It’s hard to juggle creative freelance work with managing the back-office tasks that support it—like accounting and completing legal documents.
Collective, a startup that caters to “creators and builders” in one-person businesses, is building an all-in-one platform for services like these. “You have to do a bunch of things you didn’t do as an employee,” says Hooman Radfar, CEO of the San Francisco-based startup, who co-founded it with CPO Ugur Kaner and CTO Bugra Akcay, both serial entrepreneurs.
Business registrations in the U.S. have been skyrocketing since the pandemic. There were 500,219 applications in May 2019, according to the U.S. Census Bureau—up from 296,594 the same month last year. With more employers calling workers back into the office, but many workers still preferring the work-from-home lifestyle that COVID-19 ushered in, this trend is likely to continue.
Investors are paying attention. Collective, launched in September 2020, raised a $20 million Series A round of funding last month, with backers including Ashton Kutcher and Guy Oseary’s venture capital fund Sound Ventures. It has raised a total of $28.65 million, including an earlier seed round.
Investors in Collective include a number of high-profile entrepreneurs active in the “passion” and gig economies, among them Steve Chen (Founder YouTube), Hamish McKenzie (Founder Substack), Aaron Levie (founder Box), Kevin Lin (founder Twitch), Sam Yam (founder Patreon), Li Jin (Atelier Ventures), Shadiah Sigala (founder HoneyBook), Adrian Aoun (founder Forward), Holly Liu (founder Kabam), Andrew Dudum (founder Hims) and Edward Hartman (founder LegalZoom). The venture firm General Catalyst joined the round.
"We're proud to be supporting a company that's making it easier for creators to focus on what they do best by taking care of the back-office work that creates so much friction for so many early entrepreneurs,” said Ashton Kutcher, co-founder of Sound Ventures, in a statement. “I would have loved something like this when I was getting started, so our team is excited to back this vision for all the future creators out there."
Collective plans to offer financial services customized to the self-employed market and a network of trusted advisors with expertise in accounting, bookkeeping, tax and business formation.
“Collective is serving the $1.2 trillion business-of-one industry by building the first back-office platform that saves individuals significant time and money, while providing them with the appropriate tools and resources they need to help them succeed,” said Niko Bonatsos, Managing Director of General Catalyst, in a statement. “We’re excited to support Collective as they expand their team and build an exceptional service for the business-of-one community.”
So far, the startup has gotten a strong response from the marketplace. When I spoke with Radfar in May, 20,000 people had been wait listed for membership.
In the future, Radfar says Collective hopes to explore options for offering healthcare and benefits. Both can be expensive for the self-employed, and it is hard to purchase the same-quality benefits as employees of companies that can buy as a large group. “It’s around the corner for us,” says Radfar.
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