ICYMI: The New Face of VC
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In the month of May, Bloomberg News came out and said it's never been harder to make it in venture capital. This is hundreds of small VC firms struggling to raise money in the current market. With emerging managers seeing their total funding in the U.S. decline to about $17 billion last year from $64 billion in 2021. I will say that's not the case for our next guest who recently did a fundraise. I'm

Very excited to hear from her. Well, let's get to it. Collab Capital is what we're talking about. Actually closing a second fund with $75 million in committed capital to invest in early stage startups addressing foundational needs across work, healthcare, and community infrastructure. And so we want to talk about it and see what she's up to. Let's head to Atlanta, Georgia. She is the co-founder and managing partner of Collab Capital, Jewel Burke Solomon. She was head of Google for Startups,

where she created initiatives that deployed over $45 million in non-dilutive capital to Black and Latino-led businesses since 2020. Jewel, great to have you here. You know a lot about getting money into areas and startup entrepreneurs who maybe don't find it so easy to raise capital. First of all, the fundraise, let's go there because it has been hard to raise money in the VC world. How did you do it? Yes.

Certainly, and thanks so much for having me. It was not easy. It was a little bit challenging, but I think it came all together because of relationships and spending a lot of time. We spent a lot of time on the road, meeting with limited partners, getting them excited about our vision for shared prosperity and really telling a different story about how we're finding incredible entrepreneurs who are building a different type of future.

And so I think that's what got our limited partners excited. We had a number of LPs that were partnered with us in the first fund, which was a $50 million fund that we closed back in 2021. A number of our LPs came back to the second fund, and then we welcomed some new names as well. So we're really excited to now have fresh capital to continue on our journey. Because I'm here on the East Coast, Julem,

I talk much more often with private equity people than with VC people at a far earlier stage. It's more like one in a thousand, I know, with VC than it is with PE. But I'm always excited to hear from VC people about their success stories. So what are some of the companies that you've invested in that have really been winners for you?

Yes. So we're still early. So we can't call out the winners quite yet because we're still waiting on those exits to occur. But we do have some incredibly talented and great companies that are on the right trajectory. So some that I'll just call out because they're killing it right now. We have a company called Reverie, which is in the media space.

a company called IntusCare, which is in the healthcare space, PACE in particular for elder care, technology for elder care facilities. We have a company, our only consumer product company, Hairbrella. They're having a breakout year. And all of these companies that I'm mentioning, they're beyond $10 million in recurring revenue. They're meeting their customers and really having a lot of success. Wait, Hairbrella? That's something I don't have, I think.

Whenever it rains. It's for everybody. It's for everyone. Something interesting about that business is people, when they hear the name, they're like, oh, it must just be for women. But somewhere in the neighborhood of 30% of her customers are men. There's a ton of different products and it's really re-imagining...

headwear and rainwear and swim caps. And they have all types of products for just about anyone. Yeah. And even for kids when it comes to swim caps. I am curious how you pick and choose and what do you think in terms of the runway to ultimately some kind of liquidity event, whether it's an IPO or selling it off? How long do you foresee that you need to be funding? Because we do find...

whether it's because of private credit, private equity. There's a lot of money that's been sloshing around that enables companies to stay private longer. But having said that, it also means you've got to make sure that investors can be patient and ride it out. So I'm looking at, what is your runway for a lot of these companies? Is it three to five years, or how are you thinking about it? Yeah.

Yeah, when we meet companies and underwrite those investments, we're typically looking at a 10 year time horizon because we're investing at the seed stage primarily. And so we're going to be with these companies for a long time. We're ready for that long haul. But we are seeing companies that are really moving quickly towards revenues that we think will be

will equip them to sell. So some of those companies I just mentioned, they're well on their way and we expect exits within the next three to five years out of majority of the portfolio. What's the ideal exit look like to you? Because again, in private equity, it's a tough time for exits. Obviously, you have a

You have ample time to get there since you're looking out so far. But what do you want to be doing? Do you want to be selling something? Do you want to have an IPO? Has it changed? I think because the IPO markets have not been as open as we would like, you know, we are we are really underwriting markets.

a number of different potentialities in terms of private equity purchasing, strategics purchasing. But for us, we're looking at every deal that we do, we want it to be capable of returning the fund. So our first fund was $50 million. So that means that we're investing in companies with the hopes that they will return at least $50 million back to the fund. Second fund is $75 million. So that means the bar is raised a bit in terms of the deals that we will do.

in that fund. But across the board, we're very open to what makes sense for the business and really making those strategic partnerships so that we can introduce our portfolio companies to the right buyer at the right time. You've emphasized that experience on the ground leads to the most powerful innovations. And I'm just wondering if you could

Share an example from your portfolio or from your experience where you've seen a market kind of unlocked or opened up.

Absolutely. One of my favorite examples from the portfolio, another star in the portfolio is a company called Qlena Health. It's founded by a woman who is a registered dietitian, Vanessa Rossetto. And she was so close to this problem of the fact that, you know, your everyday person hasn't historically had access to a registered dietitian or nutrition help to help them along on their healthcare journey. And so having her experience working with patients, she's

She's been able to build an incredible company in Kulina Health where they are really focused on patient outcomes and delivering incredible care to folks along their nutrition journey. Yeah, an interesting portfolio of companies. Jewel, we've got to run, but hopefully we can check in with you soon in the future. Again, Jewel Burke-Solomon, she's co-founder and managing partner of Collab Capital joining us. I love the VC world. I love the idea in terms of you get kind of clues of what's to come maybe.

Me too. I think it's fascinating. And also your bets that are winners pay off big. Yeah, right. But you got to make a lot of bets. This is the Bloomberg Businessweek Daily Podcast.

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