FUND OVERVIEW

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Please find a copy of our investor deck at this link.

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Who can invest?

All current Booth students and alumni are eligible to invest in CB Capital (hereinafter the “Fund”), except faculty members due to potential conflict of interests. CB Capital currently has two investment vehicles, CB Capital LLC (hereinafter “Main Fund”) and CB Capital Parallel Fund I AC LP (hereinafter “Parallel Fund).

 

Unaccredited investors residing in the following 8 states are eligible to invest in the Main Fund: California, Illinois, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, and Washington. Unfortunately, we cannot accommodate unaccredited investors residing outside of the aforementioned States.

Accredited investors may choose to invest in Parallel Fund and must show a proof of accreditation status. Please find the SEC definition here. There is no limitation for Non-U.S. citizens.

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How much can an individual invest?

Minimum subscription amount is $5,000 for current Booth students and $10,000 for alumni and other Booth-affiliated individuals. There is no cap.

What is the investment process? 

Sourcing Committee composed of selected current Booth students (hereinafter “Fellows”) will be sourcing investment opportunities that qualify for the investment criteria. The Fellows will engage in a general due diligence process and gather factual information about the opportunity.  Founder or representative of the company in review will be invited for one to one-and-a-half hour virtual pitch and live Q&A session, for which all Limited Partners will be invited.  The session will be recorded for those who cannot attend in person.  Every Limited Partner will have 5-7 business days to review all materials and individually vote whether to proceed with the investment or not.  To maintain the investment club structure, any and all Limited Partners who fail to vote consecutively will be vaporized and their stakes will be distributed equally to all other Limited Partners.

 

Who is managing the fund? 

Sourcing Committee, composed of selected current Booth students (hereinafter “Fellows”), will be managing the fund, with select professors and alumni with experience and expertise composing the Advisory Committee.  Please refer to the deck for visualization of the fund structure.

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Why invest in venture capital?

Venture Capital (VC) is a highly risky asset class where investments are made in the earliest stages of the company with a potential exit at the time of acquisition or Initial Public Offering (IPO). In line with the high risk, VC provides a potential for high rates of return. An extreme case of such asymmetrical returns is Accel’s investment in Facebook where they invested $12.7 million in Facebook in 2005 and reaped returns close to $9 billion (close to a 1,000x return). While there is big interest and desire of Booth students to learn about Private Equity and Venture Capital as asset classes, it is difficult to do so unless you are already “inside” the industry and/or have accreditation status. One of the core reasons why CB Capital was established is to let our members gain first-hand and real-world angel & venture capital investing experience.

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Why invest in Booth affiliated companies?

Examples of Booth alumni who have successfully raised venture capital:

• Stori (Bin Chen) has raised USD $50M

• Innoviz (Oren Rosensweig) has raised USD $252M

• Roofstock (Rich Ford) has raised USD $133M

• Nephroplus (Vikram Vuppala) has raised USD $75M

• Mobileiron (Ajay Mishra) has raised USD $158M

• Mu Sigma (Dhiraj Rajaram) has raised USD $209M

• Tally (Jasper Platz) has raised USD $92M

• Braintree (Bryan Johnson) was acquired for $713M

• Grubhub (Matt Maloney) went for an IPO at $2B

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How does CB Capital help?

CB Capital would be one of the first checks in the startup. The goal is for CB Capital to be the most helpful and value add investor in the earliest stages of the company. CB Capital has a large platform team to help startups with pitches, hiring, prototyping, customer acquisition and sales.

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FUND STRUCTURE & ADMINISTRATION

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What is the fund structure?

Please refer to the deck for visualization of the fund structure.

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What are the fees and admin charges?

There will be no official management fee (industry standard is 2%); however, the fund will cover all admin, legal, tax, and operational costs. There will be 20% carried interest, which will be awarded to the Fellows, selected Advisors, and Booth programs in the future (TBD).

 

Who are the advisors? 

We have a diversified group of alumni entrepreneurs (who have built and exited companies), investors (senior and mid-level investors in VCs), and professors (of entrepreneurship &  who will be forming the board of advisors. You can see our complete list of advisors here.

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What is the selection process for startups?

The Screening Committee composed of Fellows performs preliminary due diligence and decides whether to bring the companies to the Investment Committee, prior to which Fellows will conduct full due diligence and produce investment memo and analysis for Limited Partners.

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Why can’t we structure this as an angel network where each angel has the option to opt-in to an investment that the “fund” recommends?

One of the primary missions here is to let non-accredited student investors start an angel investing journey.  Our unique structure validated by a top law firm enables this.  If any accredited investors want to make separate, additional investments into certain companies we review, we will be more than happy to facilitate, given the availability. 

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Do you have any external partners who help with fund administration?

Yes - we have multiple partners supporting our operations and providing specialist advice. You can see our complete list of partners here.

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What is the communication strategy and governance structure for the fund?

The Sourcing Committee has a dedicated Slack workspace for communication.  There will be weekly meetings for sourcing and due diligence processes.  Booth students have access to quality research tools, including Pitchbook, CB Insights, Capital IQ, and more.  There is a Fund Wiki and templates readily available for structured works.  Select advisors based on their expertise will provide guidance to the due diligence process.  Before every pitch, the deck, memo, and any relevant materials will be shared with investors. 

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How do the Fellows operate and communicate?

• All CB Capital Fellows have access to a dedicated Slack workspace for communication

• There are weekly meetings for sourcing and due diligence processes

• Booth students have access to quality research tools, including Pitchbook, CB Insights, Capital IQ, and more

• There is a Fund Wiki and templates readily available for structured, repeatable work 

• Select advisors based on their expertise provide guidance to the due diligence process. 

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Please send out a fund model assuming the fund invested in some of the Booth success stories and some failed ventures. How will returns look like in different scenarios?

You can refer to the financial model here. You can make a copy of the model and play around with the inputs. ​

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ROLE OF LPs

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How are LPs involved in investing decisions?

​As a Limited Partner, you will have access to all due diligence materials, including investment memo, company deck, and any other relevant information. The full LP community votes on each investment decision.

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What if the LP vote is tied 50-50? 

In this unlikely case, we will call for a re-vote - if it remains in the deadlock, we won’t proceed (since we need a majority). 

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Will LPs receive any communications and updates about the fund?

• Before every pitch, the deck, memo, and any relevant materials will be shared with investors.   

• Quarterly updates are sent out to investors and an annual report will be accessible to all investors via Carta.

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Would the fund allow for accredited investors to invest above the minimum on specific deals?

We would be more than happy to facilitate a warm intro to founders for separate, additional investments for accredited investors.

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Since this vehicle won’t be leading investments this is a structure that would allow for more flexibility and for LPs to invest more/less in startups that fall into their area of expertise. I am already an LP in a seed fund and don’t want to invest outside of my current focus areas. For example, I’m already heavy in consumer and don’t want to put more money in consumer startups. I also think there needs to be someone with VC experience managing the 2Y/1Y fellows and having economics in the fund. 

Another primary mission of the Fund is to support Booth entrepreneurs who are heads down solving important problems out there.  With that said, we will not limit our focus areas down to certain verticals.  As we conduct due diligence for each opportunity, we will have support and guidance from an advisory board composed of experienced investors/operators.  Please refer to our deck for further information. 

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FUND RAISING

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How often will CB Capital raise funds? If you raise and close a fund in 2021 then deploy it over (3) years, does that mean future students between now and then would not have access to invest in Booth Capital and must wait for the next fund to be raised?

Current fundraising in Q4 2023 / Q1 2024 will be the last fundraising for Main Fund & Parallel Fund. Should there be sufficient interest, there may be subsequent discussions for next generations of funds.

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Why is the minimum investment $5,000?

​We had 182 survey entries, and the majority of the respondents chose $5k as a preferred check size. Lower minimum check size makes the fundraising process more difficult and creates administrative burdens with higher fees.  For example, if we aim to raise $1.5m with $1k minimum, we need 1,500 investors; while we need 300 with $5k minimum.

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CB CAPITAL FELLOWSHIP

We are currently not accepting applications, but we encourage you to reach out to us should you be interested in working with us in the future.

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Application Eligibility

All Full-Time, Part-Time and Weekend students can apply.  

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Compensation

There will be no cash compensation given to Fellows - however, Fellows and select Advisors will be provided with a certain portion of carried interest, pending level of contributions and impact, at sole discretion of the General Partner.