Prospinity Shares College Students’ Future Wealth

A startup called Prospinity is connecting college students in income-sharing “success pools” that redistribute wealth among a cohort of ambitious peers.

Why It Sells: The students already involved with Prospinity’s success pools know they all have the potential to realize their dreams and strike it rich… but the odds of all of them actually doing so are slim. So, they’re investing in the community on the chance that one of them rises to the top. Talk about a new way of diversifying your portfolio.

Behind the Payments: Prospinity — founded by former Yale students Aarya Agarwal, Samvel Antonyan, Andrea De Berardinis, and recently-graduated University of Chicago student Andrea Zanon — just raised $2 million from Slow Ventures for their year-old startup.

• Prospinity allows cohorts of students studying in any field to legally bind themselves together to contribute a part of their income for a set number of years (usually 10) that gets distributed evenly among the group annually. The company takes an annual 5% fee.
• Members can start collecting distributions even if they’re still in school. They can also set a minimum income limit so that if someone in the group falls below it, they can’t participate in that year’s distribution.
• Hundreds of Yale, MIT, Harvard, and Princeton students are already using Prospinity. With the funding round, the founders are looking to expand it beyond the Ivy League, starting with UC Berkeley. 
• That process involves the startup pinpointing “a handful of high achievers to create or join a success pool,” per Insider.

Closing Thoughts: Agarwal said the philosophy behind Prospinity is 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 break even or fail.” Or, as Slow Ventures managing director Kevin Colleran calls it, “Part insurance policy, part lottery ticket.” Making money on the way to realizing your dreams can be a long road, especially as the earnings timelines of certain fields are so vastly different. Prospinity may provide an avenue for how to hedge your bets on yourself.