5 Things To Make Sure You Know About Venture Capital and Alumni Ventures

5 Most Important Things to Know

1. Venture capital has historically been a strong-performing asset class, and the data shows that now is an excellent time to be deploying capital. Read More »
2. Alumni Ventures is an award-winning, top-quartile venture firm with a proven 10-year track record. Read More »
3. Venture capital is a long-term diversification strategy, and investors who make annual commitments can do very well. Read More »
4. An astonishing value proposition: professional-grade venture portfolios for as little as $25,000. Read More »
5. Alumni Ventures offers a robust Loyalty Rewards program which provides fee reductions to our most loyal investors, and those who fund earlier in our fundraises. Read More »

1. Venture capital has historically been a strong-performing asset class, and the data shows that now is an excellent time to be deploying capital.

Venture capital has outperformed public market equivalents in the 3-, 5-, 15-, and 25-year periods ending September 30, 2023.¹

Alumni Ventures doesn’t believe in market timing or emotion-driven investing. We do believe in steady, consistent investing in diverse assets — including venture — over time.

U.S. VC Index Returns vs. Public Market Equivalents¹

Years Ended September 30, 2023

The data shows that 2024 is an excellent time to be deploying capital into the venture markets. PitchBook and the National Venture Capital Association found that we’re experiencing the most investor-friendly environment of the last decade.

Most Investor-Friendly Environment of Last Decade²

U.S. VC Dealmaking Indicator by Quarter

During turbulent markets, VCs typically have access to a broader range of opportunities at more favorable valuations. Many companies are thriving right now and there are many more that will get their start during this period.

Alumni Ventures is well-positioned to build professional-grade venture capital portfolios. AV’s ~40 full-time investing professionals leverage their alumni connections, personal networks, and our 600k+ member community to build a robust deal pipeline for our firm. We evaluate hundreds of investment opportunities every year, ultimately investing in ~200-250. We’ve backed 1,200+ unique portfolio companies to date.

Alumni Ventures is the #1 most active venture firm in the U.S., and the #3 most active in the world, according to PitchBook’s 2023 rankings.³

See below to learn more about our distinguished model and track record.

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¹Pooled horizon return, net of fees, expenses, and carried interest.; U.S. Venture Capital Index – CA Modified Public Market Equivalent (mPME) replicates private investment performance under public market conditions. The public index’s shares are purchased and sold according to the private fund cash flow schedule, with distributions calculated in the same proportion as the private fund, and mPME NAV is a function of mPME cash flows and public index returns. “Value-Add” shows (in basis points) the difference between the actual private investment return and the mPME calculated return. Refer to Methodology page for details.; Constructed Index: MSCI World – Constructed Index: MSCI World/MSCI All Country World Index: Data from 1/1/1986 to 12/31/1987 represented by MSCI index gross total return. Data from 1/1/1988 to present represented by MSCI ACWI gross total return.

²PitchBook-NVCA, “Venture Monitor Q2 2023,” July 12, 2023

³Jordan Rubio, “Global League Tables: 2023 Annual,” PitchBook, February 23, 2024

2. Alumni Ventures is an award-winning, top-quartile venture firm with a proven 10-year track record.

Alumni Ventures offers accredited individuals access to professional-grade venture capital — a key asset class missing from the portfolios of just about every individual investor.

According to PitchBook’s 2023 Global League Tables, AV is #1 most active venture firm in the U.S., and #3 most active in the world,¹ and we are America’s Largest Venture Firm for Individual Investors.² We have been recognized by Fast Company as one of America’s Most Innovative Companies.

In addition to these accolades recognizing our size, deal flow, and activity, we’re proud that our investment strategy is working and has proven itself over a decade.

Investors can be confident our investment strategy can deliver strong returns while also diversifying their overall investment portfolio.

See below to learn why many AV investors have invested in multiple funds and/or annual vintages.

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¹Jordan Rubio, “Global League Tables: 2023 Annual,” PitchBook, February 23, 2024

²Largest VC for individual investors in the U.S. based on the combination of total capital raised, number of investments, and number of investors of leading VC firms as reported by PitchBook and other publicly available information reviewed by AV.

*IMPORTANT DISCLOSURES: Historical Performance Compared to Public Markets and Industry Benchmarks

1. Internal Rate of Return (IRR) for AV Funds is net of management fees and incentive allocations applied to amounts distributed to investors, and gross of incentive allocations applicable to unrealized gains on investments held by AV Funds. IRR for AV Funds includes uninvested cash, unrealized investments, and amounts distributed to investors. The IRR shown for the Russell 2000 indices are gross of fees because indices are not managed investments, and it is not possible to invest directly in an index. For additional information see av-funds.com/disclosures. All investment involves risk, including risk of loss. Past performance is not necessarily indicative of future results. For more information on AV Funds’ investment returns, please see here.

2. Performance data is from Cambridge Associates Venture Benchmarks and is as of 9/30/2023. Industry Top Quartile as determined by Cambridge Associates. Distributions to Paid-In Capital (DPI) for AV Funds and Industry Top Quartile is net of management fees and net of incentive allocations applied to amounts distributed to investors. For additional information on Cambridge Associates and the data and calculations see av-funds.com/disclosures.

3.AV’s 2016 vintage has a DPI of .72, and Top Quartile is .73.

3. Venture capital is a long-term diversification strategy, and investors who make annual commitments can do very well.

Our investors are attracted to venture for a multitude of reasons:

1. There is a higher ratio of value creation in the private markets vs. public markets than ever before.

More Value Is Being Created Before the Public Markets¹

2. Venture capital is largely uncorrelated to the public markets, making it an ideal diversification tool.

VC Is Largely Uncorrelated to Public Markets²

3. With a long-term view and compounding, venture investing can potentially become a self-funding investment.

Different vintages may have different return profiles, and it’s wise to diversify across time in your venture capital allocation planning. But staying the course with an annual commitment can eventually lend itself to a self-replenishing pool of capital that can compound over time.

A simple example:

• Investor commits $100k per year for five years.
• By the sixth year, the investor is starting to see meaningful returns from the investment in year one.³
• Through annual commitments and reinvesting returns, an investor can potentially grow an investment pool quite substantially over a period of 10, 15, 20 years.

See below to learn how you can invest with Alumni Ventures at an accessible minimum.

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¹Anna Zakrzewski et al., “The Future is Private: Unlocking the Art of Private Equity in Wealth Management,” BCG, March 2022

²Invesco, “The Case for Venture Capital,” Invesco White Paper Series, accessed January 11, 2022

³Venture capital investments generally accrue unrealized gains that cannot be used to fund additional investments until realization events, which may take additional years to occur.

4. An astonishing value proposition: professional-grade venture portfolios for as little as $25,000.

Alumni Ventures was founded with the mission of providing professional-grade venture portfolios to accredited investors — a product offering that had historically only been available to institutional investors and ultra-high-net-worth individuals capable of writing checks in excess of $10 million at a time.

With Alumni Ventures, for as little as $25,000, accredited investors can have a large, diversified portfolio of venture capital investments. Our offerings include:

• Alumni Funds: $25K; Invest alongside your classmates from 30+ schools in alumni-connected startups. Portfolio of ~20-30 companies. Learn More »
• Total Access Fund: $25K; Our broadest, most diversified fund, featuring every new AV investment over the Total Access Fund’s vintage. Portfolio of ~50-75 companies. Learn More »
• Focused Funds: Minimums start at $25K; Thematic investment strategies, including AI, Deep Tech, Seed Stage, Sports, HealthTech, and more. Portfolio of ~20-30 companies. Learn More »

Our Simple, 3-Step Onboarding Process

In addition to receiving a fascinating portfolio of venture-backed companies, Alumni Ventures also takes care of all fund administrative services, reporting, and tax documentation. There are also ample opportunities for investors to engage with our funds, investors, entrepreneurs, and other community stakeholders. This is truly a community that is bound by curiosity and a passion for innovation.

Accredited investors can fund their investments with Alumni Ventures via cash, trusts, retirement funds, or vehicles created for non-U.S. citizens. Over a third of AV investors choose to join us with a self-directed IRA.

However you choose to fund your investment, you’ll be pleased to know that we keep our closing process simple and streamlined. We estimate that completing an investment can take as little as 20 minutes for most investors.

All of this works together and builds on top of itself as an ever-growing flywheel.

See below to learn about Alumni Ventures’ robust Loyalty Rewards program, which provides fee reductions to qualifying investors.

Our Investing Flywheel

A national, unified investing engine powered by AV and executed by our ~40 investing professionals

5. Alumni Ventures offers a robust Loyalty Rewards program which provides fee reductions to our most loyal investors, and those who fund earlier in our fundraises.

We have built our entire firm around serving the needs of our individual investors, and we are proud to offer a Loyalty Rewards program that offers fee reductions to investors who:

1. Invest with us frequently and over a long period of time
2. Invest earlier in the fundraise process

Fee reductions earned by investors are automatically re-allocated towards more investable capital for that particular investment. The details of this math is reflected clearly within every investor’s secure online Investor Portal.

Qualified Small Business Stock (QSBS) Tax Benefit¹

In addition to fee reductions, AV investors also are eligible for a potentially significant tax-advantage through the QSBS program. This little-known benefit was signed by Congress to encourage more investment into the startup ecosystem, and — for qualifying investments — can potentially eliminate all Federal (and some state) capital gains taxes.¹

For the full details of our Loyalty Rewards program and the QSBS advantage, please see below to read our Fees, Performance & Loyalty Rewards brochure.

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¹This presentation is for informational purposes only. Alumni Ventures and its affiliates and agents do not provide legal or tax advice, and does not guarantee the availability of any tax benefit in any circumstance. You are encouraged to work with your tax professionals and other advisors to confirm your eligibility for tax benefits in your individual circumstances.