The problem wasn't with collectstatic itself. I was using the -l flag which creates symbolic links of the static files.
The actual problem is that virtualbox 4.1.18 disallows creating symlinks on the host computer.
I found the answer on serverfault here. For more info, see this virtualbox ticket
I am reposting the solution here, for quick reference.
Run the following command on your host:
VBoxManage setextradata VM_NAME VBoxInternal2/SharedFoldersEnableSymlinksCreate/SHARE_NAME 1
Or on Windows
VBoxManage.exe setextradata VM_NAME VBoxInternal2/SharedFoldersEnableSymlinksCreate/SHARE_NAME 1
where VM_NAME is the name of your virtual machine (e.g Ubuntu) and SHARE_NAME the name of your shared directory (without the "sf_" prefix).
This will re-enable the previous symlink friendly behavior.
I had to reboot after doing this and then symlinking on shared folder worked!