Prospinity
When they were freshmen at Yale, Aarya Agarwal and his roommate, Samvel Antonyan, struck a handshake deal.
If either of them ever started a company that went supernova, they would sign away 10% of their income to the other.
"We shook hands, and at the moment, it was a bit of a joke," Agarwal said. "But we realized the deal actually made a lot of economic sense. It was a way to multiply by two times our chances of doing something super improbable."
Now, their startup, Prospinity, allows college students to enter into similar contracts. Through its platform, smart young people can join "success pools" of other smart young people who put a few percentage points of their annual income into a shared pot. Each year, the pot gets distributed evenly among the group. The idea is that if one of them becomes the next Mark Zuckerberg or Bill Gates, they will all succeed.
Just a year old, Prospinity is already used by students at Yale, MIT, Princeton, and Harvard, with job offers at firms like Blackstone, Bridgewater, and Amazon. Now, Prospinity has raised $2 million in a round led by Slow Ventures managing director Kevin Colleran to reach more students beyond the Ivy League.
Prospinity and Slow Ventures declined to comment on the valuation. Patrick Chung, a managing partner at Xfund and an investor in Sam Altman's first company, Loopt, also joined the round.
Slow Ventures has explored income sharing as an investment strategy before. It set aside $20 million from recent funds to buy equity in influencers, taking a percentage of their future profits for a set amount of time in exchange for upfront capital. Regulatory filings show Slow is now raising $275 million across two new funds, which Fortune first reported.
When Prospinity rolls out to a new university, it researches the student body and selects a handful of high achievers to create or join a success pool. They can hop onto Prospinity, check out the profiles of existing members, and filter by university or industry. Prospinity is now recruiting students from the University of California, Berkeley, to join the platform.
Prospinity says the contracts are legally binding and can ensure everyone pays their fair share over the agreement's term, typically 10 years. Pool members can also set a minimum income; if someone's earnings fall below the threshold, they're excluded from that year's distribution. Prospinity takes a 5% distribution cut in exchange for providing the technical and legal infrastructure to execute the contract.
While the company's hundreds of members are mostly still in school, they can start collecting distributions as other pool members contribute.
Agarwal, who studied computer science and economics at Yale before he dropped out to focus on Prospinity, said the company's premise is loosely based on the power law, a principle in venture capital that describes how a small number of investments often create the majority of returns, while the rest either break even or fail.
"As markets get more efficient, you're going to see more and more of these distributions where a few people make it big, and then everyone else tends to be left behind," Agarwal said. "I think success pools are going to be a very important way to hedge against that sort of uncertainty."
The company's founders, Agarwal and Antonyan along with Andrea Zanon and Andrea De Berardinis, belong to a larger success pool that agreed to share 2% of their income over a 10-year horizon.
Hassaan Qadir, a Yale senior who took a semester off to start a company developing software for biology researchers, joined a Prospinity pool. He later folded the startup and accepted an internship at AppLovin, a Palo Alto company that provides marketing services to mobile app developers. Qadir plans to start another tech company someday and said being part of an income-sharing agreement with other founders gives him more chances of hitting the entrepreneurial jackpot.
Law school students, finance associates, and aspiring entrepreneurs compose his success pool of about 30 members.
"Theoretically, someone that you know is going to become really successful," Qadir said. "It's not totally up to who works the hardest."
Aron Ravin, another member of that same Prospinity pool, hopes to capture some potential upsides of being an entrepreneur as he climbs the corporate ladder. He joined that Prospinity pod during his senior year at Yale and now works as an associate at a prominent hedge fund. Ravin stands to make good money in finance, although he said he may not hit the jackpot as someone starting the next Uber or Palantir might.
Ravin declined to share how much of his income he's contributing to the pool but said it's between 1% and 5%. At a Prospinity mixer in New Haven, Connecticut, he mingled with some international students working on a sustainability venture, which got him thinking.
"It's a little promiscuous of me," Ravin said, "but maybe I'll join another pool in the future. Share the love."
