Offering Liquidity and Diversification to Ambitious Founders

As founders, we know that accepting and embracing risk is inherent in building a game-changing company, and while we follow our passion for problem-solving, entrepreneurial wealth is built almost exclusively
in the form of trapped equity.

At Collective Equity, we believe that founders should be presented with more opportunities on their path to success as they achieve significant milestones. That is why we have designed a new innovative structure
to unlock the power of equity, for founders.

As featured in

Redefining Secondaries

We provide founders of Series A+ companies who have recently raised institutional funding the opportunity to receive some early liquidity by pooling a fraction of their equity with other high-growth companies and lending against the portfolio.

Our Partners


How it works

  • Fund Structure

    Collective Equity sets up the General Partner (GP) vehicle that manages the distributions of the exits. The shareholders of the portfolio companies contribute the beneficial ownership of their shares to the Fund, to become Limited Partners (LPs) creating the Portfolio.

  • Initial Distributions

    The fund takes out a loan against the Portfolio at a 20% LTV ratio. Collective Equity ringfences £50k p.a. over 10 years to cover expenses of the fund. The remaining cash is then distributed to the Limited Partners pro-rata to the market value of their contributions.

  • Exit Proceeds

    The principal and interest are repaid from the liquidity events (exits) of the underlying portfolio companies. Once the debt is repaid, the proceeds from liquidity events are distributed pro-rata. Collective Equity participates in 15% of any liquidity distributions through the fund.

Our Supporters

  • Rob O’Donovan, Co-Founder at Charlie HR, & Foundrs

    “I’ve seen first-hand how amazing things happen when founders come together to help support each other to build their ambitions. Collective Equity is a brilliant way to foster collaboration and share the journey with your peers - it’s a no brainer”

  • Simon Murdoch, Founder & Partner Episode 1

    “We like the Collective Equity model for founders - by releasing a modest percentage of their shareholding in their own business, they effectively invest in multiple similar early stage businesses. This de-risking means founders don’t have all their eggs in one basket so they can aim for a higher outcome for their own business”

  • Graham Hobson, Exited Founder at Photobox

    “Back in the first few years of my Photobox journey, I needed liquidity and to de-risk the long journey ahead. This was not possible from a normal VC round. If Collective Equity had existed then I would have joined”

FAQs

 

  • Active founders and shareholders can contribute a maximum of 15% of their equity. Non-active founders & shareholders have no cap on their contribution.

    The average contribution per company is £4m, which can comprise of multiple shareholders.

  • A thesis is agreed with a lender who lends against the portfolio aggregated. We distribute the loan upfront to all the founders on the day that they join the fund. The first exits will go to repay the loan. Once the principal + interest is repaid, the exit proceeds are distributed pro rata to the founders.

  • You will receive 15% of the value of your equity contribution in cash back net of fees on the day that you join the fund. The remaining 85% of your position goes to hold your position in a portfolio of high-growth series B+ companies.

  • In order to join the fund, a shareholder must have investor majority consent. We already have the backing and support from most VCs in the UK, including Atomico, Index, LocalGlobe & many more.

  • A founder will only contribute the beneficial ownership on a number of their shares. Therefore, Collective Equity will not disrupt the cap-table and all voting power will remain with the founder.

  • Collective Equity will have information rights on each company, but will not ask founders to create anything more than their usual quarterly investor updates.

  • Collective Equity takes the company's post-money valuation from its last funding round, or from the last liquidity transaction. This will determine their quota in the fund.

  • A Portfolio will consist of 10-20 high-growth, vetted companies.