For Startups

Zell Capital invests in early stage companies, specifically in seed and Series A rounds. We invest through equity, debt and debt-like (eg revenue sharing) financing. Our aim is to partner with great entrepreneurs and teams to help achieve growth goals.

Startup FAQ's

The easiest way to engage with us is through completing this form.

We do not require warm introductions and we accept inquiries from across the United States.  Unfortunately at this time we do not invest in startups outside of the United States.

We invest between $250k and $2 million in seed and series a funding rounds for technology and tech-enabled startups. 

 

We invest in seed and series a financing rounds. We will invest in both equity and debt financing rounds.

Seed financing rounds are generally the first significant funding round for a startup company. Generally, the companies that raise seed funding have developed a business concept into a minimally viable product and have proof points of market interest, but lack significant traction. 

A startup may choose to raise a Series A round once they have developed more traction (established revenues, a growing user base or other key milestones). The Series A funding will allow the company to continue to grow at a faster rate than they would be able to otherwise.

For seed we commonly invest in the following instruments:

  • Convertible Note – A convertible note is an investment vehicle often used by seed investors investing in startups who wish to delay establishing a valuation for that startup until a later round of funding or milestone. Convertible notes are structured as loans with the intention of converting to equity. The outstanding balance of the loan is automatically converted to equity at a specific milestone, often at the valuation of a later funding round.
  • SAFE – A SAFE (simple agreement for future equity) is an agreement between an investor and a company that provides rights to the investor for future equity in the company similar to a warrant, except without determining a specific price per share at the time of the initial investment. The SAFE investor receives the future shares when a priced round of investment or liquidity event occurs. 
  • Common Stock – Common stock is a security that represents ownership in a corporation. Holders of common stock elect the board of directors and vote on corporate policies. This form of equity ownership typically yields higher rates of return long term. However, in the event of liquidation, common shareholders have rights to a company’s assets only after bondholders, preferred shareholders, and other debtholders are paid in full.
  • Preferred Stock – Preferred stock is a security that represents ownership in a corporation. Preferred stockholders have a higher claim to dividends or asset distribution than common stockholders.

We will lead rounds and are comfortable being the only investor in a round or investing alongside others.

For series a rounds we will invest in common or preferred stock. We will also invest in debt and debt-like financings, such as revenue-based financing. Revenue-based financing, also known as royalty-based financing, is a method of raising capital for a business from investors who receive a percentage of the enterprise’s ongoing gross revenues in exchange for the money they invested. In a revenue-based financing investment, investors receive a regular share of the businesses income until a predetermined amount has been paid off, which is typically a multiple of the principal investment. 

No.

The modern venture capital industry is based on a “Power Law” investing model. The basis of this model is that each investment a venture capital fund makes must have the capability to return the total amount of the fund. 

As a registered investment company we take a different approach. About 75% of our portfolio will be invested in ‘return the fund’ potential startups, and 25% will be invested in startups who have significant growth capability, but are not ‘return the fund’ startups. We have flexibility to invest via debt-like instruments, such as revenue based agreements, which provide startups with growth capital and investors with healthy returns.

Yes, we will lead both seed and series a funding rounds. We are fine with being the only investor in the seed round as well.

Before investing you should carefully consider the fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which you can find at www.zellcapital.com/prospectus or by contacting US Bank at 1-888-484-1944. Please read the prospectus carefully before you invest. 

An indication of interest in response to this advertisement will involve no obligation or commitment of any kind. 

Our investments in what we believe to be rapidly growing venture-capital-backed emerging companies may be extremely risky and we could lose all or part of our investments.  Significant risks of investing in venture capital backed emerging companies are: these companies may have limited financial resources, limited operating histories, and have generally less predictable operating results. Because they are privately owned, there is generally little publicly available information about these businesses.  Also, early-stage and development-stage companies have a high rate of failure and often experience unexpected problems.

We plan to focus a significant portion of our investing in technology companies, which may cause the value of our interests to be susceptible to factors affecting the technology industry and therefore subject to greater risk than an investment in a fund that invests in a broader range of securities.

The marketplace for venture capital investing has become increasingly competitive, making it difficult for us to locate an adequate number of attractive investment opportunities.

Because our investments are generally not in publicly traded securities, there will be uncertainty regarding the value of our investments, which could adversely affect the determination of our net asset value.

One of the key elements of our structure as an Access Fund is the potential for investors of the type we expect to attract to provide expertise to our portfolio companies in various areas. There is no guarantee that any of our investors will, in fact, have expertise that would be useful for any of our portfolio companies, or if they have such expertise, that they would have any interest in working with our portfolio companies.

We have identified only a few specific investments that we may make with the proceeds from this offering. As a result, this may be deemed to be a “blind pool” offering and you will not have the opportunity to evaluate historical data or assess any investments prior to purchasing our Shares. 

There can be no assurance that the results predicted or targeted will be attained, and actual results may be significantly different from the statements on this website. Also, general economic factors, which are not predictable, can have a material impact on the reliability of our targeted results.

 Investing involves risk.  Loss of principal is possible.

The Fund is distributed by Foreside Fund Services, LLC.

Investing in our shares involves a high degree of risk. Before buying any shares, you should read the discussion of the material risks of investing in our shares in “Risk Factors” in the prospectus, a summary of which is also found here.  Our shares will not be publicly traded, and you will have very limited liquidity, may not be able to sell your shares, and may not receive a full return of your invested capital, regardless of how we perform.

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