Investment crowdfunding platform NextSeed has merged with Collaboration Capital in a move to create a leading “technology-driven impact investment firm open to everyone.” In effect, the NextSeed merger with Collaboration creates a Fintech forward digital investment bank providing access to capital and access to opportunity for a broad-based investor base.
NextSeed, a FINRA regulated funding portal that recently received its broker-dealer license, has long been a leader in providing debt-based capital to small businesses while providing access to an interesting asset class to smaller investors. Collaboration Capital is an SEC-registered investment advisor. According to the company’s LinkedIn page, Collaboration is an advisor to “forward-looking families” focusing on the ESG and impact investing sector.
The strategic merger expects to further expand the combine companies mission to “democratize finance.”
Both companies are based in Houston, Texas. NextSeed CEO and co-founder Youngro Lee will remain the CEO of NextSeed while becoming the CEO of the combined entity.
Lee, who previously specialized in international private equity at global law firms Cleary Gottlieb and Kirkland & Ellis, currently serves on the SEC Small Business Capital Formation Advisory Committee and also serves as the founding President of the Association of Online Investment
Christopher Knapp, the founder and CEO of Collaboration, will remain as CEO of the firm.
Knapp previously co-founded and served as CEO of Chilton Capital Management after a long career at Brown Brothers Harriman & Co. He launched Collaboration Capital to build a new type of investment firm focused on impact/ESG investing for its clients.
Collaboration seeks to leverage traditional fundamental securities analysis that incorporates select ESG considerations to reduce the overall risk to investment portfolios, while developing portfolios consisting of companies that exhibit sustainable business practices.
According to a note from Nextseed, the combined firm also plans to launch a new asset management division to focus on:
(1) proprietary public ESG (environmental, social, governance) investment strategies developed by Collaboration Capital
(2) city-focused private investment funds concentrating in community-driven real estate, startups
and growth-oriented small businesses in select US metro areas.
While NextSeed has always catered to both accredited and non-accredited investors, the addition of the broker-dealer license has helped the platform to expand in other areas of the private markets.
Lee commented on the merger news stating he has spent the last few years tirelessly building the technology and infrastructure to empower small, local investments at scale while navigating the complex regulatory requirements to ensure compliance.
“Our mission at NextSeed has been to connect businesses and individuals to build vibrant communities,” said Lee. “Now, by combining with a respected investment adviser such as Collaboration Capital that also believes in the power of the capital markets to affect positive change, we are beyond excited to create an entirely new type of investment firm that is strategically positioned to serve the investors and entrepreneurs of the future.”
Knapp explained that a founding tenet of their investment advisory practice at Collaboration is combining what they call the old and the new.
“For us the old – a term we use with the greatest of respect – is an emphasis on critical thought, primary research, fundamental security analysis, and taking the long view. The new is embracing change opportunistically and to invest diligently in where the world is going. Our combination with NextSeed marks a significant step forward in our longstanding commitment to democratize access to capital and opportunity. Significantly, it also facilitates our ability as advisors to deliver client portfolios that combine intensely global and hyper-local mandates.”