Why Orange Collective: An Essay on Postmodern Capitalism, Paradoxical Identity, and the Power of Community
"If you can recognize good startup founders by empathizing with them—if you both resonate at the same frequency—then you may already be a better startup picker than the median professional VC."
Paul Graham, "How to Be an Angel Investor" [1]
Orange Collective is a pre-demo day YC index fund selected by YC alumni. If this sounds like an exercise in recursive logic, that’s because it is.
In computer science, a "Y-combinator" is a higher-order function that enables recursion. YC, as an institution, embodies this concept to its core. It’s a place where the recursive nature of innovation and mentorship is not just encouraged but baked into the very structure of the organization. Most YC partners, including its President & CEO Garry Tan, were once YC founders themselves, fostering a self-perpetuating cycle of experience, growth, stewardship—and, naturally, financial returns.
Adding another layer to this recursive loop, YC's 9,000+ alumni are encouraged to submit recommendations during each application cycle, giving signal to the tens of thousands of applications they receive.
This is just one of many alumni crowdsourcing methods sprinkled throughout YC's storied history—past methods range from batchmates anonymously scribbling down who among them is "most likely to succeed," reminiscent of American high school yearbook superlatives, to an application review system where alumni rate and score submitted applications, to alumni cosplaying as YC partners and facilitating group office hours for Startup School participants.
Orange Collective is yet another ripple in this recursion.
Alumni pool their resources in a fund, independent and unaffiliated with YC, which then invests in what they collectively determine to be the most promising startups in each YC batch. Picture a quasi-democratic process involving ranking, voting, and no small amount of passionate debate, where the alumni’s shared wisdom, insider access, and individual biases converge to identify the most promising ventures. The aim is to mitigate risk through diversification while tapping into the collective YC alumni network.
Since its formation in 2023, Orange Collective has brought together over 100 YC alumni, collectively investing in 53 companies across 3 batches. It’s established yet nascent, still growing into the vision it strives to achieve.
However, under the surface there exists a more complex network of motivations and implications. For one, there’s the sheer emotional investment. YC alumni are not just backing businesses; they’re supporting a part of themselves—a younger version that once nervously pitched in an adrenaline-filled 10-minute interview, followed by 12 intense weeks in a high-pressure cooker among dozens of peers, who all share in the imposter syndrome while also navigating the friendly yet inevitably competitive group dynamics. This investment is as much about the nostalgia and community as it is about generating wealth.
Being a YC founder often becomes a fundamental part of one’s identity. The camaraderie, the late-night coding sessions, the shared dreams of disrupting industries and changing the world—all these elements coalesce into a potent sense of belonging. However, this deep attachment comes with its own set of perils. For founders whose companies don’t succeed, the weight of that identity can be crushing. The failure is not just a professional setback but a deeply personal one, entangled with their self-worth and standing within the YC community. The very badge of honor that once opened doors can sometimes feel like a scarlet letter, a reminder of dreams unfulfilled.
When it comes to investment strategy, rather than placing large bets on a few ostensibly promising startups and negotiating a hefty equity stake, Orange Collective embraces what might be called an index investing model—a term more often associated with the staid corridors of finance than the frenetic energy of Silicon Valley. The sheer volume of high-potential startups emerging from YC batches, underscored by its average unicorn rate of 4-5%—a figure that towers over those of other startup accelerators and pre-seed funds[2]—practically demand a broad-based, diversified investment strategy, where price doesn't matter as much as making sure you don't miss the next Stripe or Airbnb.
Looming in the backdrop is Silicon Valley’s unique brand of postmodern capitalism—a world where financial investment intertwines with narratives of social impact, contrarianism, and innovation. Here, making money and changing the world are not mutually exclusive but are instead inextricably linked in a grand, albeit sometimes self-serving, narrative. It's also a realm where the public—perhaps not without reason—often zeroes in on the blurred lines between ambition and exploitation, casting a long shadow over the relentless drive for innovation.
Orange Collective, in this light, is a microcosm of the broader YC philosophy: it’s about betting on people as much as on ideas, about creating value through community and shared experience. It’s a testament to the power of networks and the enduring appeal of the YC brand. Yet, it also serves as a reminder of the inherent tensions in such endeavors—the balance between inclusivity and exclusivity, between altruism and self-interest.
In the end, Orange Collective is a fund by YC alumni, for YC alumni. It’s a living, breathing embodiment of the recursive nature of Silicon Valley’s success machine.