We were early investors in Uber, Airtable, The Trade Desk, Cruise, PillPack, Desktop Metal, HotelTonight, Whoop, Formlabs and over 300 other great startups. Now, we’d like to be early backers of your career.
About Founder Collective
Founder Collective is a seed-stage venture capital firm built by entrepreneurs. Our mission is to be the most aligned fund for founders at the seed stage. This informs everything we do. We keep our fund size small — approximately $280M over four funds. The GPs are the biggest LPs in the fund — we’re principals, not agents. We’re not lifecycle investors — we invest at the beginning and align our interests by diluting alongside founders over time. Everyone on the investment team has founded a startup, or massively scaled one. …
A few thoughts and questions to ask before you raise that big growth round
By Micah Rosenbloom, Managing Partner
We’re in the fortunate position of having several portfolio companies in the position to raise $30–50M+ growth rounds.
This is a great option to have! But it’s riskier than most founders assume, so here are a few bits of advice for those in a similar situation.
🍻 Resist peer pressure to raise
You’ll find *a lot* of encouragement to raise a big round if it is remotely possible — your investors want the mark, and your employees will love the paper wealth. Still, it’s the highest-risk path of least resistance you’ll ever walk down.
❓ Ask why you are raising
If you can predictably turn $1 in $2+ go for it, raise. …
And other lessons learned across 300+ retail stores and scaling the largest outdoor ecommerce business in Africa.
I grew up on Africa’s southern tip in Cape Town, as the 4th generation in an outdoor retail family business. My father taught us that to sell gear you needed to understand the customers’ needs. He always said, “start with the head, focus on the hands and end with the feet.” I learned that retail, much like every entrepreneurial venture, is mostly about the heart and an obsession with the customer.
After university, I spent time managing and launching Bath & Body Works and Victoria’s Secret brands in the US. I was then fortunate to work with Staples founder Tom Stemberg who embodied empathy for retail entrepreneurs and reminded me that “retail is in the detail” during my time at the Highland Consumer Fund. …
Both can become big businesses, but high-level decisions made in the earliest days of your startup will reverberate for decades.
By David Frankel, Managing Partner
Are you better off owning a gold mine or operating a toll road?
Both can be lucrative businesses.
Each has dramatic drawbacks.
Specific personalities are required to make either work.
A quick overview of the pros and cons for each model follow, but first a story:
I invested in a company that developed SaaS tools for the mining industry. Monthly contracts ranged into the six figures, but the mining companies were happy to pay since improved productivity could create hundreds of millions of dollars in value.
Despite hefty revenues and healthy margins, the startup’s founders viewed their slice of the pie as negligible compared to the mining co’s margins on the glittering bounty buried in the Earth. Everyone did well, but it helped me understand the lure of “Full-Stack Startups.” …
What Cameo’s $100M year teaches us about entrepreneurial timing
By Joseph Flaherty, Director of Content & Community
How many $100M+ startups are just waiting to be founded? Cameo, the celebrity selfie service, just announced a monster $100M+ GMV for 2020. It’s an impressive number, but it makes you wonder why now? Why not 2015? Or even in 1995? How early could Cameo have been started?
Pre-Internet?
Theoretically, this type of service could have existed before the internet, and indeed it did. The social primitive is fan conventions, where b-list celebs would take photos with fans for a fee. But coordination problems limited scale, and lack of internet vitiated virality.
A mail-order version of Cameo could have existed in the pre-internet era — pick a celeb from a catalog, Fill out a form, send a check, and 8–12 weeks later, you’d get a VHS tape. Acquisition and logistics would have hurt margins, but it was theoretically possible. …
And other lessons from Red Antler, the legendary startup branding firm
By Micah Rosenbloom, Managing Partner
We recently hosted a workshop where our portfolio founders had an opportunity to spend time refining their brands with JB Osborne and Marni Kane from legendary creative firm Red Antler.
Here are some of the insights we gleaned from the session:
👶 Showcase your flying baby!
“Branding is an exercise in prioritization” was the most common piece of feedback shared with our portfolio. The Red Antler team fashioned a great heuristic to aid in this process — “If your baby can fly, lead with that!”
The point is to focus on what you do better than anyone else. The one thing that your customers would *love* about your product. In short, a single differentiated message is better than half a dozen banal brand promises. …
If your market hasn’t been disrupted yet, it’s probably not because the natural competitors are stupid or lazy.
By Joseph Flaherty, Director of Content & Community
💻 We’re 40+ years into the PC revolution
🕸️ Web 2.0 is old enough to drive
📱 Smartphones are over a decade old
If a market is still inefficient, it’s probably *not* just because no one has thought to fix it with technology yet.
Before embarking on a journey that may consume years of your life, it’s a worthy exercise to ask *why* something hasn’t been done yet, or if several startups have tried, why it hasn’t worked to date?
“Chesterton’s Fence” is a principle that you shouldn’t start making changes to something until you understand the decision-making process that led to it. Practically, don’t remove a fence until you know why it was built in the first place. …
By David Frankel, Managing Partner
Imagine you are seated next to the CEO of your dream customer for dinner. Over the course of the evening, you’ll likely have 20 minutes to chat with this person about your startup. How do you make the most of this scenario (Or its socially-distanced simulation?)
A perk of raising from VCs is that investors often host dinners, office hours, and convene groups of high-level decision-makers. You’ll likely have opportunities to meet C-level execs in your industry earlier than the state of your business might dictate.
These are the closest thing you’ll find to cheat codes in the business world. An email from the CEO to a VP or director in her organization, endorsing your startup, however slightly, is a powerful door-opener. …
By David Frankel, Managing Partner
Working with a board of directors is one of the key challenges facing founders. While tech has an egalitarian mien, there are material power imbalances and they can cause tremendous stress for founders. Some thoughts on how to manage those concerns:
👏 Your investors want you to succeed
There’s a belief that VCs are keen to replace founders at the first misstep. Nothing could be further from the truth. The reality is that you are more likely to be replaced if your startup *succeeds* than if it struggles.
At the early stage, investors know that firing a CEO is likely to kill the company. Practically speaking, it’s also very hard to find talented outside CEOs who are keen to take over an unprofitable business with an uncertain future. …
By Joseph Flaherty, Director of Content & Community
Many founders seem to think VCs are purely rational beings who can be convinced to invest if the right logical arguments are made and the correct fact sets are assembled. The reality is that most VCs are more Epicurean than Aristotelian — especially at the early stage.
I have the honor of reviewing a lot of Series A decks and it’s shocking how often the actual product the company sells isn’t shown until halfway through the pitch. Strategy, team, sales, etc., are all important. However, remember that VCs are consumers too.
🚗 Would you buy a sports car based entirely on its 0–60 time? …
About
