Playing in the venture capital world requires strong business experience, trusted relationships, and most of all, deep pockets.
It’s a world the average retail investor doesn’t have access to.
Sweater, a Boulder-based fintech startup, wants to change that. The company plans to pool funds from everyday investors into one large venture capital fund that it will invest in high-growth companies.
The company recently announced that it has raised $12 million in seed funding, which it will use to build out its team as it approaches its public launch.
The company’s stated mission is to accelerate generational wealth creation by opening up access to exclusive asset classes like venture capital.
“More and more of our community — including historically underrepresented groups, such as women, BIPOC, younger investors, people of all trades and backgrounds — are seeking financial education and alternative investing opportunities previously reserved for a select few,” co-founders Jesse Randall, Chad Lewkowski and Matthew Klein wrote in a blog post. “It’s pretty amazing how far the retail investing space has come in the last few years with investing arenas in real estate, art, farmland and other forms of private equity exploding into the market.”
Sweater plans to use the fresh funding to build out an investment team while expanding its growth marketing, member experience and product and engineering teams. Randall told Built In he expects the company’s employee headcount to double from 17 to 34 this year.
The company plans invite its waitlist of more than 50,000 people to download the app and become members in the coming months. Members must live in the U.S. and be able to provide a minimum upfront investment of $500, Randall said.
Randall said the fund will be directed by a professional investment team that will conduct due diligence when investing on behalf of its retail investors. The company will share investment breakdowns and companies stories through the app, so members can see how their money is being invested.
Sweater will also invite founders, investors or otherwise qualified industry experts in its member community to join its Scout Network, which helps the investment team find high-quality venture deals.
Similar to other funds, the company plans to charge an annual management fee, which has not been disclosed.
The funding round was co-led by Motivate VC and Akuna Capital, with participation from Acorns co-founder Jeffrey Cruttenden, Betterment co-founder Eli Broverman, Litquidity, MRTNZ Ventures, Bison Venture Partners, Spacestation, First Chair Ventures, Zilliqa Capital, Monsen Ventures, Nick Perez, Jeb Bush, Jr., Ryan Holtzman and Aaron Wolko, as well as YouTube creators Peter Hollens, Andrei Jikh, Nate O’Brien and Jake Tran.
