Founder Collective V
When we started Founder Collective in 2009, we aimed to create the kind of venture capital firm we had wished existed when we were founders. A seed fund built by founders for founders. Today, we’re proud to announce a new Fund* to continue our mission to build the most aligned fund for founders at the seed stage. “Founder alignment” isn’t just marketing copy; it drives every decision we make.
Small by design
Among its 350+ investments since 2009, Founder Collective has been fortunate to invest in two dozen startups that have earned $1B+ valuations. A partner from FC has been among the top dozen people on the Midas List for five of the last six years. Despite this success, we’ve intentionally kept the fund small — $95M. Fund size drives fund strategy, and smaller funds benefit founders in three ways:
1) We specialize in seed-stage investing: We have a singular focus on startups at the earliest stage and have avoided the distraction of multiple funds and teams. Our strategy isn’t to invest now so we can buy a free option on the next round. We simply don’t believe that “scale” is an asset for seed-stage founders.
2) Founders only have to pitch us once: Since we don’t invest in later rounds, entrepreneurs never have to “sell” us during their next fundraise. We dilute alongside the founders and can be honest advisors as founders weigh decisions about how to build their startups. From the day we first invest, we sit on the same side of the table.
3) We’re focused on all of our founders, not just the outliers: For an exit to be material to a fund, the sale price generally needs to be equal to the fund’s size. Billion-dollar funds need billion-dollar exits, and that incentive leads them to push founders to “go big or go home.” In reality, most startups are acquired for far less, and this misalignment comes at a profound cost to entrepreneurs. Of course, we all love huge outliers, but small exits can be life-changing for founders and impactful for small funds.
Skin in the game
Founder Collective’s partners are the largest LP in this Fund, as has been the case previously. The temptation for VCs is to grow their “Assets Under Management,” or AUM, as rapidly as possible. More AUM means higher salaries, larger teams, and nicer offices. This arrangement benefits the fund manager, but we believe it does a disservice to the founders. It is our belief that small funds with a founder-centric approach are more likely to deliver outsize returns, and we want to invest in that kind of opportunity.
Core beliefs drive our decisions
Founder Collective is stage-focused, sector-agnostic, and driven by a handful of core beliefs. If you want to understand how we think and the kinds of startups we can best support, this list is a great place to start.
🧭 Founder alignment: Structural alignment between founders and funders drives every decision at FC.
🔮 Anti-thematic: Our portfolio includes AI for aircraft, high-end baby toys, performance trackers for elite athletes, and SaaS tools for solar energy production. Founders frequently lead us to weird and wonderful markets, and we follow their insights and enthusiasm.
🪙 Capital efficiency: Capital has no insights. Money solves very few problems faced by startups and, instead, usually multiplies what is working or what isn’t. We practice capital efficiency in our fund operations, and we preach it loudly to any entrepreneur who will listen.
🗳️ Early conviction: The only true value-add in seed-stage venture capital is conviction early. We move fast, lead rounds, and make decisions independently.
🕸️ Network = Net worth: Every founder we back works directly with a partner and has access to hundreds of fellow founders through the Founder Collective network.
🏦 Intrinsic value: Vanity metrics can be flattering, but we believe that the best venture returns flow to the startups that prioritize driving real value for end users from day one to huge scale.
In addition to the new Fund, we’re proud to announce that Amanda Herson has been promoted to General Partner, and our CFO Joe DeFilippi has been promoted to Partner.
If you’re a founder and want a partner who is structurally aligned at the start of your startup journey, please reach out at firstname.lastname@example.org.
*References to Fund are the combination of Founder Collective V, L.P. and Founder Collective Partners V, L.P.
This press release is not an offer to sell securities nor should it be deemed to imply an offer of securities. Past performance is not necessarily indicative of future results, and there can be no assurance that the Fund will achieve comparable results or that the Fund will be able to implement its investment strategy or achieve its investment objectives. The investments included in this press release represent a subset of Founder Collective’s prior investments and may not be representative of the firm’s experience or performance as a whole. Please note that certain statements provided herein may be deemed forward-looking statements and such statements involve risks and any such statements are not guarantees of any future performance. Certain information has been obtained from third party sources and has not been independently verified.
Although certain individuals may be identified in this press release as “Partners” or “General Partners,” such titles reflect business usage that is customary within the venture capital and private equity industry and are not intended to indicate that any such individual is actually a partner or general partner of any partnership as those terms are used for legal purposes.