Kicking Off Collaborative Fund IV - What We’re Looking For
We recently announced our new $100M early stage fund that we closed in May, along with a series of new additions to the team in June. Now that July is upon us, we’ve started to make investments out of the new fund and thought it would be good to share how we’re evolving the businesses we want to invest in.
My partner Craig started Collaborative with the focus on investing along two themes, which have always meshed with both my personal interests and with the types of businesses that I have spent the last five years looking for at my last firm:
What we call the shared future, a collaborative economy where its participants are both suppliers of resources and consumers of resources. First inspired by the emergence of Wikipedia, the fund led the way on this movement with investments in companies like Lyft, Quora, Reddit, TaskRabbit, Kickstarter and Tala.
Backing companies that align their mission and revenue models to achieve greater financial returns. Good examples of these would be our investments in Simple, LTSE and Dandelion. Put simply, these are consumer businesses that are better for you and better for the world.
These two movements are alive and well today. The collaborative economy is creating new market opportunities. With its last funding round, Airbnb surpassed Marriott / Starwood in market capitalization, and Uber + Lyft gave 65% more rides than yellow taxis in New York last year. Our march toward the shared future is moving forward: consumers are increasingly choosing to pay a premium for brands that have a sustainability component, and even firms like Blackrock are calling for purpose driven corporate governance. And this is just the beginning.
What does a Collaborative Fund investment look like today?
At a high level, we are looking to invest in businesses that fit into three themes:
Marketplaces and software that enable trust, transparency and accountability (a few examples include our investments in Flip, Yup, Spruce and Science Exchange).
Values aligned consumer brands that can define a generation (see: Blue Bottle Coffee, Daily Harvest, Beyond Meat, Farmers Dog, Sweetgreen, Allbirds, Casper, and Dia & Co).
New protocols that empower a fundamental shift toward a decentralized future (like Radar Relay, Bitwise, Algorand and Zeppelin Solutions). Since its founding, we have invested in technology that disintermediates extractive, legacy industries to remove friction and empower consumers and small business. We believe the blockchain and cryptocurrencies represent a new frontier along this established thesis.
Although these are all areas that are aligned with Craig’s first blog post eight years ago, this new framework will help us shine a light on those businesses that align most with our vision for the future.
We also view investments as partnerships. We want to back entrepreneurs we would work for, and hope they feel the same way about us. Making a good investment is more than writing a check; it’s backing a founder who sees the world through a similar lens as the investors, which helps both parties navigate the inevitable ups and downs, hand in hand. If you are a founder who shares our outlook on where the world is going and is building something that fits into these themes, we would love to hear from you!