We recently shared our thinking on fund investing with our post, “What does a Foundry Group Next fund investment look like?” We noted that we are largely driven by people and ecosystem. We want to continue laying out our thinking by talking about each of our fund investments. We’ll start with our most recent fund investment, Founder Collective, and walk backwards to catch up on what was a very active first year of investing for Foundry Group Next.
Our recent investment in Founder Collective III, L.P. is a good example of our ecosystem thesis at work. We previously worked with the Founder Collective (“FC”) partners, David Frankel, Eric Paley, and Micah Rosenbloom through shared company and fund investments. We co-invested with them in MakerBot, Pantheon, and Formlabs, with many other shared opportunities along the way. It was easy for us to get excited about FC’s prior portfolio and fund performance. They have a number of high-profile company investments and, importantly, they are one of the few seed funds to have shipped home large boxes of cash in addition to strong valuation mark-ups in their portfolio. We also got excited about their fund discipline and investor alignment, choosing to stay the same size and take more of the fund themselves. I have to think that most LPs are ready to invest at that point!
It’s FC’s partnership dynamics, however, that get us really excited. They have strong internal dynamics that limit the noise and encourage debate to reach thoughtful decisions. Their history together as founders and investors makes it clear that they deeply care about each other. It is those deep bonds and relationships that allow for the space needed to make good decisions across the portfolio. Brad’s post, Kindred Spirits – Our Investment In Founder Collective, does a nice job of laying out our shared values and goes into detail as to why we felt such a strong motivation to partner with them. These are clearly our kind of people.
The FC strategy also shows that they deeply align themselves with, and identify internally, as founders. The personal feedback we got from their portfolio founders was strong and their local ecosystem players noted support for their involvement as preferred investors.
We also knew FC had a great investor base and we would be lucky to get a chance to join that group in this new fund. It was only because of shared relationships (and some embarrassing cajoling) that we were able to become the only new LP in their new fund. We are excited to formally partner with the FC team and look forward to finding more great entrepreneurs to back alongside them.