Pioneer Fund has held an initial close on its debut fund, which is targeting $20 million, according to managing partner Jason Gray. Its investors are Y Combinator alumni, and its strategy is to back other YC alumni startups.

Network effects: Since its 2005 launch, Y Combinator has coached hundreds of startups, including notable successes like Twitch, Dropbox, Cruise, and Airbnb. It's no surprise that alumni entrepreneurs are investing their own money into others in the network.

  • Jason Gray and Jared Heyman are leading the fund, with dozens of YC alumni already on board as investors and advisors (you can't do the former without also doing the latter). The fund isn't formally affiliated YC.

Pioneer is far from the first instance of YC alumni using their new wealth to invest. Others have done so as angel investors, via AngelList syndicates, and by forming more traditional VC firms like Initialized Capital, although the latter doesn't exclusively invest in YC startups.

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