche, but I think our small and nimble team is one of our biggest superpowers. It amazes me how fast we're able to respond to customer requests and adjust to different business demands that come up. I really love it. We're mostly remote, but we do have a New York presence. We have people across Boston, Nashville, San Francisco, and more. We also have quarterly retreats. I think the thing that defines us as a group is that we are a great team, but we also have strong individual expertise and trust in each other. For example, the person on our team who leads strategy, ops, and tax is our go-to person, and we believe in them for everything related to that. It's the same thing for engineering. So, even though we have a team mentality, we have a lot of trust in each other as individuals. Whenever we bring people on, we're looking for experts in their specific domains and give them a lot of individuality and autonomy as a result.
Kieran: What other characteristics do you look for when hiring?
Steph: Given the nature of our work, one of the biggest things is detail-orientedness. This is especially important since our product touches people's personal capital, taxes, and legal. We need people who nail the details and care about getting things right 100% of the time. I have been in roles where detail-orientedness is not as valued as a skill. So, you'd be surprised at how interesting it is to vet for. The second thing is self-initiative. For a while, we joked about how almost everyone on the team was a founder. It's not necessarily true anymore, but I love that almost everyone on the team has some entrepreneurial experience, whether as a founder or some kind of side hustle or project where they decided they wanted to learn about something and explored it on their own. That's a powerful signal when people show a lot of self-initiative and autonomy to do something they are passionate about because they want to and not because a boss or manager is telling them to.
Kieran: Can you highlight some of the roles you plan on hiring for now or early next year?
Steph: We're looking to add another engineer to our team. We have a web product with a mobile-friendly interface, but it's not an app yet. A top product request from our customers is to build a mobile app so the experience is more frictionless, similar to how they would message people for other things. So, we're looking for an engineer, particularly someone strong in mobile. Another role we're hiring for is a Head of Content. As I mentioned, content has been one of our biggest growth drivers. Given my inclination, we leaned into humorous content, but we're looking for someone passionate about tech, VC, and wants to work closely with founders and give us more balance. We hope they can use data and dig up fascinating stories.
Kieran: Last question, what needs to be true for this business to become very big?
Steph: We want to be the Robinhood for startup investing. Our near-term roadmap focuses on a few key customer segments within tech and supporting communities that have both sides of the marketplace nailed down. Our bigger vision is to support any interest group from any geographical area to invest in and come together around whatever they are passionate about. So, step one is to knock this part out of the park with regard to the tech community; then, we want to go beyond that and advocate for why investing in companies you care about is great and the best way to align incentives.
