Craig Shapiro

Founder of Collaborative Fund

THIS CHAT HAPPENED ON April 06, 2016

Discussion

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 Hodgins@ems_hodge · Community and Marketing, Product Hunt
Hi Craig thanks for joining us today! What three things should every new founder constantly be thinking?
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@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@sarthakgh · Learning
@geoffreyweg I was just typing this same exact question. You beat me to it. 👊🏻
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@eriktorenberg · Former Product Hunt
Hey Craig! What's something you used to fervently believe that you now see as fundamentally misguided?
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@deleted-407305
@cshapiro @eriktorenberg Why?some media said Genetically Modified foods will change human DNA...
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@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@kary · Designer at Etsy
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@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@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@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@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@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@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@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@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@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@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 · Founder - DreamHighr
Craig, What are you thought on seed stage HR Tech startups?
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 Hodgins@ems_hodge · Community and Marketing, 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@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@rmajohnson · Guardian of Wishes, Timbalaya
Hi there... how do we connect with real people at Collaborative Fund or Sesame?
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@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@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@lyricalpolymath · co-founder eyevel.com + berrocal.net
What investment to date best represents Collaborative Fund's investment thesis and why?
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@bentossell · newCo
Hey! What is your personal investment thesis?
Craig Shapiro@cshapiro · founder, collaborative fund
The short version is: Invest in great people who are trying to push the world forward.
Ben Tossell@bentossell · newCo
What are your favourite questions to ask founders?
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@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@cshapiro · founder, collaborative fund
@lazalberto Easy: A cure for cancer. Because F*ck cancer.
Laz Alberto@lazalberto · @ScienceInc
@cshapiro couldn't agree more. Thanks for the answer!
sylviamatiko@sylviamatiko
@cshapiro @lazalberto Well said! Right with ya on that one!
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@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@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@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@lazalberto · @ScienceInc
@cshapiro Interesting. Love those insights on the brand/name; very cool. Thanks!!