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The Catalyst Fund

An investment fund for startups in the SVP program

An early stage venture fund led by the Alliance for SoCal Innovation and managed by the co-general partner, Pasadena Private Financial Group (PPFG).

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About the Catalyst Fund

The Catalyst Fund invests in SoCal-based founders who have been accepted into the Alliance’s SoCal Venture Pipeline program AND secured a term sheet from a lead investor who prices the round (minimum of $1m of new capital), sets the terms, and is a definitive lead investor (providing at least 20% new capital). Upon acceptance into the SVP program, founders agree to provide the Catalyst Fund the right to co-invest in their round (target 10% of the full round, but no larger than $500k) on the same terms as their lead investor.

Catalyst Fund FAQ

What is the Catalyst Fund?

The Catalyst Fund is a venture fund led by the Alliance for SoCal Innovation and managed by the co-General Partner, Pasadena Private Financial Group (PPFG). The fund exclusively invests in companies already accepted into the SoCal Venture Pipeline program who are raising their first institutional check at the seed or series A level.

May I receive investment from the Catalyst Fund if I’m not accepted into the SoCal Venture Pipeline?

No. The Catalyst Fund only invests in companies accepted into the SoCal Venture Pipeline program. If you would like to be considered for investment from the Alliance’s Catalyst Fund, check out the SoCal Venture Pipeline program. If you applied in the past and were not accepted, we would be happy to look at your updated application if you have reached key milestones since your last submission. Please reach out to the Alliance staff member you were last in contact with.

Why did the Alliance raise the Catalyst Fund?

The Catalyst Fund was conceived to further support the mission of the SoCal Venture Pipeline program to help founders break into their first institutional capital rounds, which tends to be a major stumbling block for startups seeking to scale. This is especially true for first time founders, women, and people of color, who tend to have a harder time raising venture capital. 

How does the Catalyst Fund decide which companies to invest in?

Upon acceptance into the SoCal Venture Pipeline program (SVP), you agree to provide the Catalyst Fund the right to co-invest in your round (target 10% of the full round, but no larger than $500k) on the same terms as your lead investor. This agreement is provided as part of the formal on-boarding process post acceptance into SVP.

Once accepted into SVP, when is my company eligible for an investment consideration?

The Catalyst Fund will consider investing in a company after a Lead Investor (investing at least 20% of the round) is committed. When a term sheet is secured with the Lead Investor, the fund’s Investment Committee will review the term sheet and contact the Lead Investor to better understand the deal and due diligence conducted. Other factors will be considered before an investment is made. The other factors include, but not limited to, a round that has not expired, is at least $1M but not more than $5-10M, and is a raise around equity. 

Does the Catalyst Fund lead investment deals? Why or why not?

No. The Catalyst Fund only invests behind an institutional lead investor. The Catalyst Fund General Partners do not lead investments because, first and foremost, we are champions and cheerleaders of and for founders. We want to be on the side of the founders, rather than on the other side of the table negotiating investment terms. Second, as a generalist fund seeking to support great SoCal founders from a broad variety of sub-industries, we do not have deep technical knowledge in all the technology areas we seek to invest in. We depend on other investors to do that deeper technical diligence.

What kind of investment terms might I see from the Catalyst Fund as a co-investor?

The Lead Investor sets the key terms for the round, including valuation, equity, etc. The Catalyst Fund will accept the terms set by a reputable Lead Investor and join the round targeting 10% percent of the new equity raise. 

If the Catalyst Fund makes an initial Seed or Series A investment, will they invest in a later round?

No, The Catalyst Fund will not invest in subsequent rounds. Our mission is first and foremost to create opportunities for founders and we believe that opportunity is greatest in extending founder access to their first institutional check. We have decided to invest in as many founders breaking into VC, rather than doubling down on those founders who have already broken in. Individual Limited Partners of the Catalyst Fund may separately decide to invest in follow-on rounds on behalf of the Fund, but those will be handled on a one off basis. 

What other additional support may I receive as a founder who receives investment from the Catalyst Fund?

The Alliance for SoCal Innovation, as an ecosystem catalyst organization, will continue to promote and support founders through its broad and rich network of individuals, universities, corporations, community support organizations, and investors. The Catalyst Fund, a separate legal entity, will be an investment partner to the founder and seek to provide guidance and assistance whenever possible. 

What other key pieces of information will the Catalyst Fund need to know before investing?

The Fund’s Investment Committee needs the following information before proceeding with an investment:

  • Investment Period:
    • Has the investment period expired (i.e., is it still a fresh round)? (Y/N)
  • Lead Investor:
    • Has a qualified institutional investor led 20% or more of the total round size?
    • Which investor has contributed at least 20% or more of the total round size?
    • How much has the lead investor contributed (i.e., the largest contribution)?
  • Investment Details:
    • What is the total investment size of the round?
    • Is the round at least $1M in total? (Y/N)
    • How much does 10% of the round equal?
    • Is 10% of the round more than $100k but less than $500k?
  • Investment Exclusions (does the investment include any of the following?)
    • Real estate
    • Oil, coal, or natural gas
    • Production or sale of modern weaponry (e.g., firearms)
    • Gambling casinos or similar venues
    • Production or sale of pornography
  • Round Type:
    • Is this an equity round?
    • What is the conversion discount rate?
    • What is the valuation cap?
    • Is this a debt round with a convertible note?
    • What is the accrued interest rate?
    • When is the maturity date?

What is the SoCal Venture Pipeline?

The SoCal Venture Pipeline is a program developed by The Alliance for SoCal Innovation designed to assist founders in Southern California in accessing institutional capital. We facilitate strategic introductions to VCs suited for Seed and Series A funding.

Who is eligible to apply?

Founders based in Southern California who are preparing to raise their first round of institutional Seed or Series A funding within the next 6 to 12 months are eligible. We cater to various tech industry verticals.

What are the criteria for a startup to be considered ready for Seed or Series A funding?

Key indicators include a minimum raised through angel funding, product market presence, customer traction, a dedicated team, and a scalable business model. Specific requirements vary for Seed and Series A stages. Check out our full FAQ page for more detailed criteria

Is there a cost to apply?

No, there is no cost to apply. The SVP program is supported by generous sponsors, a federal grant and a transfer from our general fund to cover the operational expenses of the program. The Catalyst Fund, over time, will generate management fees that will close the remaining gap of operating this program. Given the tight linkage between the SVP program and the Catalyst Fund, accepted companies will be required to offer the Fund co-investment opportunities when they secure a qualified lead investor.

The SoCal Venture Pipeline is able to keep operating expenses lean, in part, by relying on local ecosystem leaders who volunteer their time to help great companies access funding. Our community leaders and committees work closely with founders and know what it takes to get VC funding.

How does the SVP selection process work?

Applications are first reviewed by Alliance staff, followed by evaluation and feedback from our community. The final decision is made by our Selection Committee, which meets monthly.

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