Welcoming James Tamplin & Jack Groetzinger to Founder Collective
At Founder Collective, we hold some beliefs that could be called counter-cultural. Our funds are small — by choice. We don’t worry as much about pro-rata rights. While most funds are obsessed with ownership percentages, we believe one of the biggest adverse selections in VC is only investing in deals you can lead.
We also know that some of the best investors are busy running startups.
When Eric Paley and I started FC we knew we wanted to work with Chris Dixon, but at the time he was running a company called Hunch. Likewise, Caterina Fake and Zach Klein had excellent taste in startups, but insufficient time to invest on a day-to-day basis. We’ve long held the view that before any VC sees a hot company, the smartest aspirational founders seek counsel from the brightest startup minds in their ecosystem.
Over the years we have found that the intersection of successful company founders who truly want to spend time seed-investing too, is small. By original design, our Founder Partner program was born to allow these few entrepreneurs to stay focused on building their business while providing more structure to their investing.
As entrepreneurs ourselves, we know a startup founder’s schedule looks like a sine wave. At some moments, if you’ve done your job right and optimized your team, you can stand back and delegate. At other times your company will be gripped by an existential struggle. This unpredictable schedule isn’t a good fit for a full-time investor, but it’s a good fit for our program.
We’ve had the privilege to work with Chris, Caterina, and Zach in this capacity, as well as Bill Trenchard, Raj DeDatta, and Scott Belsky. Today, we’re proud to announce that Firebase co-founder/CEO James Tamplin and SeatGeek co-founder/CEO Jack Groetzinger will be joining Founder Collective as Founder Partners. On this happy occasion, I thought it would be worth explaining how we work with Founder Partners and how much they differ from what are usually termed “scout programs.”
The Profile of the Perfect Founder Partner
There is no one-size-fits-all description for successful investors. Some founders are remarkably intuitive. There are VC’s with genius level EQs who spend little time blogging, but have built up personal relationships that make them a nexus for talented people. Others are cerebral, deep thinkers who inspire through their force of intellect. Every investor has a different approach, but the best we’ve worked with have all shared these qualities:
Servant leadership is an overused term, but while many celebrate the Steve Jobs model of leading through fear, we think the best mark of a future investor is someone who inspires greatness through proximity.
Venture capitalists sell a commodity. Our money is as green as the next firms. However, access to a CEO that’s founded an industry changing company is a unique currency with no substitute. Successful founders are magnets for other entrepreneurs, and the best entrepreneurs use that leverage to their advantage.
We want to find partners who are insatiably curious. The kind of person who reads the plaque whenever they enter a new building. Those who will sit through nine tedious coffee meetings because they know the tenth might yield an insight that will change their perspective.
I’ve had the pleasure to work with amazing angel investors who are surprisingly inexperienced when it comes to deal terms. Typically they have deep domain experience (and success) in a specific industry, but their tech investing history is limited to filling out rounds where terms are already set. We find that founders who have been through a few rounds of funding (and taken some knocks) develop a feel for founder friendly and fair deals as well as red flags.
Moreover, these people are actively investing. They’re beyond dabbling. It’s easy to gamble other people’s money, but a willingness to invest personal capital is a trust mark. More importantly, it forces you to clarify your position as a VC. Every VC’s portfolio reflects their personality as clearly as a designer’s portfolio or an engineer’s Github commits. Instead of imagining how you’d fit in a firm and partnership, you can compare notes.
We Have Partners, Not Scouts
Scout programs have become a fixture of the VC landscape and net-net they’re good for the ecosystem. Founders get capital; firms get call options, and opinion leaders in the community get a feel for investing. But that’s not what we have wanted from our program. Our seed stage model precludes thinking of these investments as call options on bigger rounds down the road.
Our Founder Partners take on personal financial risk. We debate the deals they source as strenuously as any investment one of the general partners finds. Our expectation is that Founder Partners are as much thought partners as financial stewards. Nearly eight years later, making this program function well is still a work in progress, but an engaged, respectful debate is mandatory.
When it Works, It’s Win-Win-Win
The program is designed to provide value to the founder partners, Founder Collective, and most importantly, the next generation of entrepreneurs.
Our Founder Partners get access to a platform to help leverage their ambitions. Instead of cutting a $40K check, they can be part of a group investing at least $400K and have a team watching over the investments on a more regular basis. Past partners have used this program as a springboard to becoming successful full-time Partners at firms like First Round Capital, A16Z, and Benchmark.
And we get access to a talent pool that we couldn’t get any other way. We’re less concerned with “proprietary deal flow” and more interested in finding people who will challenge our ideas and our approach to investing. Our industry changes dramatically, and at a rapid pace, so it’s critical for us to constantly be exposed to new ways of thinking.
Most importantly, our Founder Partners provide entrepreneurs more access points to institutional capital, advice, and mentorship.
Back to Jack and James
I first heard the idea for SeatGeek from founders Jack and Russ in a nondescript Cuban restaurant. Now I see their logo & cheeky phrases on the New York City subway and listen to their ads on nearly every sports podcast I hear. I look forward to watching Jack turn that intellect towards other startups and add to his already promising reputation as a very early investor.
If you want to get a sense of what Jack is interested in, please follow him on Twitter (@jackgretz).
Firebase was founded serendipitously when James and his team realized the backend infrastructure that powered his chat app startup was more useful than the front end. While the discovery was lucky, his development of the product into a company, its acquisition, and subsequent expansion to become Google’s unified app platform, demonstrates his acumen as a technologist and operator. We’re thrilled to see how those experiences shape his investing patterns.
You can follow him on Twitter (@JamesTamplin).
James and Jack embody the best qualities that we seek for Founder Partners. We are honored and humbled to have them burnish the Founder Collective name with their personal brands. Welcome and thank you to both of you!
You can also reach out directly to us at firstname.lastname@example.org.