Anything's Possible

In late 2008, in the midst of the financial crisis, a small band of founders got together and started imagining the fund that we all wished existed when we started our own companies. We felt that there was a gap in the market for a fund that was dedicated to the seed stage and run 100% by founders and for founders – we called it peer-to-peer venture capital.

Founder Collective I was an exciting experiment.  We had all been actively angel investing for several years before we started the fund, but would it work for two of us to be full-time while five of our partners ran startups day-to-day and worked for the fund part-time? Would smart entrepreneurs appreciate the unique elements of our offering and want to work with us?

Founder Collective has now been in business for a little over three years.  We strive every day to live up to our mission of being the most aligned fund for founders at the seed stage.

We’re delighted today to announce that we’ve closed Founder Collective II – a $70MM fund continuing the work that was started by FCI and based on the same founder-centered vision.

We support this vision by looking at the world from a founder point of view and focusing our investments at the seed stage.

Every person involved in Founder Collective is an entrepreneur.  FCII, like FCI, will be managed full time by the two of us, with our other partners working part time for FC while primarily focusing on their day jobs of running companies. We are proud Founder Collective has had the privilege to back our own partners, Zach, Bill, Caterina, Chris, and Micah, on their startups. We feel that keeps us uniquely connected to the day-to-day challenges of running a fledgling company.

By dedicating ourselves to seed, we deliberately avoid the misalignment of being a net buyer round after financing round, while our founders are net sellers.  We are not buying an option on the future. Our founders don’t feel compelled to constantly oversell to make sure we keep buying. We invest at the beginning and then sit on the same side of the table.  That makes it easy for founders to talk to us about the ground-truth of their businesses, without fear that we’ll lose enthusiasm, and hopefully puts us in a better position to help.

Founder Collective is committed to backing exceptional founders and their visions of the future.  We don’t seek out founders that validate our particular thesis within a defined set of themes.  Show us a big business that can be transformed by technology and great people eager to prove it, and we want to be part of the journey whether it’s democratizing text books, fundraising for medical care, automating agriculture, rapid testing for food safety, or rethinking ground transportation.
 

We are deep believers in the entrepreneurial ecosystems of our home turf of NY and Boston.  This will remain our focus, while we’ll continue to invest in the Bay Area where three of our partners now live.  

Chris mentioned in his original blog announcing FC that the word “Collective” may sound a bit radical, but it is intended to emphasize our focus on peer-to-peer investing.  Over the last three years we’ve tried hard to honor our name.  Our founders actively help each other and help our fund.  We learn from them every day.

We see Founder Collective II as the next step in building a sustainable collective that will contribute to the startup world for many years to come.

– David Frankel & Eric Paley