Alumni Ventures Wins Best Alternative Investment Platform In Benzinga's Global Fintech Awards

Benzinga’s Global Fintech Awards crowned Alumni Ventures Group the Best Platform for Alternative Investment in 2021.

Alumni Ventures is a network-powered venture capital firm helping accredited individuals become successful venture investors. With over $900M total funds raised and more than 900 portfolio companies, Alumni Ventures is one of the most active venture investors in the U.S. and world (Pitchbook 2021 Global League Tables).

Alumni Ventures was founded in 2014 by CEO Mike Collins, who wanted to expand access to lucrative venture investing beyond just institutional investors and the ultra-wealthy. “It was my experience and frustration as a private investor that led me to start Alumni Ventures with a goal to bring smart, simple venture investing to individuals and family offices,” said Collins.

By adopting a “smart and simple” venture investing model, Alumni Ventures has built a network of over 600,000 community members, investors, and subscribers. This network, which Collins calls Alumni Ventures’ “secret sauce,” provides access to exciting new venture investment opportunities and adds value to Alumni Ventures’ portfolio companies. Said Collins, “Simply put, by working together, we create more value than any of us could create alone.”

Why Venture Capital?

The case for venture capital is simple and compelling. Companies are staying private (i.e., pre-IPO) longer, spending more time building value before the Wall Street bell rings. These days, it’s not uncommon for companies to go public with valuations in the billions, with the majority of that value creation taking place in the private “hyper-growth” stage. If you don’t get in early, you can miss out on huge growth.

More early-stage, high-growth companies mean more opportunities to get in on potentially valuable pre-IPO investments. For example, early investors in tech companies like Zoom and Snowflake saw a 6000x and 3000x-9000x return on their initial investments, respectively[1]. While these types of returns are unusual and investing in startups brings risks, diversification can help.  The Alumni Ventures investment Freshly, a leader in the prepared meals space that launched in 2015 was acquired by Nestlé for $950 million, with another $550 million in possible earnouts[2].

*Cambridge Associates data

So, while the case for venture is compelling, it’s still missing from many sophisticated investors’ portfolios. Why?

One reason is the popular misconception that professional venture investing is only available to ultra-high-net-worth individuals. For decades, only storied venture firms like Andreessen Horowitz and Sequoia Capital (and their ultra-wealthy clients) have had access to the most sought-after startups and high-growth private investment opportunities. For individual investors, angel investing and equity crowdfunding were the only way to access startup investing. Unfortunately, the deal quality available in these channels rarely matches that seen in true venture capital.

Now, however, professional venture capital is an asset class any individual accredited investor can own.

How to Get into Venture Investing

The keys to smart venture investing are investment quality and investment volume. Individual investors need to hook up with a firm that can access the most sought-after opportunities and provide them with a robust, diversified portfolio. Don’t go it alone. Likely you aren’t an expert in due diligence and portfolio construction. Leave that to the professionals. This is where Alumni Ventures can help.

Since 2015, Alumni Ventures has been democratizing access to professional venture capital investing. They build funds designed for individual investors, but that are comprised of investments also being made by the well-known VCs on behalf of their institutional investors and the ultra-wealthy. With over two dozen funds offered annually, it’s easy to find an Alumni Ventures fund that matches your wealth-building strategy.  Examples are the Total Access Fund (investing broadly in the VC asset class) and stage/sector-specific funds like the Seed Fund, Deep Tech Fund, Healthtech Fund, Blockchain Fund, and more.

Their venture capital professionals source the investments and conduct due diligence to provide investors with a diversified venture portfolio. For investors, the process is simple; choose the fund that resonates with your interest and goals, and write a single check to the fund (you can even use funds in a qualified retirement account). Alumni Ventures’ team of 50+ professional VCs will do the rest.

For more information on Alumni Ventures, click here.

[1] https://elementzventures.com/why-venture-capital-and-why-now/

[2] https://www.av.vc/blog/freshly-acquired-by-nestle

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Benzinga’s Global Fintech Awards crowned Alumni Ventures Group the Best Platform for Alternative Investment in 2021.

As a network-powered venture capital group, Alumni Ventures gives individuals access to more than 800 companies and has raised over $800 million. Boasting 150 full-time employees and a community of more than 600,000 supporters, Alumni Ventures receives $250 million to $300 million annually from investors looking to invest in early-stage companies through its funds. 

“It was my experience and frustration as a private investor that led me to start Alumni Ventures with a goal to bring smart, simple venture investing to individual and family offices,” CEO Mike Collins said. 

Technological advancements have greatly widened the alternative investment basket, placing newbies like non-fungible tokens (NFTs) and cryptocurrencies alongside old timers like art and real estate. Alumni Venture’s “smart and simple” approach allows the company to focus on well-known, well-studied and time-proven investment vehicles. These are private, early-stage companies. 

But startups are not the only medium into the alternative investment landscape. CrowdStreet, for example, offers investors equity in various real estate investments around the country. Masterworks allows investors to own shares of famous works of art, and Vinovest makes investing in wine easily accessible. 

So what, then, makes you want to own venture capital? 

The Pros of Venture Capitalism as an Alternative Investment

The most common argument for alternative investments is diversification. 

Alternative investments are typically poor correlates to traditional asset classes like stocks and bonds so they serve as safety nets when the markets are unhealthy or in decline. As a class of alternative investments, venture capitalists share this trait and add high rates of return. 

According to a study by Cambridge Associates, one of the world’s leading investment firms, periodic returns from its venture capital group have beaten top market indices over a 20-year, 10-year and three-year period. The data shows that the difference compounds over time. The 20-year returns of the venture capital group yielded a periodic rate of return of 76% compared to the S&P 500’s less than 10%. Given these findings, Cambridge Associates suggests institutional investors put 15% or more of their portfolios in early-stage private companies with high-growth potential. 

Finally, investing in early-stage companies provides investors with an opportunity to enter when the valuation of a company is attractive and the upside potential is high. Of course, the risk is always higher for early-stage companies, but just think of what catching the next Microsoft Corp. MSFT, Netflix Inc. NFLX or Airbnb Inc. ABNB would’ve meant for the early investor. 

Alumni Ventures: Offerings and Differentiators

As the name suggests, Alumni Ventures began with alumni-based venture funds. 

The company’s Alumni Funds, which now amount to 18, remain its core offering. With a focus on catering to graduate students and friends associated with a particular school, Alumni grants investors access to 20 to 30 company portfolios diversified by sector, geography and stage. Perhaps more importantly, it creates communities where investment ideas can grow and friendships can prosper.

Alumni’s Total Access Fund invests in every new venture investment done during the quarter or over the year. Alumni Ventures offers quarterly and annual vintages for investors with the minimum investment for its funds ranging from $50,000 to $200,000. 

For investors with interests in specific fields, Alumni offers Focused Funds. A $25,000 minimum investment in this fund, for example, can grant the investor access to companies focused on blockchain, artificial intelligence or deep learning. 

All Alumni funds require a minimum 10-year hold, and profits are paid in an 80-20 split. In addition to its multiple offerings, Alumni differentiates itself by being value-added co-investors. The vast Alumni network provides investors with a long stream through which to source capital, build important connections and troubleshoot key issues. 

“[We are] like a good aunt or uncle for entrepreneurs. By that, I mean we don’t hassle our busy CEOs, but we work very hard to help when a portfolio company reaches out,” Collins said.

This kind of culture has won Alumni Pitch Book’s Most Active Investor In Early Stage Investing in 2020 and landed it a spot in the Top 10 Most Active Investors in Late-Stage investing. 

For more information on Alumni Ventures, click here. 

Photo by Austin Distel on Unsplash