Founder Collective

Founder Collective is a seed-stage venture capital fund, built by a collection of successful entrepreneurs, providing the first professional round of capital to promising entrepreneurs with compelling business concepts. Founder Collective is focused on helping the next generation of great entrepreneurs build important and lasting businesses. Founder Collective focuses on technology-driven companies across a broad range of industries. The partners at Founder Collective have all built and sold technology companies.  

In an interview with TechCrunch, founding partners: Eric Paley, David Frankel, and Micah Rosenbloom were asked about how Founder Collective has changed since it was founded. They said:

Eric Paley: “From the beginning of Founder Collective, we’ve done two kinds of investing, $1 million to $2 million checks, where we lead and take a board seat, and around $400,000 investments, where we participate. We’ve seen the average valuations rise over the last five years, but we’ve tried to stay disciplined.”

Micah Rosenbloom: “So far in the COVID era, check sizes aren’t that different. It’s been more of a binary situation where startups that are deemed as “on-trend” can still command healthy valuations. The companies that are pre-market, or in an out-of-favor category that might have gotten funded in February are having a hard time getting funded. But we try not to be influenced by thematic trends.”

David Frankel: “One pleasant surprise has been how quickly most of our companies have responded to the “new normal.” Some have reopened rounds to put a little more capital on the balance sheet, while others have found strategic.”

According to its website, Founder Collective believes in:

The future belongs to the weird & wonderful: 

“Founder Collective is deliberately anti-thematic. We don’t have a thesis, but when Embark showed us the future of doggy DNA, we couldn’t resist. Visionary founders have shown us that the weird use cases of today can become the hot themes of tomorrow.”

Organic venture capital is rare and valuable: 

“We invest for the seed stage which means when it comes time to raising the next round we are fully aligned with the founding team. We have structured the firm to be as aligned with the entrepreneur's financial interests as possible – at our short-term expense. We’re founders first, financiers second.”

The team at Founder Collective is realising its mission by:

Peer-to-peer investing: Having gone through the ups and downs of establishing a business or a technology company, the founder partners feel empathy and respect for those who are leading the startups. This, as they call it, is peer-to-peer investing. In their own words:

“Everyone at Founder Collective has started a technology company. We love building stuff. We aren’t investors who sit in an ivory tower analysing spreadsheets. We’ve lived through the emotional roller coaster of leading startups so we have huge respect and empathy for our founding teams. We think of it as peer-to-peer investing.”

Right fund for the seed stage: According to Founder Collective, most large venture funds are not structured enough to align to founders' need and ethos at the beginning. Founder Collective avoids protracted decision-making and diligence. 

According to them:

“We dilute alongside our founders over time. So we have the same incentives as our founders to increase the value of the company in future financings.”

Collective Support: Founder Collective provides a platform where founders and CEO can interact and learn from each other, both offline and online. 

“With over a hundred companies and hundreds of exceptional founders, the thing we love the most is the founder “collective” community: a willingness of our founders to help each other. Think of it as having the collective support of some of the best founders in the startup world", they say.

According to its website, the mission of the fund is to “build the most aligned VC fund for Founders at the seed stage.” 

According to the partners at Founder Collective"

“Our goal is to make Founder Collective the firm we wish had existed when we were starting out. Venture capital is a dangerous commodity – we provide an instruction manual.”

Airtable, Agni, BuzzFeed, CashDrop, Clair, Compstak, Conceive, Coupang, CoverWallet, Crayon, Creative Market, Custora, Databox, DataIoT, Dia & Co., IAS (Integral Ad Science), PillPack, SeatGeek, theTradeDesk, and Uber, to name a few.