Today, we’re proud to announce the close of our third fund with $75M in aggregate capital commitments. This new fund, is the same aggregate size as Founder Collective II* and will allow us to continue our mission to build the most aligned fund for founders at the seed stage. Sticking to your knitting can sometimes seem boring, but we continue the same ethos we’ve practiced from day one — make founder alignment our highest priority, stay small, and love the weird and wonderful.
Founder Collective is predicated on the idea that “peer-to-peer investment” has huge benefits for entrepreneurs. Everyone at Founder Collective has started a company. We’ve been through the good: the fundraising, the product launches, the team building; and the bad: the layoffs, the stress, and the loneliness. We’re here to be partners, friends, and sounding boards — as well as provide capital.
We are not a life cycle investor. We invest between $200K and $2M at the seed stage and typically write a single support check in the Series A. These investments aren’t options on future funding rounds. We don’t buy options, so that our founders can have more of them. By diluting alongside our founders, they know that we have the same interests as them when making future financing decisions.
We’re proud of how things have unfolded since we started Founder Collective in the midst of the Great Recession of 2009. Our first two funds have outperformed our high expectations thanks to an amazing group of portfolio companies.
Our investors were eager to put more capital to work and encouraged us to raise a larger fund, but we purposefully chose to keep Founder Collective III the same size as Founder Collective II because we aspire to practice efficient entrepreneurship. We don’t believe we can maintain our alignment with founders and manage a larger fund with greater pressure to deploy capital.
More capital doesn’t make entrepreneurs any more clever, too much money can hurt a business as our recent study of 71 recent tech IPOs shows, and we believe the same goes for seed investors. More ramen and less steak for us too.
Founder Collective remains proudly anti-thematic. We are stage-focused, and sector agnostic. Historically, this has led us to invest in a broad range of industries from ad tech to autonomous vehicles. Instant coffee and consignment sales. Pill delivery as well as plus-size fashion. Ridesharing and real-time web development. Concert tickets and code schools. We look for exceptional founders who inspire us and articulate compelling use cases. The weird use cases of today become the hot themes of tomorrow.
A classic complaint of investors in venture funds comes from VCs acting more as agents than as principals. In most venture funds the VCs themselves represent a tiny amount of the capital in the fund and are at risk of acting like money managers. We are principals. We, the Partners, are the biggest investors in Founder Collective III, and as such are structurally positioned to behave differently from the typical VC. That’s it. To the best of our knowledge, this is unique in the venture industry.
As we’ve done since the start of FC in 2009, the full-time investment team is proudly joined by a collection of Founder Partners. SeatGeek’s Jack Groetzinger, Firebase’s James Tamplin, Bloomreach’s Raj De Datta, Caterina Fake of Flickr and Hunch, and Zach Klein of DIY and Vimeo provide an invaluable perspective and keep our team grounded in what it takes to build a great company as they practice their craft as founders every day.
If you’re working on something that will change the world, in ways large or small, please reach out to us at Contact@FounderCollective.com and follow us on Twitter at @fcollective.
|* For clarity and legal consistency, each fund has ~$75M in aggregate capital commitments and is comprised of a main fund and a parallel fund.