This is about investor Craig Shapiro, who looks for companies that are 'better for you and better for the world'—like Tesla, which is both cool and eco-friendly. He thinks these will make the most money. He's bullish on small consumer brands replacing big ones, like Ripple Foods (plant milk that uses less water but tastes good) and Dollar Shave Club (bought by Unilever for $1B). He also regrets missing Uber's seed round.
This report explores the venture capital philosophy of Craig Shapiro, founder and CEO of Collaborative Fund. The core thesis is investing in companies that are "better for the individual and better for the world," such as Lyft, Kickstarter, and Reddit. Shapiro emphasizes the importance of investment
Craig Shapiro is the founder and CEO of Collaborative Fund, which has made early-stage investments in companies such as Lyft, Kickstarter, and Reddit. This episode explores his unique venture capital philosophy: seeking investment opportunities at the intersection of "better for you" and "better for the world." Shapiro's core thesis is that startups capable of simultaneously serving individual self-interest and societal benefit will generate the greatest financial returns over the next decade.
Craig Shapiro argues that the traditional dichotomy between "doing good" (nonprofit) and "making money" (for-profit) is breaking down, and the most successful companies are precisely those born at the intersection of the two.
Shapiro points out that the world was once clearly divided into two ends: one end comprised purely nonprofit organizations like the Red Cross, and the other end consisted of companies purely pursuing shareholder returns, like Coca-Cola. But culture has shifted to the space between them—Kiva (a micro-lending platform) operates like a for-profit enterprise, while Starbucks also talks about community responsibility. However, "our financial markets have not yet kept pace with cultural changes, still using outdated systems and metrics to measure and reward the old system."
He believes this misalignment creates opportunities: "Companies that get the balance right will be the ones generating the greatest financial returns over the next decade and beyond." This is not just about financial returns, but about "stakeholder returns" rather than mere "shareholder returns."
Key Framework—The "Villain Test": This is a concept Shapiro learned from Ben Goldhirsch, founder of Good Magazine. The core idea is: a product must simultaneously satisfy "selfish desires" and "altruistic aspirations." If a product only emphasizes "being good for the world" but makes people "never want to wear it," it will not succeed; if it only pursues "cool, sexy" but completely ignores social impact, it will also fail.
Case Comparison:
Shapiro concludes: "The market willing to sacrifice personal interests to do the right thing exists, but it is very small. The market willing to do the right thing without sacrificing personal interests—that market is huge and still growing."
Shapiro emphasizes that Collaborative Fund's differentiating advantage lies in its limited partners (LPs) themselves being a major source of deal flow.
The fund selects LPs with entrepreneurial backgrounds — including OpenTable founder Chuck Templeton, Meetup founder Scott Heiferman, and YouTube founder Chad Hurley. These successful entrepreneurs are exposed to a large number of early-stage projects but lack the time to evaluate them individually, making Collaborative Fund their "outsourced" channel.
The second source is the fund's own portfolio — the 50+ companies it has invested in continuously "spawn" new ventures (co-founders leaving to start their own companies, VPs of Engineering launching startups, etc.), forming a "self-renewing and ever-expanding talent pool."
Shapiro believes that the founder's "origin story" is more important than market size — startups born from genuine pain points are more likely to succeed than those derived from McKinsey reports.
He shared a "negative filter": if a founder's idea comes from reading a McKinsey research report and discovering a growing market ("the on-demand economy is $7 billion today and will explode to $24 billion"), then trying to "grab a piece of the pie" — such projects are typically rejected. Because "starting a business is hard, and in tough times, those who enter out of opportunism are the first to give up."
Conversely, he looks for founders who start a business due to personal pain points: "I have an allergy, or a family member has an allergy. I've looked at all the options on the market, and none are good, so I decided to make this my mission."
Specific application of the villain test: Shapiro uses Ripple Foods (pea protein milk) as an example — it is "better for the world" (uses far less water than cow's milk and almond milk, with higher nutrition), but "if it doesn't taste good, nothing else matters." It passed the villain test because "it tastes better."
Shapiro admits that his biggest miss was passing on Uber's seed round.
David Shen, an early Yahoo employee and angel investor, showed him Uber's seed round. Ironically, Shapiro himself had written a car-sharing business plan a few years earlier. But because "the round closed quickly, and I hadn't met the founder," he declined. He later became an early investor in Lyft.
Shapiro believes the consumer packaged goods (CPG) sector is undergoing a major shift from "large-scale industrial production" to "small independent artisanal brands," a market several orders of magnitude larger than the tech market.
He points out that every CPG category—from fashion and hygiene to food and beverages—is experiencing transformation. Large monopolies are struggling to grow and are instead driving growth through investments and acquisitions. Examples include:
Collaborative Fund's CPG investment portfolio includes: Ripple Foods, Good Eggs, Simply Gum, Hampton Creek Foods, Sweet Green (salad chain), Blue Bottle Coffee, among others.
Shapiro argues that these emerging brands, leveraging existing technologies to "scratch the itch of younger consumers," are capturing market share, while large companies "may be a bit scared and have become very curious"—creating a favorable exit environment for early investors.
Shapiro’s core advice is: dive deep into a field and excel at it before it becomes mainstream.
"Most of the very successful people I’ve met, studied, or read about share a common trait: they pursued and became good at something before it became mainstream." He advises entrepreneurs to look for areas that "energize you but aren’t yet popular"—"Once McKinsey writes a report, your opportunity set actually shrinks."
He uses a vivid analogy: "The person who plays the trombone just loves the trombone and has studied its history in depth—even though the trombone isn’t a cool instrument and everyone else is playing the jazz saxophone. Then the world changes, and the trombone suddenly becomes the mainstream trend. And you’ve already been practicing for ten years, because it was your passion."
| Position | Guest Stance | Key Data |
|---|---|---|
| Lyft | Bullish (Invested) | Early-stage investor |
| Kickstarter | Bullish (Invested) | Invested around 2010; over $2 billion raised on the platform |
| Ripple Foods | Bullish (Invested) | Pea protein milk; water usage far lower than dairy and almond milk |
| Uber | Missed (Not invested) | Seed round was declined |
| Tesla | Positive reference (Not an investment) | Cited as a case that passed the "anti-hero test" |
| Dollar Shave Club | Positive reference (Not an investment) | Acquired by Unilever for $1 billion |
| Sweet Green | Invested | Salad chain |
| Blue Bottle Coffee | Invested | Specialty coffee brand |
| Good Eggs | Invested | Food delivery |
| Simply Gum | Invested | Natural chewing gum |
| Hampton Creek Foods | Invested | Plant-based foods |
1. The "Villain Test" is the core tool for evaluating the balance between "better for the individual vs. better for the world" (Craig Shapiro): A product must satisfy both selfish desires and altruistic wishes; products that only emphasize "good for the world" but are unappealing to use are doomed to fail, and products that only pursue "coolness" while ignoring social impact are equally untenable. Tesla is a perfect case — combining the sexiness of a Ferrari with the environmental friendliness of an electric vehicle.
2. The founder's motivation matters more than market size (Craig Shapiro): Startups born from genuine personal pain points ("I have allergies, and there are no good options on the market") are more likely to succeed than opportunistic ventures driven by a McKinsey report ("the on-demand economy will grow to $24 billion"). Because entrepreneurship is tough, only those with a true sense of mission will persevere through difficult times.
3. Go deep and excel in a field before it becomes mainstream (Craig Shapiro): A common trait among successful people is "pursuing and becoming good at something before it gets hot." Once McKinsey writes a report, the opportunity set actually shrinks. Analogy: the person who keeps practicing the trombone, and when the trombone suddenly becomes mainstream, they have already been practicing for ten years.
4. LPs themselves are the best source of early deal flow (Craig Shapiro): Collaborative Fund selects LPs with entrepreneurial backgrounds (founders of OpenTable, Meetup, YouTube), who have access to a large number of early-stage projects but lack the time to evaluate them. The fund becomes their "outsourced" channel. This is far more efficient than cold-start "warm leads."
5. The consumer packaged goods (CPG) sector is undergoing a structural shift from "large-scale industrialization" to "small, independent, artisanal" (Craig Shapiro): This market is several orders of magnitude larger than the tech market, and every category is being transformed. Large companies struggle to grow and turn to M&A to acquire emerging brands (Dollar Shave Club acquired for $1 billion), creating favorable exit environments for early investors.
6. "Don't polish a turd" — maintain complete transparency with investors (advice from Craig Shapiro's LP): When things go wrong, investors want to be the first to know, not a glossed-over version. This gave Shapiro "permission to share the downside and discomfort," and it is one of the most generous gifts he has ever received.
7. The biggest miss was turning down Uber's seed round (Craig Shapiro): Despite having written a car-sharing business plan himself a few years earlier, he declined because "the round closed quickly, and I hadn't met the founder." He later became an early investor in Lyft — "learning from mistakes."
8. Investing in companies that are "better for the individual and better for the world" is not charity, but a source of excess returns (Craig Shapiro): The market for people "willing to sacrifice to do the right thing" is limited in size, but the market for people who "want to do the right thing but don't want to sacrifice personal interests" is "huge and still growing." Companies that can satisfy both will generate the largest returns over the next decade.