Craig Shapiro

Craig Shapiro

Founder of Collaborative Fund

THIS CHAT HAPPENED ON April 06, 2016

Discussion

Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
Hi, I'm Craig Shapiro, founder and managing partner of Collaborative Fund a venture fund committed to serving and investing in creative entrepreneurs pushing the world forward. In addition, we manage Collab+Sesame, a new investment vehicle with Sesame Street focused on investments to advance childhood development.
Emily Snowdon (née Hodgins)
Emily Snowdon (née Hodgins)@emilyjsnowdon · Operations @ Product Hunt
Hi Craig thanks for joining us today! What three things should every new founder constantly be thinking?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@ems_hodge Hi Emily! 🙃 1) How to align interest of their most valuable constituents (i.e. users, customers, investors, employees, etc) 2) How to recruit the best and brightest people to push things forward 3) Not run out of $$$
Geoffrey Weg
Geoffrey Weg@geoffreyweg · Betaworks, TechStars, White House
Hey Craig! One of my favorite things about Collaborative Fund is its rich history of launching unique funds and side projects (e.g. Collab+Sesame, Collab+Consumer, Alignment Holdings). What drives you and the team to pursue these opportunities?
Sar Haribhakti
Sar Haribhakti@sarthakgh · Learning
@geoffreyweg I was just typing this same exact question. You beat me to it. 👊🏻
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@geoffreyweg Wat up Geoffrey! Thanks for the kind words. I appreciate you taking notice and giving words of encouragement. I think our path is a reflection of our team. We have such a diverse set of interest and backgrounds -- that it leads to a unique path which deviates from other VC firms. One thing that we try to do -- is ask ourselves -- If we had a magic wand, what could we achieve? And through this lens, we allow our imagination to expand ... which provides lots of crazy, potentially world-changing ideas. While there are many ways to make $ in the medium term, there are much fewer ways to change culture through technology. This is what gets me up in the morning and excited to face the day.
Erik Torenberg
Erik Torenberg@eriktorenberg · Former Product Hunt
Hey Craig! What's something you used to fervently believe that you now see as fundamentally misguided?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@eriktorenberg Hmm... Probably Genetically Modified Foods. I used to be strongly against most GMO products. But as I learn more about it, my thinking has evolved.
Lesley Wu
Lesley Wu@deleted-407305
@cshapiro @eriktorenberg Why?some media said Genetically Modified foods will change human DNA...
Karyn Campbell
Karyn Campbell@kary · Designer at Etsy
Hi Craig! How has past/present culture and media influenced how you think about investing in brands and products? Where do you get inspiration to envision what will succeed in the future?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@kary Hello Kary! 😍 Culture and media have played a huge role and influence in my life - including investing. One in particular is graffiti art! Growing up in/around Washington DC in the 90's with a graffiti renaissance, I learned so much about design, risk taking, loyalty, hard work, consistency, and much more! I still draw on a lot of those experiences when contemplating new investments. Also -- you inspire me! 😘
Karyn Campbell
Karyn Campbell@kary · Designer at Etsy
Austin Teague
Austin Teague@austin_teague · Full-Stack Marketer and Entrepreneur
@cshapiro As an investor how do you find startups to invest in? Specifically is it through referrals, cold emails, specific searches/sites? Second, what is the biggest frustration leading up to investing in a startup?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@austin_teague Hi Austin! Thanks for the question. You are the very 1st one! :) I usually find startups through two primary sources: 1) people I know who send a referral; or 2) Finding something through my daily routine and falling in love it -- such that I reach out to them proactively. In terms of my biggest frustration leading up to an investment, I'm having a hard time pin-pointing one thing in particular. Each investment is unique -- each with their own set of challenges and frustrations. But overall i love the process and hope to be doing a lot more of them!
beltran
beltran@lyricalpolymath · co-founder eyevel.com + berrocal.net
a prominent entrepreneur-investor, whom I'm not going to name, once told me that VCs and investors are usually: "infinitely greedy and 0% empathetic". What do you think about that and where would you position all other VCs and yourself on that spectrum (if there actually is one)?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@lyricalpolymath Yo Beltran! It sounds like your friend had a bad experience or possibly several bad experiences with VCs. From my perspective, I think Venture Capitalists are similar to lots of other professions .. there are lots of good people and unfortunately lots of bad ones. That is human nature and the good news is -- tools like Product Hunt, Quora, twitter, and others are providing transparency and accountability. It helps entrepreneurs share experiences and interact directly before partnering with an investor. In terms of the Collaborative Fund team -- we are trying to be fair and reasonable. As an entrepreneur myself, I am personally empathetic towards the struggles of starting and trying to grow a business. But we make mistakes and hopefully learn from them.
beltran
beltran@lyricalpolymath · co-founder eyevel.com + berrocal.net
What's the story behind Collaborative Fund's investment thesis? how and when did you come up with it? was there an eureka moment or slow transformative process? How it has changed over time and where do you see it evolving?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@lyricalpolymath Collaborative Fund's investment thesis derived from a confluence of experiences in my life -- namely: hustling to build a startup in the mobile technology space (called Proteus) + working at GOOD Magazine + investing in a documentary film about Wikipedia. The initial thinking was focused on: Tech+Social Good+Collaboration It has evolved significantly -- particularly around certain areas of focus (ie. Kids, Consumer products, etc). But at our core, we are still very much focused on investing in startup businesses that live at the intersection of for-profit x for-good.
beltran
beltran@lyricalpolymath · co-founder eyevel.com + berrocal.net
What's the question entrepreneurs never ask (you) and you think they really should? ;-) And what's the answer to that question? (ps thanks for taking your time to answer these questions :) )
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@lyricalpolymath I think asking about how I define success. It might be implied or obvious -- given I am a VC that I want a big return on my investment. But let's get into the nitty-gritty. What constitutes a "big" return? And are there other outcomes I hope for in addition to a financial return? I like to think every human being has an itch (and most have many itches). If you can figure out a way to scratch someones itch (or at least acknowledge that you know what it is and hope to scratch it), then you will have a much higher likelihood of them scratching yours. Put more simply, if you can answer the two questions below before all of your meetings, then the outcomes will likely improve dramatically. 1) What is this person’s itch? 2) If I can adequately scratch it, what do I want in return? (said differently, how can I align our interests to achieve a mutually desired outcome?)
Jonny Miller
Jonny Miller@jonnym1ller · Cofounder @Maptia
Hey @cshapiro – thanks for doing this! The investment thesis behind Alignment Holdings is inspiring, as is this: “The first question we ask ourselves when evaluating a new investment opportunity is: If this company becomes successful, will it make the world a better or more interesting place?” the startups in your portfolio definitely hit those criteria! My question is: What’s the most interesting question or problem that you’re still waiting for an entrepreneur or startup to solve?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@jonnym1ller Hi Jonny, thanks for the kind words -- and I LOVE your question. The most interesting question/problem I am eagerly hoping someone can help with is: Alternative liquidity paths for mission-driven businesses. It feels like our current options (primarily) IPO or Acquisition are both sub-optimal for lots of companies we work with at Collaborative Fund.
Jonny Miller
Jonny Miller@jonnym1ller · Cofounder @Maptia
@cshapiro thanks, I LOVE the answer. I know many founders avoid going down the VC path because they're building an impactful company that they wouldn't want to sell, which doesn't appeal so much to investors! Other founders we heard stories from (Zach Klein comes to mind) regretted selling their startups... are there any alternative ideas or frameworks out there currently which don't involve IPOs or acquisitions?
Corey Hubbard
Corey Hubbard@corey_hubbard · Founder - DreamHighr
Craig, What are you thought on seed stage HR Tech startups?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@corey_hubbard Hi Corey. HR Tech isn't something that I know much about. It is certainly a big opportunity, but not one Collaborative Fund is focused on at the moment.
Emily Snowdon (née Hodgins)
Emily Snowdon (née Hodgins)@emilyjsnowdon · Operations @ Product Hunt
Can you tell us a bit more about the Sesame partnership? How will this work and what type of startups, products, will it be investing in?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@ems_hodge Hi Emily! How it works ... Simple ... If you or anyone you know are building a product that is going to help kids grow smarter, stronger, and kinder, we want to see it! Sesame Workshop has built one of the most trusted and iconic brands in the world. In addition to providing investment capital, our goal is to provide support in marketing, distribution, research, design, and other vital areas of development. While our desire is to invest at the early stages of your development, we are open to any/all sizes. I hope this is helpful! 👌
RosalindmaJohnson
RosalindmaJohnson@rmajohnson · Guardian of Wishes, Timbalaya
Hi there... how do we connect with real people at Collaborative Fund or Sesame?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@rmajohnson Hello! The best way to connect is through mutual connections. And if there are no mutual connections, social media is a great tool to start the process.
beltran
beltran@lyricalpolymath · co-founder eyevel.com + berrocal.net
How do you go from Media to VC and how were your first conversations with LPs? :)
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@lyricalpolymath I think anyone can be a great venture capitalist. In fact, having a diverse set of interests and experiences is a key advantage. Initial discussions with LPs (Investors) were challenging -- but much like a startup, you only need a few people to believe in "you" and who are willing to make a bet. Then it is up to you to execute and make sh*t happen!
beltran
beltran@lyricalpolymath · co-founder eyevel.com + berrocal.net
What investment to date best represents Collaborative Fund's investment thesis and why?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@lyricalpolymath I think Hampton Creek is a fun one to highlight -- primarily because they are aggressively trying to solve something we call "the villain test" The Villain Test = Would a ‘villain’ invest in this company if their motive was one of pure self­-interest? For Hampton Creek -- they aren't just trying to make food that is healthier and more sustainable (two things we care deeply about) ... they want it to be cheaper. This is critical because the person who doesn't care about 'doing the right thing' ... and is optimizing purely out of self interest (lowest-cost) would ultimately choose the option that is better for the world. When you make the choice better for you (self interest) and better for the world (broader interest), magic happens! (p.s. Ben Goldhirsh- friend and founder of GOOD magazine first mentioned the villain test to me)
Ben Tossell
Ben Tossell@bentossell · Makerpad.co
Hey! What is your personal investment thesis?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
The short version is: Invest in great people who are trying to push the world forward.
Ben Tossell
Ben Tossell@bentossell · Makerpad.co
What are your favourite questions to ask founders?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@bentossell 1) What motivated you to start your business? 2) What things keep you up at night (concerns)? 3) What are you excited about when you wake up in the morning? == 4) Where are you from? 5) How did you get here?
Laz Alberto
Laz Alberto@lazalberto · @ScienceInc
If you could have 30 of the World’s greatest minds with unlimited resources work on a problem for 30 years, what would you have them work on, and why?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@lazalberto Easy: A cure for cancer. Because F*ck cancer.
Laz Alberto
Laz Alberto@lazalberto · @ScienceInc
@cshapiro couldn't agree more. Thanks for the answer!
sylviamatiko
sylviamatiko@sylviamatiko
@cshapiro @lazalberto Well said! Right with ya on that one!
Kunal Tandon
Kunal Tandon@kunaltandon · kunaltandon.com
In hindsight, it feels like Collaborative Fund was one of, if not the earliest to form an investment thesis steeped in the belief that users/consumers were putting an increased importance on values when deciding on how to spend their time and money- what made you see this shift so early, what has surprised you the most since starting the fund?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@kunaltandon Hey Kunal! Thanks for the support! Working at GOOD magazine gave me a front row seat into the macro shifts occurring in consumer behavior (towards alignment in values, shift from hyper-consumption to collaborative consumption, and use of technology as a force for good). What has surprised me is the pace! Having been a supporter of Kickstarter, Lyft, and others from very early on, I am surprised by how quickly some of these businesses have matured and how mainstream they've become on a global basis.
Laz Alberto
Laz Alberto@lazalberto · @ScienceInc
When dealing with businesses with the KPI of pushing the world forward, are your feedback loops longer, and does that affect how you evaluate progress?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@lazalberto Yes. In most cases, creating large scale change takes time. For example, we try and evaluate our progress against the benchmark of building a long term sustainable firm that will hopefully thrive well beyond any of the current teams involvement -- including myself. For example, our brand/name was intentional. We didn't use anyone's name. (e.g. Kleiner Perkins, etc, etc.) We didn't choose a hot new term or investment trend. (e.g. Sass fund) We based it on a core set of beliefs that values that we believe will act as a foundation for +50 years.
Laz Alberto
Laz Alberto@lazalberto · @ScienceInc
@cshapiro Interesting. Love those insights on the brand/name; very cool. Thanks!!
Kunal Tandon
Kunal Tandon@kunaltandon · kunaltandon.com
Reinventing urban spaces or cities as a platform has become an area of interest for technology companies, what do you think is the best approach for startups to work with cities to implement real changes? What do you look for in companies that are building companies to operate in the cities of the future?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@kunaltandon Kunal, you've struck a nerve! We actually have a lot of thoughts about this ... and plan to share details in the not too distant future. 👍
Kunal Tandon
Kunal Tandon@kunaltandon · kunaltandon.com
@cshapiro haha excellent, I'm looking forward to it. I think we have a lot of overlapping interests, keep an eye out for an email from me soon!
Andrew Flynn
Andrew Flynn@andrewpflynn · Growth, Staance
Hi Craig, Collab+Sesame sounds awesome. With most of the Collaborative funds investment being digital, will Collab+Sesame mirror this? It seems like some of the best Childhood Development tactics....especially for health involve getting kids away from digital and into the garden, or sports, wilderness, ect. How will you guys balance your experience with digital with what is a quite analog development process?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@andrewpflynn Hi Andrew. This is an important question. We agree that it is a balance -- there are certain opportunities for digital/tech to be transformative in helping children to learn, share, and grow. But we also recognize the need to put the devices down and get dirty. As it relates to our investments from Collab+Sesame, I expect it will reflect this desired balance. We intentionally broke it out from Collaborative Fund proper -- to give it the focus, attention, and flexibility to drive the desired outcome.
Kunal Tandon
Kunal Tandon@kunaltandon · kunaltandon.com
By nature a VC firm doesn't see returns often for many years, so how does Collaborative measure success on a more short term basis- what metrics do you look at to evaluate how good of a job you're doing as a firm, quarter to quarter, year to year?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@kunaltandon 1) Are we having fun as a team? 2) Are we adding tangible value to our portfolio companies? 3) Are we challenging ourselves to improve (decision-making, process, etc)? 4) Are we communicating clearly and effectively to our community?
Joe Laresca
Joe Laresca@joe_laresca
Hey Craig! — is collab fund expanding their team/looking for any young, scrappy entrepreneurs to join their team 😁 ?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@joe_laresca Hi Joe! We do not have any specific job openings at Collaborative Fund. That said, we always like to meet scrappy entrepreneurs. Any ideas? 😃
Joe Laresca
Joe Laresca@joe_laresca
@cshapiro o0o0o I have plenty ;) What email can I reach you at?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
sylviamatiko
sylviamatiko@sylviamatiko
As an investor, how do you approach a company's valuation in a start up phase (pre-revenue) and potential equity position. Any tips?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@sylviamatiko It is an art more than a science - especially at the early stages of a business. We try to work with the founder/s to determine a valuation that they feel is fair and reasonable. Ultimately the market dictates the terms as things are worth what others are willing to pay for them. So while I wish I had tips on how to engineer the best valuation -- ultimately (most times) it is out of our hands. One thing to keep in mind: When negotiating valuation and other key terms ... it is short-sighted for either party to be greedy because in a lot of cases the other party may have leverage at a later point ... so it is in everyone's interest to try and be fair from the get go.
sylviamatiko
sylviamatiko@sylviamatiko
@cshapiro Thank you for your insights. Very much appreciated. It's hard to find investors that can balance the "for good" with the "for profit" so thanks for being that kind of company.
Marina Muyun Du
Marina Muyun Du@canreachit · Business Designer at BitsXBites
Hi Craig, thanks for answering the questions. A question that has been bothering me is do you think there is bubble in current startup world? When the society is filled with so many urgent fundamental social issues to tackle. We see top talents and lots of money going into solve tiny problem or just inconvenience in first world modern life. Do you see social good becoming a mainstream focus in the startup industry in the near future? How to diverge the rich resource in startup space in tackling social issue?
Craig Shapiro
Craig Shapiro@cshapiro · founder, collaborative fund
@canreachit Hi Marina! I also wish we could recruit more talented people to work on pressing needs. And while I do see this as a trend -- I am impatient and want it to happen quicker! The best way to accomplish this (I think) is to celebrate the founders and businesses who are driving the most impact. In some ways, I think Elon Musk is a great example! The impact of Tesla, SolarCity, and SpaceX is ultimately going to give birth to many new entrepreneurs tackling massive challenges.
JSiwady
JSiwady@judehs · Founder, Spacefy
Hi Craig, What daily apps/tools you use for: - productivity - reading news/blogs - communication and fun
Jordan King
Jordan King@jordan501king · Managing Editor, Inuvo Inc.
Hello Craig, I love what you guys are doing at the Collaborative Fund. What's the most memorable pitch you've heard and what made it stand out? What's one negative aspect of a pitch that immediately makes you have doubts?
Salim
Salim@organicthirty · Digital Strategist
Hi Craig, Collaborative Fund has always been a leader in the shared economy. Some people have argued that we are at a place where the shared economy has plateaued. What is your opinion and are there any new startups in that space that are innovating/ killing it.