1Mby1M Virtual Accelerator Investor Forum: With Taylor Greene of Collaborative Fund (Part 4)

Sramana Mitra: In the thesis-driven situation, you are looking for a team that can execute on that thesis. In the opportunistic cases, they come to you with the ideas. If you like them and fit your world view, you would accept.

Talk about a couple of ventures that you have invested in. Also just to give us a feel for how you think about these companies, talk us through the stage at which they come to you. What is it about them that captured your attention?

Taylor Greene: An investment we just announced is in a business called Step, which is a bank for kids. It’s a mobile-first bank that focuses on teens and kids. We spent a lot of time analyzing the market and trying to understand which areas were either still largely cash-based economies and have not yet moved into mobile-first digital banking.

There have been a lot of activities in that space addressing different populations. We felt that there was an opportunity in kids. We met an entrepreneur. He’s actually an entrepreneur that I’ve known for a long time. I’ve backed his last company. He’s CJ MacDonald.

He came to us with the idea. We already had a feeling that it was a real opportunity. We decided to make the investment based on that pre-existing thesis. It was very early. He just had an idea.

Sramana Mitra: How do you define kids in this case? What is the age group?

Taylor Greene: It’s mostly focused on teenagers. Right now, at least in the US, the teenager needs money to go to the movies or buy something. Get cash from their parents and then go out and make the transaction. If they want to save up for something, it’s largely them saving their own cash and not opening up a bank account.

There’s no reason to us why they can’t open a bank account. They’re largely on their mobile phones already. Some of them are using apps like Venmo to transfer money but they haven’t yet opened their own bank account. There’s no product out there that’s tailored directly to them. 

Sramana Mitra: Does the company work with other banks or is it a bank in its own right?

Taylor Greene: The company is a bank in its own right. They have a debit card where they use one of the more popular issuers to manage the card.

Sramana Mitra: Let’s do another example.

Taylor Greene: Another example of a company that we recently invested in is Four Days. This is in the apparel category. We invested in Four Days because we got really excited about the idea of something called a closed-loop manufacturing process.

One thing we didn’t realize was that the average person throws away 80 pounds of clothing every year. A lot of the clothing, given what it’s made of these days, ends up in a landfill. Apparel is one of the largest sources of items in landfills. That was a problem that the entrepreneur was looking to solve.

You buy a t-shirt for example from the company. Once you’re done with the t-shirt, you mail it back to the company. They recycle the material into a new t-shirt and then mail it back to you. It stays within their closed loop. It’s a way of doing e-commerce with zero waste.

It’s such a really exciting value proposition to us because we think there are a lot of consumers out there who care about the climate and care about sustainability and would rather pay a little bit more for a t-shirt that creates zero waste to the world. It’s an opportunity that we jumped on when we saw the deal.

Sramana Mitra: Very interesting. That’s a very cool one. Indeed, there is a tremendous amount of waste in the fashion industry. 

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Taylor Greene of Collaborative Fund
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