For the New York-based financial technology investment firm Fintech Collective, investments are always better with a little help from friends.
During the firm’s recent fundraising for social investment networking and data analysis startup Openfolio‘s $1.8 million seed financing, the firm tapped a curated syndicate of limited partners and contacts among its network of high net worth individuals to back its young portfolio company.
That network brought in an additional $700,000 on top of the $1.1 million Openfolio had initially targeted to launch its vision for a mobile portfolio tracking app that could be shared with friends and colleagues and benchmarked against a community of peers.
Openfolio doesn’t reveal dollar amounts folks have invested, preferring to reveal how much weight different categories have in an investor’s portfolio to reveal information about markets.
The New York-based company went with the syndicate for more than just the money. For Hart Lambur, the co-founder of Openfolio, that Fintech Collective network also represented beta users.
“We think there’s value in bringing a small group of investors to the table,” says Brooks Gibbins, one of the firm’s co-founders. “in all cases, it’s people who are known and people who are vetted.”
In the case of Openfolio, access to the network meant being able to speak with former Gawker Media executives about media outreach, or former Goldman Sachs executives about strategy.
Unlike AngelList syndicates where a broader network of investors write smaller checks, Brooks says the Fintech Collective network cuts bigger checks on fewer deals. The median commitment is $32,000 for the three deals backed by Fintech’s collective so far.
in the network, “there’s $200 million around the table for early-stage fintech deals,” in total available capital, says Brooks. That’s a good bit of firepower that investors can bring to follow-on rounds.
“At scale and over time, we’ll get several investors to several hundred investors who bought in to the thesis and are willing to invest,” says Brooks. That’s a lot of interested parties who can open lots of doors. In the clubby world of financial services friends matter, and the Fintech Collective says it has a lot of friends.