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Alumni Ventures Performance and Affinity Networks: Creating Positive Returns through Community

Tuesday, 31 January 2023 09:00 AM

MANCHESTER, NH / ACCESSWIRE / January 31, 2023 / Alumni Ventures is a venture capital firm offering professional-grade venture portfolios to individual investors.

In just eight years, Alumni Ventures has grown from a single-fund startup into the world's third most active venture firm, according to Pitchbook. During this time, Alumni Ventures achieved two critical milestones: raising more than $1 billion from individual accredited investors, and investing in 1,000+ companies. These achievements reflect the success of Alumni Ventures's disruptive business model, which leverages a robust network of individuals to democratize access to venture capital for individual investors and entrepreneurs. Alumni Ventures's unique base of accredited investors and low-commitment minimums, as little as $10,000 for a portfolio of diverse companies, stands in stark contrast to that of conventional VC firms that raise capital almost exclusively from institutional investors and ultra-high-net-worth individuals.

With Alumni Ventures, performance and opportunity are found through community.

The key element of Alumni Ventures' business model is their eighteen alumni funds located at leading universities known for their entrepreneurial activity. The Alumni Ventures community consists of more than 600,000 members, with 24 alumni funds at top undergraduate and MBA programs, including all eight Ivy-league colleges and universities and other notable institutions such as MIT, Duke, Stanford, and the University of Michigan. This robust and powerful network allows Alumni Ventures to be in communities where startups and entrepreneurs are emerging. They also give the firm the advantage of approaching them as fellow alumni to build relationships and gain access to investment opportunities when they are seeking capital.

This vast network of connections is crucial to creating unique access to diverse opportunities. The community and relationships formed within the 18 funds have allowed access to deals that would otherwise prove difficult to access, and Alumni Ventures can then make these opportunities available for funds across their network.

The firm builds stronger portfolios by casting a broader net. Tapping into a larger network and including other funds allows Alumni Ventures to see more deals and create better and more diverse combinations for portfolios across industries, locations, and stages of investment. It is critical to have this level of diversification in an asset class like venture capital because companies at different stages, industries, and geographies may grow and succeed at different rates. By having full and broad exposure to all the venture capital-backed industries for their investors, Alumni Ventures believes it provides an appropriate balance of risk and reward in entering the venture capital market.

Alumni Ventures returns are found through diligent community vetting.

Alumni Ventures takes a thorough approach to evaluating potential investments brought in through affinity networks. The company employs over 50 full-time and experienced venture investors. The team first speaks to the CEO and management team to get a feel for who they are, their background, and the conviction of their motivations. They also review all company materials and look at what other experienced investors have identified as strong points and potential challenges.

The team then constructs detailed and robust diligence materials and uses the wisdom of small crowds for peer review, where different members of the Alumni Ventures team lend their experience and critical eye. Alumni Ventures also taps into their network of experts to create investment committees, with each member bringing unique knowledge and experience to help evaluate new opportunities. The Alumni Ventures scorecard consists of standard considerations such as the startup team's composition, the unique and promising intellectual property, and the experience of the founders. The company has developed its own proprietary database of thousands of scorecards, leading to improved ability to evaluate potential investments.

Alumni Ventures differentiates themselves by additionally evaluating how each company helps diversify fund portfolios through the lens of stage, sector, and geography, and by following lead investors. The team takes special note of who the lead investor is, their experience, their success rates, their decision-making process, and what they inject into the company to push it from a company with the potential to a fully realized success.

Alumni Ventures is looking to grow their community.

As Alumni Ventures looks to continue its success, the company has launched several new initiatives to further develop its robust community:

  • In 2022, the company launched the Diamond Club, which acknowledges and supports the firm's biggest investors, by offering a unique set of products and services to investors who have invested $750,000 or more with Alumni Ventures.
  • Alumni Ventures also created AV Labs, a division to contain and create new business units or ventures that could generate additional value for stakeholders.
  • Working to build a presence in every corner of the entrepreneurial space, Alumni Ventures also established the Super-Angels Partner Program, with the aim of developing a network of angel partners with whom they can co-invest as they work towards being the world's preeminent pre-seed and seed investor. This program is already off to a strong start, with deals already signed and more expected in 2023.
  • Finally, Alumni Ventures is planning to add 10-20 more alumni community-oriented funds over the coming two years, which will help in community building and fundraising, while providing value to those communities and investors.

The community, process, and diligence cultivated by Alumni Ventures have directly led to the positive returns for the company and its investors. These new initiatives will help Alumni Ventures continue to grow and scale its business, while also providing more opportunities for individual investors to access venture capital.

About Alumni Ventures

Alumni Ventures offers accredited individuals access to network-powered venture capital - a key asset class missing from the portfolios of many sophisticated investors.


Andrew Mitchell
[email protected]

SOURCE: Alumni Ventures

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