Looking to invest in some of the world's top startups?
Our first fund (Alpha) launched in February of 2017, and it has already delivered excellent results. That fund invested in 31 companies in 2017, generating an Internal Rate of Return (IRR) of 23.5% by the end of 2017 (audited), over 40% at the twelve month mark*, and a phenomenal 58% at month 16*. Our second fund (Max Alpha), which launched in January of 2018, is already generating an IRR of over 40%* since inception. We are now seeking to add investors to the Max Alpha fund, and all new investors would participate in all of the fund’s investments, including those companies added to our portfolio earlier this year (many of which have increased substantially in value since our initial investment).
Invest With Us
Quake is raising its third fund, targeting a raise of $100M, to make roughly 600 to 650 investments over the next four years. We are targeting deals with high potential to exit in the 36 to 48 month range. Obviously, many deals will require more time, but our goal is to identify more mature early stage opportunities with the opportunity to exit within that time frame.
Generally speaking, most of our deals should exit within this window. This would equate to roughly 4 and 5 year exits if you were to compare us to other, earlier stage accelerators. If an investment is doing well and is headed to what we believe to be $100M or even $1B+ valuations, then we would certainly welcome a longer hold period, with a more lucrative exit.
What is an Accelerator?
An accelerator is typically a 3-month program, geared towards rapidly growing an early stage startup’s business in a short period of time (typically 90 to 120 days). The goal is to generate roughly one year’s worth of growth within the span of a single quarter of operations. This is a huge value add for an early stage founder, as it de-risks the business during a particularly vulnerable time, while also providing a very apparent path and network to build on. The addition of strategic capital and expertise is of significant value. In fact, accelerator backed startups are typically 3X to 4X more likely to succeed than their non-accelerated peers.
Within the accelerator we create customized goals for each company. Acceleration revolves around Revenue, Sales, Product, Hiring/Firing, and Operations. On top of helping founders achieve their goals in each of these areas, we focus on making strategic introductions to key investors and/or potential enterprise customers. The benefit of having a variety of industries in our program is that we are able to build new relationships that cross pollinate across market verticals - pulling in untapped areas of expertise, unrecognized technical advancements and isolated disruptive approaches that have tremendous value when applied in new ways in new markets. Most of our teams see tremendous increases in terms of both revenues and valuations during the 3-month acceleration process.
How Does it Work?
Unlike traditional Private Equity and Venture Capital, we benefit greatly from the added value of two unique income channels - tuition and corporate sponsorships. Corporate sponsors provide hundreds of thousands of dollars of free goods and services to our teams, while also providing sponsorship dollars to offset the cost of our operations. In addition, teams pay a fee to participate in the accelerator (typically $20K to $35K). These fees offset the cost of office space, event marketing, speakers, and personnel. These fees are typically paid out of the investment. As an example, on a $150K investment, we would deploy $150K in exchange for equity and the company would tender back to us $30K to participate in the accelerator. The fees are more than offset by the gains most teams experience through acceleration.