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Cases

Elizabeth Yin and Eric Bahn used the accelerator that funded them as the door into investing

Both went through 500 Startups as founders, sold their companies, got hired onto its investing team, then left to raise on strategy rather than credentials.

Before

Both were founders who went through the 500 Startups accelerator and sold their companies. Yin founded the advertising network LaunchBit, acquired by BuySellAds. Bahn co-founded Beat the GMAT, also acquired.

The move

They used exit credibility to get hired into the investing team of the accelerator that already knew them, which gave them real reps on someone else's balance sheet before they ever asked anyone for money. Then they left and raised on a differentiated strategy rather than a resume: radically small, fast, high-volume pre-seed checks, at a decision speed incumbents structurally could not match.

The turn

An 11.5 million dollar debut fund in 2018. Yin has written that it took about twenty versions of the deck to get the story right, because on the fundraising circuit every other manager had the same credentials they did.

Timeline

  • Founders, both through 500 Startups
  • Both exit their companies
  • Hired into 500 Startups as entrepreneur in residence and partner
  • 2017 to 2018 raise an 11.5 million dollar Fund I
  • 2026 Fund IV closing near 50 million dollars

What this route asks

A completed founder loop, ideally through a programme that can then employ you. The harder lesson is the second half: credentials get you considered and never get you funded, so the fund itself has to be a different shape from what already exists.

Sources

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