Frequently asked questions
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What is the base criteria for investment?
We are looking for early-stage companies . At minimum, we like to see a minimally viable product that has already been tested. Ideally, the product should already be on the market and generating some recurring revenue, as it signals that people are willing to pay for it. If your product is still in the idea stage, or you’re still building your MVP, you are likely too early for us.
What is the average check size for a Fund I investment?
We write first checks between $500-750K and follow on investments up to $2M. Our initial check size typically allows founders to reach the key milestones in their early stage startup, and therefore we prefer to either lead deals or be the sole investors in the round.
Are there business sectors that Collab Capital does not invest in?
There are a few industries that will almost always result in a quick “no” from us: biotechnology, cannabis and tobacco, cryptocurrency and tokens, food and beverage, gambling, liquor and spirits, professional services agencies, brick-and-mortar businesses (physical retail) and real estate. Due to the nature of our fund, Collab Capital is not permitted to invest or provide grants to charitable organizations.
What qualifies a company as being Black-owned?
Companies that have at least one founder who identifies as Black/African American. This founder must also have a controlling equity stake in the company. To learn more about our mission to support Black founders, check out this blog post from our Managing Partner, Justin Dawkins.
What is the SPACE agreement?
The SPACE is a Shared Profit and Collaborative Endorsement agreement. A novel funding tool by Collab Capital that is specifically designed to leverage profit-sharing as a means of investment returns instead of the monetary conversion of equity acquired during traditional investment stages that lead to an exit or IPO.
What is the SPACE advantage?
The advantage of utilizing the SPACE agreement is that it is a convertible tool that does not remove the possibility of investors entering into a traditional equity agreement. When used for post-revenue companies at the seed stage, founders retain more equity which they can leverage to seek larger fundraises at the Series A-C stages. On average only 30% of venture-backed companies reach the Series A stage of fundraising and only 25% of that group produce sizable returns.