Will The Next LEGO Want Collab+Sesame As An Investor?

The launch of Collab+Sesame is exciting on a number of levels. On a personal level, we all grew up with Sesame Street.  Working with the company that taught us our ABCs and created Snuffaluffagus feels like a fulfillment of childhood dreams. That’s what Sesame Street represents for a lot of people, which is what makes this so powerful. They are a cultural icon that has shaped the lives of kids and families for decades, and they are deeply knowledgeable about what it takes to build a transformative brand and to effectively educate children.

Sesame Street’s investment strategy is distinct from traditional corporate VC investing. They have decided to work with established venture capital firms that have deep experience in selecting and supporting entrepreneurs, which then allows Sesame Street to focus on leveraging its strengths to help the portfolio. Specifically, Sesame Street will apply its network and expertise with kids, brand-building, market analysis, and research, which complements our knowledge of venture capital. We both believe that this combination will result in great investment outcomes.

Equally as exciting as the partnership, this is one of the first times that a non-profit has invested in an asset class and fund manager that aligns with its mission. The funds for this actually come from Sesame Street’s prior company-building work: namely, the sale of Sesame Street’s stake in Sprout and Noggin. Sesame Ventures is now investing a small portion of these proceeds as an LP in VC firms, including Collaborative Fund, rather than in more traditional stocks, bonds, commodities, and real estate. This is a win-win: Sesame Street’s resources will have the chance to grow exponentially AND further fulfill its mission as portfolio companies succeed.

For Collaborative Fund, this partnership enables us to more effectively and efficiently in a vertical that excites us. We’ve made some great investments related to kids already, like Hopscotch, DIY, and Revolution Foods, and we think that child development is a growing sector with a lot of opportunity to create companies that change the world and drive exponential financial returns.

Partnering with Sesame Street allows us to sharpen our focus in this area with the help of what we think is the ideal collaborator. An investment from Collab+Sesame instantly lends credibility to an early stage startup that has an exceptional product that is best-in-class for kids but that doesn’t yet have the corresponding name recognition. Beyond that, Sesame Street plans to match each portfolio company with an internal champion from Sesame’s team who can help with research, market analysis and understanding, and branding in a way that VCs never could. We don’t expect that every startup will benefit from leveraging Sesame Street’s content and characters, but we believe the opportunity is tremendous for those that do.

Our goal is to fund next generation companies which will help kids grow stronger, smarter, and kinder, and we love having the opportunity to do that with the help of the organization that taught us the (A)lphabet. :)