Amazon is introducing private investors to high-risk start-ups in a new pilot program

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Andy Jassy, chief executive officer of web services at Amazon.com Inc., speaks during the Amazon Web Services (AWS) Summit in San Francisco, California, U.S., on Wednesday, April 19, 2017.










David Paul Morris | Bloomberg | Getty Images

Andy Jassy, chief executive officer of web services at Amazon.com Inc., speaks during the Amazon Web Services (AWS) Summit in San Francisco, California, U.S., on Wednesday, April 19, 2017.

Amazon is testing a new way to bolster its relationship with start-ups and possibly bring in more capital to the ecosystem. The fledgling effort, known as the Amazon Web Services Pro-Rata Program, is designed to link private investors with companies that use AWS, as well as venture funds whose portfolios are filled with potential cloud customers. Amazon is not investing money through the program.

Brad Holden, a former partner at TomorrowVentures (founded by ex-Google CEO Eric Schmidt), and Jason Hunt, who are both part of AWS’s business development team focused on angel and seed relationships, according to an email they sent to investors in January.

“The Pro-Rata Program is a new pilot intended to connect family offices and venture capitalists for specific investment opportunities from the AWS ecosystem,” according to the email, which was viewed by CNBC. “Pro rata” refers to the rights investors have to put money in subsequent rounds.

AWS has built a $25 billion enterprise tech behemoth by luring big companies and government agencies onto its cloud, and it now accounts for the bulk of Amazon‘s profit. Ever since getting off the ground over a decade ago by providing computing and storage services for start-ups, AWS has counted on young and emerging companies for a big part of its success. Start-ups bring innovation to the platform and some, like Lyft, Pinterest and Slack, grow up to be large enterprises with hefty technology budgets.

Previously, Amazon and its smaller cloud competitors, Microsoft and Google, have attracted start-up developers through promotional credits that let them get started for free before they’re even generating revenue. Amazon also has a program called AWS Activate, which partners with over 3,000 incubators, accelerators, venture firms and other groups to expand use of the technology.

The new program is another effort to bring more new start-ups into the fold.

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