Mecca Tartt
On this episode of the Atlanta Startup Podcast, we’re sitting down with Rachel Wilson, who is the Head of Operations for Collab Capital. Welcome, Rachel.
Rachel Wilson
Hi, Mecca. Thank you for having me.
Mecca Tartt
Absolutely. So, I want you to share, before we dive deep into the amazing work that’s taking place at Collab Capital, I want you to share a little bit about your background and how you got into VC.
Rachel Wilson
Yes, of course. I always say that the way I got there became very unconventional. But I think that for many people of color, and women with different diverse backgrounds who are getting into VC, an unconventional process usually is the way that they do get in.
So, I grew up in a very entrepreneurial family. My father is a service-disabled veteran who was in the Army in Germany, and we lived there for about 10 or 11 years. But even then, he was very entrepreneurial. He started his own restaurant while in the military out there, and he continued to do that when we moved over to Atlanta, the black mecca of entrepreneurs, as well as other things, as well. I have just always been very exposed to entrepreneurship. But through that journey of his, I saw the challenges with access to capital, always bootstrapping, always, you know, pitching, but always had really great relationships with banks. Always thought so against the bank picture. Yeah, great banker relationship. But I just knew how important it was to have access to capital growth through business. Fast forward, as I gained additional experience through my economics background and my supply chain background, I got really interested in the space.
When I was moving back from New York back to Atlanta, my boyfriend had joined this Google for startup event that was happening. And I ended up going, and I met Justin Dawkins, who’s now one of the partners at Collab Capital, and he just briefly mentioned, hey, a group of friends of mine is getting ready to start a venture fund. We’re going to, you know, unapologetically invest in black innovators. And I was like, whatever that is, I gotta do it. And so that’s, that’s how I got in. I talked to Justin and found out that we do a lot of the same people. Barry Givens and I knew each other from my days in New York, working for a Wine and Spirits company up there. Jewel and I knew some of the same people. So it was really just meant to be, and I really wanted to be able to be their right hand and really work on the things that I knew, which are Operations and Business Development. And those skills have been really helpful in what I do every day at Collab.
Mecca Tartt
Absolutely. So let’s dive deep into Collab Capital, what stage do you all typically invest in? And what’s typically the type of investment size when it comes to checks and also wanting to find out a little bit about the startups that you all focus on?
Rachel Wilson
Yes, so Collab Capital had its first inaugural fund that we raised back in 2020 to 2021 for over $51 billion. And we physically invest in black-owned, tech-enabled companies, industry agnostic, but tend to lean heavily in the case of network capital, future work, future of care, and some future of learning. So ed-tech, leaning really heavily in the space of infrastructure enablement, for quality of life, the way that we live, the space that we live in, the water resources, simply infrastructure and the facilities we work and live in. We are really interested in the ESG aspects of those businesses. We tend not to look into highly research-heavy and R&D-heavy bases. So definitely like the sector or segment of B2B staff companies to check sizes of $500,000 to a billion out of our first fund. And we’ve allocated, I would say, a little over 20 million out of that amount that we have so far. Most of the rest of it will be going to reinvestment, and we’re looking for probably investments, another, you know, maybe five or six more companies out of fund one. We are currently raising for a second fund, which will really focus on the stages of Seed and Series A, whereas our first fund is Pre-seed and a few Series A companies. The second fund will be 400 million, closing that out next year, and hoping to do check sizes from there a million to 5 million.
Mecca Tartt
Okay. And then so for founders that are listening in and they’re interested, they are African American founders, which obviously the statistics show that there’s such a great need, where African Americans receive less than I believe it’s 3%, in funding for their startups. And that’s something that Collab Capital has really, you know, made sure that they’re going to support African American founders in this way. How does the founder go about getting in front of flat capital? What’s typically the process?
Rachel Wilson
So there are two ways that I recommend. One is definitely going to our website, we have an application, and people can fill it out. And that comes through our funnel, our analysts send it out to us to do some preliminary review of the business, if there is an interest, we’ll set up a call and dig a little further from there. Another way that I definitely recommend is to look at the type of company that we have in our portfolio, follow and understand the work, the places, and the thought leadership that comes out of the team, especially the partners of Collab Capital, so you can understand if your business is a fit And if it makes sense. If it does, and you have relationships, circle around us the circle of influence, you know, try to reach out to the people that you know, have the soft intros to hope that Collab Capital, like the partners, myself, or any of our other teammates, and then from there, once you’ve had a chance to kind of, maybe have a first initial call with someone, understand really, if it is a good fit, go ahead and apply and then go through the process.
Mecca Tartt
Okay, what do you find that is the biggest need when it comes to the founders that you all do take on the founders and that you do invest in? What’s the biggest need for you when you see African American founders?
Rachel Wilson
Personally, I feel that the biggest need is social capital and human capital, yes, there’s definitely a need for actual financial capital for founders. There’s definitely a disparity in the amount of allocation that is going to black businesses. And there’s very much a need there. But in addition to that, we also need to make sure there’s diversity in these companies that are utilizing services and products every day, that go into our communities and have our communities consume their services and products, they should be doing business with our communities, as well. That’s how wealth is going to be generated and sustainable. So we need the cash so that we can continue to grow. Sometimes we need diversification in the type of cash allocation we’ve received, capital allocation, whether that is debt, as well as equity options like venture. But we also need to make sure that these companies and these founders have the ability to work with large companies that have already received amazing contracts with huge corporations, especially those that made that commitment out of the unrest that was happening during 2020 and over the many years, as they’ve said that they are interested in diversity. That is also part of environmental, social, and governance work. And so, to me, if that is also played into opportunities of success for founders, I think we would see a lot more companies beginning to get those opportunities.
So the point of that is like the work that Ariel Investments is doing in this space with the black fund that they have black project plans that they have. So they have over a billion dollars, where they are actually purchasing companies that may not necessarily be black and what they’re putting in place in diverse leadership. And they are also choosing companies that will have the ability to then already have the ability to already have contracts with major corporations and big businesses. The reason why they did that and we had a chance to have Mellody Hobson speak to a group that I’m a part of called Black Women in VC will talk about later, and she mentioned how important it was not only to have the means the dollars but because these companies already have these contracts are putting in place these diverse team. It is making sure that there’s going to be a speedy development, economic development with these companies. So you’re not just looking to have them fundraise, but you’re also making sure that they have the ability to succeed beyond the initial cash user that they’re receiving.
Mecca Tartt
No, that absolutely makes sense. And you talk about, what came out in 2020 and 2021. With the unrest that happened, you know, specifically, a lot of companies really focusing on Diversity and Inclusion and making sure that when they sat down and looked at the companies that they were actually working with, identifying whether or not their portfolio is diverse when it came to supplier diversity and the vendors that they’re working with. And so, I love that, you know, Mellody is doing that as well to ensure that the companies aren’t just receiving the funding, but that they actually have the resources that they have and the contracts needed in order to be successful. And leaning into that with Collab Capital with the founders that come on board with you all, what is the process for helping them with that process to set them up for success when it comes to securing contracts? Is there anything in place that assists those founders?
There’s so much work that’s being done with a lot of founders. And you mentioned Mellody, who actually supports founders and makes sure that they have access to the contracts. And really, we saw a lot of a movement that happened in 2020 and 2021 from a lot of companies wanting to really ensure that they diversify their portfolio, specifically with supplier diversity. And really, founders need that in order to be successful, no matter how great your company is, if you don’t have it, if you’re not on contract with some of these major corporations, you’re not going to be as successful. So how does Collab Capital, with such a big name and big space here in Georgia, ensure that the founders that you all work with have those introductions to those companies?
Rachel Wilson
That’s a great question, Mecca. So we’re doing a lot of great work in this space by really focusing on things that don’t matter, like profitability, having these types of access to contracts, not only from a corporate perspective but also ensuring founders are educated on government contracts, too. So, some of the things that we’ve done, for example, build playbooks around sales. I’ve traded one around supplier diversity, specifically, how to get certified, whether that is through corporate opportunities or government contract opportunities. The different resources that are available here in Georgia, Georgia Tech has a Procurement Technical Assistance Center, which is really helpful at providing guidance for free on how to get access. We also align some of our founders with what we call Growth Partners. So these are people who have specific areas of expertise and networks that can quickly and exponentially get them to the spaces and people that will help them grow. And it’s in a way that doesn’t dilute their business, we provide a portion to those folks who are both partners. And in that way, they’re incentivized to support the founders, and the founder also doesn’t have to dilute their equity position. But that was that additional resource. So really, another great way that we’re supporting founders. And then we have some amazing LPs we’re doing more work to ensure that we will be able to understand what the opportunities are on their business side for our piece of diversity work, what resources they provide to our founders, and even other founders that are not in our portfolio. We do a lot to make sure they have and understand ways to go after these opportunities.
Mecca Tartt
Absolutely. And I want to say that I saw on social media last year that you all did a founder’s retreat or something like that. And it seemed like there was so much excitement around it. And I always say there’s something so very special about bringing founders together. You know, we have a Startup Runway Showcase, you participated as a judge during the last Startup Runway Showcase. And when founders actually connect, I think it’s so easy for founders to operate in a silo, right? They’re focused on their business, they’re focused on the day-to-day. And so having that support system from your LPS, having the opportunity for them to connect with other founders, how do you all cultivate those connection points, even, for instance, if you want to share a little bit about Black Women in VC, and how are you all able to support that there?
Rachel Wilson
Yeah, so again, another great question, Mecca. I love talking about this. So as you mentioned, we’ve done a founder retreat with Collab Capital for all of our founders last year, bringing in experts from MailChimp to business moguls and black founders who have exited at large firms. And so you always want to make sure we’re exposing those two resources that can help them to think a little bit differently, their points of view and act differently, their businesses and give them inspiration. Obviously, also, the partners are all operators themselves. So always out and about on panels and things like that. And then we’re all a part of different groups that are really supportive. And not only in the equal founders but for diverse managers in the VC space as well. So as you mentioned, Black Woman in VC. It was started by a woman who wanted to find other black women who are starting in venture firms or had careers in space or time. But as you can see together, how to share knowledge and resources, where you’ve gotten along in your career, but then also the performance of your funds, if that’s the route that you’re going from actually creating a funnel yourself.
So she was like the only black woman that she was at and decided, hey, you know, how do I just take off something? So back in 2020, she started Black Women in VC with only like five people in San Fran. We now have over 270 members and are growing, and amazing resources and people come to support us. We’ve had Mellody Hobson talk to our membership about the work she’s doing with Ariel Investments and her feelings about investing. So these have been really great opportunities. This August, we’re doing our retreat again for our members in Martha’s Vineyard. We will all be coming together to get additional education around investing in VC, the performance of our funds, and access to allocators who can help us to continue to invest in diverse and diverse spaces and investment spaces that I care about. So really amazing work that all the ladies are doing there. And it’s a blast to talk about.
Mecca Tartt
Absolutely, absolutely. No, that sounds incredible. And it all sounds like it’s also bringing together it’s creating a space in a form for women who are likely, for a lot of them are the only ones in their space, the only in their state are very few. So it’s definitely a connection point. But I also see, from the standpoint of founders that are listening in an opportunity, where if you know, members are listed, or the VCs are listed, that are a part of black women in VC, where if I am a black woman founder that would prefer to be invested in by black women, that’s an opportunity for me to make some type of connection point with black women and VC. So I think it’s amazing.
Rachel Wilson
Definitely, find us on LinkedIn for that. We are going to be doing an actual pitch competition next year with Serena Ventures in support. So that will be an opportunity for founders to connect not only with our VCs but other VCs to get exposure. So more to come.
Mecca Tartt
Will this pitch competition that Black Women in VC is doing in conjunction with Serena Ventures, is that going to be an in-person pitch competition? Yes. Wonderful, wonderful. And founders that are from all over the US can apply? Or is it specific to a certain area?
Rachel Wilson
All over the US! Diverse founders. So it doesn’t have to be black women-led.
Mecca Tartt
That is wonderful. Well, Rachel, thank you so much for joining us on this episode of the Startup Atlanta Podcast. This has been such a treat. And if you can share just a little bit before we end if you can share a little bit about how the founders, the listeners, and VCs who might be listening in, if you can share a little bit about how they can stay connected to you.
Rachel Wilson
Yes, of course, find me on LinkedIn. Definitely go to Collab Capital for our website for Black Women in VC, and check us out on LinkedIn, as well.
Mecca Tartt
Wonderful. Thank you so much, Rachel, for joining us. This has been another episode of the Atlanta Startup Podcast with sitting down with Rachel Wilson, who is the Head of Operations for Collab Capital. Thank you so much, and we will see you soon.
Rachel Wilson
Thank you, Mecca. Wonderful to be here.
Lisa Calhoun
We’re thrilled to have you as an Atlanta Startup Podcast listener to help you get the most out of the experience. Let me invite you to three insider opportunities from our host Valor Ventures. First, want to be a guest on this amazing show. Reach out to our booking team at atlantastartuppodcast.com. Click on booking, It’s a no-brainer from there. Are you raising a seed round? Valor definitely wants to hear from you. Share your startup story at valor.vc/pitch. Are you a woman or minority-led startup valor sister program? The Startup Runway Foundation gives away grants to promising startups led by underrepresented founders. The mission of the Startup Runway Foundation is connecting underrepresented founders to their first investors. Startup runway finalists have raised over $40 million. See if you qualify for one of these amazing grants at startuprunway.org. You can also sign up for our next showcase for free there. Let me let you go today with a shout-out to Startup Runway presenting sponsor Cox Enterprises and to our founding partners, American Family Institute, Truist, Georgia Power, Avanta Ventures, and Innovators Legal. These great organizations make Startup Runway possible. Thanks for listening today and see you back next week.
