May 2022
Case
HBS Case Collection

Founder Collective

By: Jo Tango and Alys Ferragamo

Format:Print
| Language:English
| Pages:20

Abstract

FC launched in 2009 with a clear mission: to be the most aligned fund for founders at the seed stage. In keeping with its mission, FC maintained smaller fund sizes and was not a lifecycle investor. By November of 2021, however, the seed market had gotten more competitive, and FC had successfully picked several Unicorn and even Decacorn investments, causing some LPs to wonder about the opportunity costs of FC’s “no pro rata” view. The FC Managing Partners David Frankel, Eric Paley, and Micah Rosenbloom wondered if the “game on the field” had changed too much and if they should evolve their strategy. They contemplated three potential paths forward: start investing their pro rata in later rounds, raise an opportunity fund, or continue their current strategy.