Opportunity for founders
No investor would contemplate investing in just one company – whether in private or public markets, even if it’s Apple! Diversification is investing 101. And yet everyone expects a founder to depend, for their entire success, on a single company.
As founders ourselves, we know that accepting and embracing risk is inherent in building a game-changing company but, while we follow our passion for problem-solving, entrepreneurial wealth is built almost exclusively in the form of trapped equity.
Secondaries often only become available post-Series B and generally entail deep discounts, loss of voting, and disruption to the cap table rendering them, in many cases, impossible.
Founders deserve better.
To solve this problem, Collective Equity has created an innovative fund alongside one of the world’s largest asset managers to reshape the secondary landscape - providing founders and early investors (”associates”) with the opportunity to both extract cash AND own a share in a portfolio mirroring that of a top-tier VC fund.
Founders (and their associates) join our fund by contributing a small portion of their equity (typically with a value of £2-6M), receiving in exchange immediate partial liquidity, together with a stake in 10-15 high-growth businesses backed by some of the UK’s most reputable VCs.
Each investee company undergoes rigorous due diligence by Collective Equity, with approval from our Investment Advisory Committee consisting of a Former MD at Citi Ventures, a Former Partner at Silver Lake and a Special Advisor at Vitruvian.
And it’s much more than a portfolio. Participation in the fund creates an exclusive network where the most accomplished founders have a vested interest in helping each other succeed.
*“As a founder and investor, I was truly impressed by the Collective Equity model. They have developed a powerful mechanism that not only encourages founders to remain committed to their work and benefit from their success but also allows them to diversify a small portion of their eventual net worth through strategic investments in similar ventures led by other brilliant founders. This additional opportunity for liquidity through Collective Equity significantly enhances founders' resilience and bolsters their prospects for success.
The members of Collective Equity's Investment Advisory Committee bring exceptional investment and operational experience in many domains. The firm is curating an amazing list of companies that founders can be exposed to.”
Harel Kodesh - Former Operating Partner at Silver Lake & VP at Microsoft*
The Collective Equity Fund
Founders and associates gain access to early liquidity by receiving 15% of the value of their equity contribution in cash, net of fees, on the day the fund is launched (e.g. a £4m equity contribution will receive £600k back in cash on day one). This equity contribution also allows the founder to become a Limited Partner holding a 10% stake in, for example, a £40m fund, allowing the founder to participate in the future exits of the fund’s portfolio companies.