An In-Depth Look at Alumni Ventures’ Impact Fund

AV’s Impact Fund offers investors a portfolio of companies vetted for both potential profit and social impact

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For many investors, venture capital is about pursuing investments that will provide outsized returns AND align their portfolios with their values or beliefs. Savvy investors know helping entrepreneurs bring about positive change in the world is not mutually exclusive with making smart investments. Many lucrative opportunities exist in spaces where underrepresented entrepreneurs are aiming to solve some of the world’s most pressing issues. It’s this thesis that drives Alumni Ventures’ Impact Fund — doing well and doing good. For an in-depth explanation of the fund and its outlook, we spoke with Alumni Ventures’ Chief Investment Officer Anton Simunovic.

Impact Fund Open Through Q1 2022

Our Impact Fund will invest in a diversified portfolio of ~20-30 companies addressing ESG (environmental, social, governance) opportunities, anti-bias solutions, and underrepresented groups. The fund will be invested over ~12-18 months with a large reserve (~20-25%) for follow-ons. Every investor becomes a member of the Impact Venture Club, with opportunities to invest in Syndications, learn, and network.

To learn more, click below to review fund materials or connect with a Senior Partner.

Anton Simunovic
Anton Simunovic
Chief Investment Officer, Alumni Ventures

Anton is the Chief Investment Officer at Alumni Ventures. Anton has over two decades of technology experience as a proven venture capital investor, entrepreneur, and operating executive in companies ranging from startups to Fortune 10 organizations. Anton possesses substantial international experience in Canada, China, Europe, and Israel and has served on the board of directors of more than 20 private and public companies.

Could you summarize the thesis of Alumni Ventures’ Impact Fund?

The Impact Fund will offer a portfolio of companies developing impactful Environmental, Social, and Governance (ESG) or anti-bias solutions, and/or led by people that are typically underrepresented in venture capital. That includes women, people of color, and members of the LGBTQ+ community — folks who aren’t typically represented as material members of a cap table. Examples of investments could range from a women-led investing platform built specifically for women, to an online service helping first-generation immigrants apply for U.S. citizenship. We also target entrepreneurs with strong conviction who are interested in spurring long-term, positive social changes, which are often reflected in their products, services, and values.

The fund will invest in ~20-30 of these kinds of deals, which will be further diversified by industry, stage, geography, and lead investor. Diversification is a crucial element of any investing strategy as it seeks to maximize return while mitigating risk. The fund maintains ~20-25% reserves for follow-on investments in companies that are achieving break-out success, and who raise downstream rounds. 

Is there value to investing through a “social impact” lens?

Venture is about finding the disruptors, and they are often found when investing outside the mainstream venture verticals. Founders who lead impact companies often overcome enormous personal challenges to defy the odds. Their clarity of purpose and tenacity helps build great businesses, and other established investors agree. 

Here’s why we believe funding impact companies and diverse founding teams is a significant opportunity:

Alumni Ventures has made two co-investments with The Rise Fund: Persefoni, which helps organizations measure and report on their carbon footprint; and WorldCover, which provides crop insurance for smallholder farmers in Africa and around the world. Our Impact Fund will seize upon these types of opportunities: pursuing outsized returns by investing alongside established VCs while supporting inclusive companies driving positive social change. Again, doing well and doing good.

Webinar: An Introduction to AV’s Q1 Focused Funds

Wednesday, January 26, 2:00 PM ET
Hear from CEO Mike Collins and CIO Anton Simunovic about the thesis for our Q1 Focused Funds and how AV’s powerful deal sourcing and investing engine builds a portfolio for each with ~20-30 companies, diversified by stage, geography, and lead investor. 

What are some of the qualities that make for an attractive Impact Fund investment?

When it comes to the leadership team, we like to see deeply embedded conviction behind the business’s offering, and ideally past leadership experience — whether success or failure. We also like to see market challenges being solved from unique or underrepresented perspectives — a place where Impact Fund portfolio companies can excel. Beyond these qualities, we apply our conventional diligence metrics around the company’s business model, its monetization path, scalability and upside potential, how mission-critical is the solution, capital frugality, can the team scale with the business, the lead investor’s conviction and commitment to the company, etc., to determine the business’ potential.

Other important factors also play into the decision-making process for our investment team:
  • We like to invest in companies with strong founders/teams — the earlier the stage, the more important the team. Therefore, founder/market fit is critical, and ideally, we like to see previous startup experience and success on management’s resumes.
  • The AV model is to co-invest behind experienced VCs. Even better, we like to see a strong syndicate of investors who can help shape strategy, products and services, assist in recruiting, and make valuable introductions.
  • We also like companies that are solving difficult problems, so there is a technical complexity or IP and the potential to build strong competitive moats.
  • We look for an attractive price and valuation and always aim for pro-rata rights.

How will Alumni Ventures oversee this fund?

As with every Alumni Ventures fund, all deals added to our Impact Fund portfolio must first pass our disciplined due diligence process. Companies will be graded with our proprietary scorecards and receive three rounds of scrutiny from seasoned investment professionals. This process will ensure we build a portfolio of high-potential deals while upholding the core investment thesis of the fund.

Our Focused Funds team leads deal sourcing, vetting, and investing efforts under the direction of Managing Partner Lacey Farrell Johnson (Boston) and Principal Jonathan Mo (New York). Lacey has held several key investing roles during her time at Alumni Ventures and previously worked at J.P. Morgan, Goldman Sachs, and CareGroup Investment Office. Before joining our firm, Jonathan performed diligence in many verticals during his time at 11.2 Capital, Avery Dennison Ventures, and Silicon Valley Bank.

Additionally, we leverage the deal flow sourced by our more than 50 in-house investing professionals, geographically dispersed across six U.S. offices, all in key venture hubs. Every member of our team brings unique experience and a broad network of entrepreneurs, industry experts, and fellow VCs to our deal sourcing pipeline.

From among all the deals that Alumni Ventures will invest in during the upcoming year, we will select ~20-30 investments that fulfill our Impact Fund thesis. Each selection will also meet our internal guidelines for diversification across sector, stage, region, lead investor, and geography. In other words, an investor in the Impact Fund will own a diversified portfolio of companies, though exclusively developing ESG and anti-bias solutions and/or led by a diverse founding team.

Lacey Farrell Johnson
Lacey Farrell Johnson
Managing Partner, Focused Funds

Lacey joined Green D Ventures from CareGroup Investment Office, a $3 billion manager of combined endowment and pension assets. As a member of the investment team, Lacey was responsible for investment sourcing and due diligence. Lacey managed investment opportunities across asset classes and strategies, including venture capital, growth equity, buyout, private credit, and hedge fund vehicles. Previously, she was an Associate at J.P. Morgan Asset Management and an Analyst in the Securities Division of Goldman Sachs. Lacey has a BA in History from Middlebury College and an MBA from Tuck.

Jonathan Mo
Jonathan Mo
Principal, Focused Funds

Jonathan previously invested in frontier tech startups across prior VC roles at 11.2 Capital, Avery Dennison Ventures, and Silicon Valley Bank. He also supported the startup operations and product team at TandemLaunch, a deep tech startup foundry, and has helped build data-centric and automation tools at many of his roles. He studied astrophysics, biology, and political theory at Columbia, biochemistry at NYU, and has conducted research in both the physical and life sciences. He later studied medicine at the National University of Ireland, and game theory and strategy at The London School of Economics.

Do Alumni Ventures’ own diversification efforts play into these deals?

Ensuring we fund entrepreneurial teams who represent every background, race, and sexual orientation is one of Alumni Ventures’ key north stars. We believe our initiative to invest in traditionally underrepresented entrepreneurs and their visions has only helped to establish Alumni Ventures as one of the most active VCs in the industry. When it comes to our record in organic diversity, we outpace other venture firms. 

An internal report we conducted in 2020 showed that, on average, AV invests in female, Black, and Latino founders and CEOs above industry averages:

What’s one of Alumni Ventures’ previous successful impact deals?

A good example is OpenInvest, a startup that empowers its customers to assemble investment portfolios centered around specific values and causes, such as climate change or LGBTQ+ rights. We originally invested in the company’s $10.4 million Series A in 2018. Three years later, and after OpenInvest had raised over $24.3 million in five funding rounds, the company was acquired by JP Morgan.1 OpenInvest only serves to illustrate how our investment teams source deals with solid business fundamentals and promising economic upside, while delivering valuable social impact. 

To learn more about adding impact investments to your portfolio, we invite you to check out our fund materials or reach out to our team.

Impact Fund Open Through Q1 2022

Our Impact Fund will invest in a diversified portfolio of ~20-30 companies addressing ESG (environmental, social, governance) opportunities, anti-bias solutions, and underrepresented groups. The fund will be invested over ~12-18 months with a large reserve (~20-25%) for follow-ons. Every investor becomes a member of the Impact Venture Club, with opportunities to invest in Syndications, learn, and network.

To learn more, click below to review fund materials or connect with a Senior Partner.

1To see the performance of each exited investment for all Alumni Ventures funds over the last twelve months and our historical performance since 2014, click here.

Contact [email protected] for additional information. To see additional risk factors and investment considerations, visit av-funds.com/disclosures.