From Startups to Stewardship: Eric Paley Brings Founder-First Values to Public Service

I’ve been fortunate to know Eric Paley for almost 25 years. First as a classmate, then as his seed investor, and for the last 16 years as a business partner. Today, I add “proud constituent” and “devoted advocate” to our list of affiliations, though none will ever outweigh “friend.”

Eric has chosen to step away from Founder Collective to assume the role of Secretary of Economic Development for the Commonwealth of Massachusetts. Anyone who has ever met Eric will instantly know why he is an inspired choice and a perfect fit. He has an exceptional mind for business but is also one of the most ethically centered people I’ve ever met.

I first encountered Eric during our orientation at Harvard Business School. We debated case studies vigorously, played squash competitively (he whipped me), and became close friends. Before we cofounded Founder Collective, I had the good fortune to seed-invest in Brontes, the 3D dental scanning company that Eric co-founded in Boston, together with FC Managing Partner Micah Rosenbloom. I distinctly recall feeling that it didn’t matter to me what they would build; I just wanted to be involved with founders of this caliber. I always prefer to invest in the “who” over the “what” and never have I been more validated than my investment in Eric and Micah.

After successfully selling Brontes to 3M, the stars aligned once again for us. Eric and I explored setting up a venture fund that would seek to support tech founders at the very earliest stages of their journey. It wasn’t an easy decision. The 2008 Global Financial Crisis made raising a fund at that moment a challenging proposition. However, the opportunity to work with Eric was enough of a catalyst for me to relocate my family to Boston from halfway around the world.

We thereafter took the time to work fastidiously through co-managing a fund. This included facing the friction of working as equal partners and celebrating our individual strengths. We learned how to respectfully test each other’s convictions and to celebrate when events validated them. This conviction has influenced a generation of entrepreneurs and startups globally – including Uber, The Trade Desk, and Coupang, to name a few – as well as five $1B+ startups in Massachusetts: WHOOP, Formlabs, Desktop Metal, Drift, and PillPack. Individual achievements celebrated together taste so much sweeter.

Micah joined us a few years later. Partnership augmentation is challenging when one cares deeply about culture and mutual respect. We have never taken for granted the privilege of working with close friends. Eric has a knack for separating work and personal, which I so admire. He can strongly disagree with a professional issue but show up for a family dinner and not mention a word of it. I am beyond proud of Eric’s appointment, and I simultaneously join the line of those who will miss his daily presence and wisdom very much. My advice is to stock up on hugs.

As investors, we back founders at the early stage, but we have responsibilities that last decades. I recall that after a portfolio company went public, we debated whether to distribute shares or cash to our patient investors. It was a tricky decision with significant implications. We had already consulted some of the most intelligent people we knew, and I suggested we ask a few more. Eric turned to me and said, “We are the adults.” That’s shorthand in our partnership; we can ask for advice endlessly, but at some point, we have to make the call and live with the consequences. Eric values every perspective, but he never forgets where responsibility lies and gladly accepts it – to all of our benefit.

While we have been blessed with investment returns and consider ourselves privileged to work with this special team, it is the principles, values, and standards that Eric has infused into Founder Collective that will most endure. At Founder Collective, putting founders first is a principle structurally designed into the fund and grounded in deep respect and firsthand knowledge of how hard it is to build something that lasts.

One of my favorite business aphorisms is, “whoever builds, leads,” and Eric is a born builder. His colleagues know he is phenomenally talented and I’m sure locals would agree that he is “wicked smaht.” But it is his commitment to ethics and morality that set him apart in an industry filled with straight-A students. I’ve lost count of the times Eric has backed founders – against his short-term financial interests – when other investors sought to take advantage of them. True public servants seem to be frustratingly few and far between, but Eric always puts values ahead of valuations. Put simply, Eric is a “mensch.”

Now that this news is public, I’m heading off to buy Massachusetts bonds and grab lunch with my friend before duties to the Commonwealth monopolize his calendar.