Know All That! | Funding for Good: Where Socially Conscious Startups Get Their Money

0 Comments/ in features, mashable, Social Good, Uncategorized / by Lauren Hockenson

May 3, 2012

Big Idea: To provide angel or seed funding to companies that are not only creative, but also are aiming to move the world forward in meaningful ways.

Why It’s Working: Although the company is small, Collaborative Fund has made a huge impact by funding companies working towards change.

Skillshare. TaskRabbit. Kickstarter. Codeacademy. What do all of these startups have in common? Aside from their popularity, all of these companies have received an investment by the Collaborative Fund.

The seed-round fund was formed just over a year ago by angel investor Craig Shapiro, yet it has already worked with some of the most innovative, socially-minded startups around today. Shapiro says that the Collaborative Fund looks for companies with two distinct features: creativity in solving big problems, and collaborative consumption.

“It’s the idea of extracting productivity out of existing resources,” Shapiro explains. “Sharing products and services with others instead of producing new products.”

Since its beginnings, the relatively small fund has granted an average sum of $100,000 to companies that fit this ideal to promote collaborative consumption in a variety of spaces. Shapiro says that errand-running internet service TaskRabbit, for example, is not only convenient for the user looking to get a menial task, such as laundry, accomplished by a trusted worker, but also provides an important economic benefit for the “Rabbits” — the people TaskRabbit vets and employs to carry out the daily influx of errands.

“There are Rabbits in San Francisco earning roughly $5,000 a month,” Shapiro says. “There’s real money exchanging hands, and for someone who is looking for work, that can be incredibly powerful.”

It’s that sort of added value that Shapiro and Collaborative Fund look for in a potential startup. Shapiro says that the company just funded a rental marketplace startup called RentCycle — now rebranded as Getable. Shapiro explains that he was drawn to the company’s philosophy of making the process of renting any kind of equipment much more efficient.

“Imagine OpenTable, but for every other rental business: tuxedos, bicycles, bouncy houses,” Shapiro adds. “Those types of things.”

Shapiro says that the Collaborative Fund is always looking to fund companies that push the world forward. And, he sees collaborative consumption as an increasingly important aspect of the consumer economy.

“I still think we’re very early, but I think Airbnb has opened people’s eyes to the potential,” Shapiro says. “Entrepreneurs have now seen that success and said, ‘How can I apply this to fill-in-the-blank?’”

Shapiro says that in terms of success, he is inspired by one of the companies in his own portfolio: Kickstarter. The highly-popular crowdfunding source serves as a reminder to Shapiro that the excitement around collaborative consumption is truly gaining traction. And, of course, he’s always looking for the next big thing that will revolutionize a part of our world.

“I don’t think it’s going to work for every business model,” Shapiro says. “But there is going to be a lot of innovation and a lot of traditional industries that will be disrupted in using collaboration.”

Series presented by GE