The Villain Test

At Collaborative Fund, the first question we ask ourselves when evaluating a new investment opportunity is: If this startup becomes massively successful, will it make the world a better or more interesting place?

I’m extremely proud of this filter. It gives our partnership a clear compass that aligns our values with our actions, and provides a social fabric which loosely connects our expanding portfolio.

Collectively, the bigger, stronger, and more resilient our portfolio grows, the better it is for the world.

With this simple guiding question, we have attracted top tier talent and like-minded investors – both of which give us an unfair advantage when it comes to competing with others in the investment world.

However, applying this world-positive filter alone would not yield stellar financial returns. It optimizes primarily for doing good above all else - including at times financial rigor. Fortunately for humanity, there are organizations that do this today.

But Collaborative Fund isn’t one of them.

We are focused on investing in businesses that are pushing the world forward, while also aiming to outpace the market and produce alpha returns over the next decade and beyond.

To do this, we ask ourselves a second but vital question: Would a ‘villain’ invest in this company if their motive was one of pure self­-interest?

We call this The Villain Test.

This question was first introduced to me by a good friend, and Collaborative Fund investor, Ben Goldhirsh who founded GOOD Magazine and is Chairman of the Goldhirsh Foundation.

It is truly at the intersection of these two polarizing questions that lies the greatest opportunities.

Tesla is a great example. It provides an electric, renewable energy­-based transportation solution, all while appealing to the villain in us who wants a fast car with sex appeal.

There is a new generation of consumers – which choose and spend with their conscience but do not want to sacrifice.

We want food that is produced humanely and sustainably. But we want it to taste really good. See: Sweetgreen.

We want homes that are energy efficient, but state of the art and comfortable. See: Nest.

We want clothes that are manufactured responsibly, but fit better than ever before. See: Bonobos.

We want to invest our money in things that make us feel good, but help us create wealth. See: Collaborative Fund.

-Chief Villain 😊