Q&A with the Alumni Ventures Executive Team

The world and markets have been shaky. How is that impacting the venture space and your outlook on it?

Mike Collins: What is taking place in the Ukraine is an enormous tragedy. As a company, we have friends and family directly impacted. As a human, I’m upset and angry.

Markets are also unsettled. However, I do bring some perspective to the situation that perhaps younger VCs lack. I was around in ’87 when folks thought we were at the start of the Great Depression 2.0 — as well as for 9/11, the dot.com bubble, and recently a global pandemic. Over the last 40 years, I’ve seen capitalism and innovation not only survive but thrive. And venture capital is by its very nature a longer-term investment allocation.

Bottom line: Our job is to back great entrepreneurs solving important and lucrative problems. We’ll keep our eyes on that.

Anton Simunovic: I echo Mike’s sentiments. I’ll add that with the necessary but liberal printing of money over the last few years, inflation was fairly predictable. We’ve also seen venture prices — and the size and frequency of venture rounds — rise for some time now, and I think a correction was overdue.

I’m actually quite pleased with how markets have responded so far — rational repricing without panic. For the first time in more than a decade, venture seems to be entering a buyer’s market. Our investors are smart and get that; as a result, we’ve had strong growth year over year.

What hasn’t changed is the impact the pandemic has had on the adoption of technology. There is now widespread appreciation that the world is driven by technology and innovation. This cannot be understated.

Alumni Ventures has a history of innovating and growing the business. Where are you training your focus on now?

Anton: I’ll speak to the investing side of the house. Our push is to continue to be a full-stack investor, writing larger checks under the same investment strategy that we presently pursue. It starts at pre-seed and seed, where AV strives to be world class. We then activate our portfolio services team to earn the right to put more capital to work over multiple rounds in those companies that are really distinguishing themselves. As a co-investor, it’s critical we deliver tangible value to our portfolio companies through our enormous community. We often iterate on our programs and initiatives to scale alongside our portfolio.

Colin Van Ostern: There’s a lot in the works, but I’ll focus on just three initiatives. First, we’re refining our exit processes and our communications to investors — critical for us as our portfolio matures. In 2021, we returned nearly 8x the capital to investors as the prior year. Second, we’re planning to make it easier for folks to re-invest their money with us in future funds after we send them returns from their investments. Finally, only a small fraction of accredited investors know or understand us. We plan to tell our story more broadly and fully.

Earlier this year, AV shared an update with its investors that the firm reached an agreement with regulators about a couple of issues occurring during AV’s earlier years of bringing individual accredited investors into venture capital. What are your takeaways from that experience?

Mike: I think there are three pertinent points. First, this was primarily a marketing disclosure issue from our early years, and all marketing materials were updated more than two years ago when regulators first reached out to AV. Second, AV is compliant within the SEC framework and has been for years. Finally, AV is an innovator and disruptor. We’re the third most active VC on the planet last year, closing in on 1000 investments and on a path to soon cross the milestone of $1B of funds raised. Disruptive companies like AV — especially ones in the financial space — need to cooperate with regulatory agencies, work through things, and move on. That comes with the territory.

Colin: We are incredibly proud of what our company has achieved. Alumni Ventures has made venture capital accessible to almost 8,000 investors. We’ve also been an on-ramp for hundreds of young professionals, many from diverse backgrounds. And we’ve funded hundreds of portfolio companies that are working to change the world for the better. We are laser-focused on that meaningful, worthwhile work.

Mike, you’re a founder who’s still a very hands-on CEO. How has your job changed?

Mike: Some things remain the same. I continue to determine direction and priorities. I also set the tone for culture and tempo.

But my job has changed. We now have a full team of talented, dedicated investing professionals and executives. My role is increasingly to collaborate and mentor them, letting them do their thing. It’s more like I conduct an orchestra, where I used to front a garage band. I also don’t get into the nitty gritty of deals much anymore — although I still enjoy reading up on every investment and helping our portfolio companies when I can.

I’d say my most important function is to do what I’ve always done: Keep inspiring and focusing our team’s energies in experimenting, learning, and evolving. My superpower is innovation, and I plan to continue to use that strategically whenever we need to figure out a new or better way of doing things.

Finally, where do you see Alumni Ventures in 5 years?

Mike: I think a lot about where we want to be in 5 or 10 years. By then, I think we have chance to be one of the most impactful and valuable VC firms on the planet. We have a number of innovative programs, processes, and products on tap to help get us there. Bringing the power of network effects to a market is a big deal. In VC, networks will beat individuals every time. And this platform is tremendously powerful, with plenty of off-balance sheet assets and flywheels. Of course there is A LOT of work and execution needed to get us to where I believe we can go, but it feels very doable.

Anton: I’ve been here three years, and Mike is one of the most innovative thinkers I’ve ever met. Moreover, he has tremendous capacity to work, to see around corners, and to make bold decisions. We’re tinkering with a lot of things in our “lab” — an AV wallet, an app, leveraging proprietary data and AI, an expert community, even incubating some businesses that AV will likely spin out. I see us writing bigger and bigger checks. Acquisitions and JVs are also on the table. I’d say we’re just entering our third inning, with perhaps our most exciting chapters still ahead.

Disclosure: Although forward-looking statements contained in this presentation are based upon what management of the Alumni Ventures believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.