An Introduction to Castor Ventures

Speaker 2:
Hey everyone, thanks for joining us. We’re just letting things get going and I think we have about 50, 60 people that are going to be flowing in from the waiting room into the webinar, so we’ll just give that a few seconds.

Speaker 3:
Hi.

Speaker 2:
Alright, that seems like that’s working out well. Hi, my name’s Chris Sklarin, managing partner here with Castor Ventures. Castor is part of Alumni Ventures, a network-powered venture firm helping accredited individuals become more successful venture investors. Welcome to today’s webinar. It’ll be an overview of our Castor Ventures funds and our view of the associated landscape. The lawyers have some words we have to say here. The presentation is for informational purposes only. It’s not an offer to buy or sell securities, which are only made pursuant to formal offering documents for the fund. Please review any important disclosures there and the materials provided for the webinar, which you can access at www.avfunds.com/disclosures.

Before we get started, a few housekeeping reminders. You’ll be on mute the entire presentation. The webinar is being recorded and will be shared after the event. We encourage you to submit questions throughout the webinar. We will do our best to answer those questions submitted or follow up with you via email afterwards. To ask the questions, please just enter your questions into the questions section of the webinar control panel and click submit. Also, Henry will drop in links in the chat to our data room and our schedule call page for you to have now and during the webinar. If you don’t get to your question one-on-one due to time limitations, we will follow up after the webinar, like I said, with you one-on-one.

Alright with that, let me move on ahead here. So the agenda, we’ll do the quick welcome, meet the team here, I’m joined by Meera and Daran and then we’ll do a quick portfolio update and Q&A.

So first off, introductions. I’m, like I said, Chris Sklarin, hi, managing partner here at Castor Ventures. I’m class of ’88 at MIT and after a career in software engineering and sales engineering, went on to the venture world and started with a very small startup seed fund and then moved on to an early stage investor and then a healthcare accelerator and then a later stage investor and came to Alumni Ventures here in Boston about six and a half years ago. And I’ve been investing here with Alumni Ventures since then. After undergrad and doing my software engineering and sales engineering, I did do a degree in business while I was working out in California at Cal Berkeley’s Haas School of Business. Let me turn it over to Meera to do a quick intro on herself. Meera?

Speaker 4:
Awesome. Hey everyone, great to meet you. My name is Meera, I’m a principal on Castor Ventures. I started my career in consulting. I was at Deloitte for about 10 years where I focused on technology, media, and telecommunications as an industry, working with a lot of the big tech players out there—your Apples, Metas, Googles of the world. Moved into venture a few years ago and have worked at a few different funds here in New York and I’ve been here at Castor Ventures for about six months now, so I’m excited to chat about our portfolio with you all. I have my MBA from—unfortunately not MIT—I went to Penn, have an MBA from Wharton and then did my undergrad in engineering from SMU.

Speaker 2:
Good to have some diversity of schools though. With that, Daran, our newest member?

Speaker 5:
Yep. Hey everyone, I’m Daran Shah, the newest principal here at Castor Ventures. Prior to Castor, I led investments at an early-stage fund here in the New York City area called HL Ventures, where I led investments across Seed to Series B companies. Really looking at everything from healthcare, FinTech, future of work, climate, and enterprise SaaS. I also helped founders really across go-to-market, business model support, and growth initiatives—really helping founders scale from early idea generation to full scale itself. Prior to that I spent some time at a seed stage fund called Scout Ventures, really working there on frontier technologies and was also a relationship manager at Deutsche Bank focused on equity and debt lending. And then in terms of academics, I got my MBA from Georgetown and undergrad from Rutgers and really excited to meet everyone today.

Speaker 2:
Thank you. Thank you both. Let me go on here to chat about Alumni Ventures overall. So Alumni Ventures overall is our parent company and it was recently ranked by CB Insights, the leading information provider in the VC industry, as one of the top 20 venture capital firms in the United States. And that was exciting for us, and we are the only firm on that list that really invests primarily on behalf of individual accredited investors. So great for you to be able to join us in the venture capital journey.

Castor itself is part of Alumni Ventures. We are focused on MIT friends, family, and community. Many of our investors and many of our companies have links to the Institute. Over time, venture capital can be sort of a high-risk, high-reward asset class, so I love to sort of point out that hey, we can be 10%, whatever it is, IRR there above what Russell 2000 was offering over certain time periods. Now of course you can pick time periods to cherry-pick good and/or bad outcomes, but I’d say over time in the 10, 15, 20-year horizons, venture has shown to perform better than more highly volatile public markets. So great to be able to get in and it’s also just very different—it’s not correlated with the public markets. So great to have something that’s not correlated in your portfolio.

Also, we’re living in a different era now versus the ’90s, early 2000s when companies would go public much more quickly. Companies in the last few years have been staying private much, much longer and those gains are going to the private market investors. So you being a venture investor gives you a chance to sort of join us in this journey and get some of these private market gains that have traditionally gone to pension funds, endowments, insurance companies—the customers of large venture firms.

But really now to the heart of the update on Castor Ventures. To give you an idea of what we invest in, we wanted to put up some of the stars of the previous portfolios and be able to talk a little bit about them for you.

Status Pro is a great company doing immersive video games, doing 3D player simulations and you experience this through a VR headset — so, virtual reality headset — and we invested alongside Google Ventures in that company. Great stories there. Really fun to use the product. We actually did a demo at one of our in-person events in New York City and had people sort of playing football — and sort of you are the quarterback, and there’s all the linemen lining up around you and rushing you, et cetera. So it’s really actually quite remarkable to put that headset on and play it. And they had sold a huge number of games before Google even invested, so it was really exciting for us to come on and invest with them. That was about a year, year and a half ago, and they put out a second version of the game and will be looking to put out a third version of the game, et cetera.

So excited to see what they’ll do in this sort of immersive virtual reality world. Another one, very, very different — Excision Biotherapeutics. Excision is doing gene editing to treat life-threatening viral infections. So probably the most well-known of those would be HIV/AIDS, and they’ve got good trials that have been going on. We invested alongside Norwest Venture Partners in that particular deal, and really exciting to see them make progress. They’ve got good primate data and they’re actually doing human trials now. So really, it’s a way of actually curing that disease and working on other viral diseases as well.

Moving on to RapidSOS. I think Meera is most recently on this one, so I’m going to let her describe what they’ve been doing.

 

Speaker 4:
Awesome, thanks Chris. So traditionally RapidSOS has to do with emergency response, and traditionally emergency response relied on call centers that had analog calls, limited data coverage. It was a very kind of manual process to route calls to your emergency response centers. RapidSOS helps digitize emergency response. So they integrate data from wearables — think your phones, watches, connected cars, all your smart devices — and they triage callers, locations, names, diagnostics, and all that important information, saving a lot of very valuable time in getting these people the help that they need and getting them responses much quicker and more efficiently.

They have a very impressive customer list that includes Apple, Google, Uber, SiriusXM, Amazon, and they’ve signed contracts with a lot of other really big players in the space like Tesla, Toyota, AARP. And so they have gained some really great traction. They’re growing their revenue 75% year over year, and they have the largest public safety dataset out of any company. And so that’s been very valuable to create a really strong competitive moat for themselves. We’ve most recently participated in the company’s Series C, led by BlackRock and Accru Capital. So we’re very excited to continue to support their journey as they grow and become more mature.

 

Speaker 2:
Excellent, thanks. Yeah, that’s an exciting company that we’ve been following a long time and looking for great things out of them, so excited to see more from them soon.

Verge Genomics — another one that’s in our portfolio — doing really AI-assisted drug discovery. Exciting company. Alice Zhang, the founder and CEO there, was named one of Tech Review’s Innovators Under 35 in 2018, and she’s done some great partnerships I think with big pharma companies to help advance drug discovery and use basically a lot of genomic information to actually target what drugs will work versus trying to just do many drugs and then just having them go through trials and fail after you’ve spent many hundreds of millions or billions of dollars trying to do these trials. So really trying to accelerate drug discovery and make it a lot more cost-effective. So we’re excited about what Alice is doing there at Verge and looking to see more good things from them in the future.

The last one on here: NewRetirement. They’re a financial planning company we invested in I think last year and we really like what they’ve done. They had a lot of consumer traction — lots of individuals had signed up for their plans and were doing retirement planning using their software. So exciting to see that. And then they had some great deals with larger financial providers and actually some large corporations as well. So large corporations who want their employees to be able to do planning, and large financial providers who want their customers to be able to do financial planning. So excited to see what they’re going to do going forward, and they too are, like everyone, looking to apply AI to their business. So working on that in the next, I’d say, three to six months, you’ll see some exciting announcements I think from them coming up soon.

So our next page of sample investments — that’s another five companies on here. I’m going to cover a couple of these, and Meera, I think you’re going to cover a couple or a few. So why don’t you go ahead?

 

Speaker 4:
Sure. Okay, I’ll start with Alterra. So if we have any gamers here, you probably have experienced wanting to play but not having partners to play with. Alterra is actually inspired by Minecraft’s early iteration of bot players — so automated players that you can play against. They develop autonomous AI agents or players in collaboration with different gaming studios and designers that can play Minecraft and other games like a friend would.

So we participated here in an oversubscribed seed round led by First Spark Ventures, which is Eric Schmidt’s Deep Tech Fund, and Patron, which was the seed-stage fund that was developed by Riot Games. And Andreessen Horowitz also participated as well. The CEO actually has MIT affiliation — he was a neuroscientist and professor at MIT for nearly three years before starting Alterra in 2023. Eventually the plan here is to build multi-agent worlds where digital humans are given a physical form — kind of like robots — which is a great segue to our next company, Toggle Robotics.

I — and Chris, I can take this or you can — but yeah, I can. Okay, awesome. So Toggle is robotics applied to the construction industry. So they’re focused on rebar pre-assembly for concrete construction here. It’s a lot of that advanced manufacturing supply chain space. And we co-invested with Tribeca Venture Partners, Point72, and Blackhorn, which is a very knowledgeable investor in this space. And yeah, we collaborated with MIT Professor Simos Gerasimidis, who is Class 6. So really interesting other application of robotics for both construction and gaming.

And then moving on to Groq — this has actually been a pretty hot company now. I’m sure many of you have read about them in the news. But basically Groq builds chips using LPU. So these are chips that are specifically designed for inference, which means running generative AI models. So it is a competitor — a direct competitor — to Nvidia, which I’m sure all of you have heard of.

While Nvidia has GPUs, Groq develops LPUs specifically for inference. So they are five times cheaper, three times more powerful, and energy efficient than your conventional chips would be. So they have both tokens to run your AI software on their GR Cloud, which launched fairly recently in June, as well as — soon later this year — they’ll be launching Infrastructure as a Service as well, where you can kind of leverage your infrastructure.

The CEO, Jonathan Ross, helped invent Google’s TPU, so very knowledgeable about the space — subject matter expert. And then Ford Tamer is an MIT alum and he sits on the board. So we— it’s a super—

 

Speaker 2:
Exciting one. I think we had— I was following the developer emails, and every email would come out, it’s like, “Now we have 250,000 developers on our cloud,” and then there’d be another email the next week: “Now we have 275,000 developers,” “Now, 300,000.” So it just keeps growing. And so I think the developers are quite excited.

 

Speaker 4:
Exactly. Really, really crazy growth and we’re very excited about their future progress as well. We participated in their Series C and they’re looking to raise again very soon. So excited to participate there. Chris, do you want to talk about Enable?

Speaker 2:
Yeah, sure. So Enable — Andrew, the CEO at Enable — started off his entrepreneurial journey with this particular company actually at his prior company, and really solving the problem there at his prior employer of how to deal with business-to-business rebates. So basically, think of: you’re a widget supplier and you’re supplying widgets to Home Depot. And if Home Depot buys a million widgets, great — they’re going to charge them whatever it is, a dollar a widget. And then when they buy the next million widgets, we’ll charge them 90 cents a widget. And when they buy the next million widgets, maybe it’s 80 cents a widget, et cetera.

And so what Andrew realized is that a lot of companies are keeping track of all these business-to-business discounts on spreadsheets and having people send emails, typing out the email back to the finance group, or calling up people and saying, “Hey, we get that discount. I don’t think I’ve seen that reflected on our invoice.” And doesn’t this make sense? This should all be in a software product on the web — using software as a service, much as everything else is going that way. Everything’s going through the cloud — you have your ERPs in the cloud, you have your logistics platforms in the cloud, et cetera.

So he founded Enable to do that, and it basically helps manufacturers, distributors, retailers to take control — it says there — of their rebate programs, turn them into that engine for growth that they should be. And you don’t forget about the rebates you’ve negotiated when you’ve got it on the Enable platform. They have just done a great job. We invested with them alongside a Series A round. Menlo Ventures led that round. We actually got into that round — we knew some folks at Menlo and we knew the folks at Enable, got introduced to them.

We also knew a prior investment that Menlo had made. So Menlo made a prior investment in a company that I’d been following for years, and that company had exited and had a quite nice exit. So we were able to talk to that Menlo Ventures investor, got comfort about what the thesis was for Enable.

Andrew moved from the UK to San Francisco, and then about a year later Norwest Partners — Norwest Ventures — came in and did a Series B round, which we also got to invest in. I think we actually made the introduction to Norwest through our Alumni Ventures network. So one of our departed alumni investment team colleagues had somebody that he knew very well who worked at Norwest, who made the introductions. And anyway, Norwest eventually became the Series B investor.

And then maybe nine months later — it wasn’t even a year — Insight Partners came in and did a Series C round, which we were also able to invest in. And that was great — get some more money to work in the company. And as the common refrain in venture capital goes, you try and double down on your winners — or in this case, triple down on your winners.

So Andrew and his team are always sort of making their plans, and making new plans, and then making those plans — and doing well. And it’s kind of remarkable to have that happen, because usually we all know plans are just what they are — they’re plans. And they aren’t always met. Oftentimes, you run into the cold, hard reality of: the macro cycle might’ve changed, and maybe interest rates went up and you have a hard time or whatever. But in this case, Enable has been doing very, very well.

So well, in fact, that later on Lightspeed came in and led another oversubscribed, highly valuable round. So we’re excited about Enable — excited to see what they’re going to do. I mean, obviously the IPO window isn’t open as wide as it once was, but we’re hopeful that they can get out to a great exit in the next year, two, three — who knows what exactly that’ll be? But something like that. And it could be M&A or it could be IPO for them. But they really are growing a very valuable and exciting business.

So that’s enough on them. Let me go back over to Meera for Heart Aerospace, our Swedish-slash-LA company.

Speaker 4:
Yeah, great. So Heart is a hybrid-electric plane producer. They were founded in 2018, and they were actually a commercial spin-off from a Swedish government research program. Anders Forland is the CEO, and he was a former MIT researcher. And they are looking to build the first generation of zero-emission electric aircraft. Their planes are currently in development and testing, but they do have a prototype, so they’re well on their way to get type certification, which is the next step in that process.

And so by 2028, the planes are expected to be commercially available. But even though it’ll be several years until that happens, they already have secured over 250 confirmed orders with some really major airlines including United Airlines, Mesa Airlines, Air Canada. So there’s already very strong demand for this product — and over 300 additional letters of intent.

So we had the opportunity to participate in the company’s Series B, led by Lowercarbon Capital — this is Chris Sacca’s fund — as well as Breakthrough Energy Ventures, which is Bill Gates’ fund.

So some really great, knowledgeable investors in the space as well as EQT Ventures. The great thing here was that it was a Series B. A lot of these companies were invested in them already, but they were all taking super pro rata positions, meaning they were increasing their ownership stake from the Series — showing a really strong level of conviction in the company and the team.

With these funds, the company has actually recently opened a hub in LA, in Southern California, and they’ve hired a new CTO, Benjamin Stabler. He was recently at SpaceX and Parallel Systems as Chief Technology Officer and now will serve as Chief Technology Officer of Heart Aerospace. So this is a fairly recent investment for us, but we’re really excited about the progress that they’ve made with that Series B funding and excited to see what they’re up to next.

Speaker 2:
That’s great, thanks. So one other way that you could participate with venture capital with us and Alumni Ventures is through syndications. So the companies we’ve been talking about are all part of one of our Castor funds — or several of our Castor funds — and that’s the typical way I think you would participate in venture capital: join one of our alumni funds annually and put some money to work. And then we go out there — Daran, Meera, myself — find investments, 20 to 30 investments that put together a complete fund for you, and that’s diversified by stage, by sector, by geography. And we’ll talk about those details in a few minutes.

Syndications is another way to participate, where you put your money to work in one particular company that one of the alumni funds — could be our alumni fund or could be another one of our sibling funds — is doing. And that lets you sort of put money on a particular company. So it’s high risk, high reward in venture capital all around, but here you’d be basically saying, “Oh, I want to put $10,000 just on this one company.” And that’s even more high risk, high reward, because if the company does well, you can do well — but if the company doesn’t do well, you’ll lose that entire investment.

It’s another way to, I think, spice up your portfolio. And you can look at all these throughout the year. Alumni Ventures probably does between 25 and 50-odd syndications per year, so there could be even one per week. But it’s one way to sort of look at the investments and give you another way to participate with us.

Mythic, Skysafe, and Cyfox are all deals that are in the Castor portfolios, and we also did syndications for these. Mythic is a game technology platform. Skysafe does drone security and sky airspace security to protect from drones — either errant drones or actually malicious drones. And then Cyfox is a first at-home blood testing diagnostic platform — so really testing biomarkers to identify patients at risk for disease, monitor treatment efficacy — could be great for monitoring chronic conditions where you need to get blood testing done and avoid that trip out to a phlebotomy center and just be able to do it at home and have telemedicine with your doctor.

So that’s three more portfolio company examples.

On the diversity stage, I already said we sort of do this by sector and by stage and by geography. This is just a sample sort of graphic to show you how that could play out. We try and make every portfolio that we do each year representative of what’s going on in the venture capital world in that year.

So if you talked to me two, three, four years ago about artificial intelligence, I could assure you — yeah, we have AI, we have machine learning, and big data, et cetera. And of course in the last year, it seems like ChatGPT and what OpenAI is doing has sort of sucked up all the oxygen in the room. So every company now is some sort of artificial intelligence company, because they’re trying to figure out how do they apply AI to their business.

But that said, we’re trying to get things diverse for you so that if any one particular area does well or doesn’t do well, it’s not like that’s going to make or break the portfolio. So it’s not like you’re investing just in a healthcare fund, or just in a FinTech fund, or just in a cybersecurity fund — this is something that’s broadly diverse.

And the same thing about stage and geography — we try and do something that matches what’s going on in venture capital. So let’s say California — typically, right? Northern California where the Bay Area is — is probably 40 to 50% of the dollars that go to work in a portfolio, because we have so many great venture-funded companies that are out there.

And that said, because of the MIT fund, could we do everything around New York and New England? Sure, we could do lots of deals in New York and New England. But the whole point is — hey, we don’t want to be just a regional fund. This isn’t just an angel fund. This is a venture capital fund broadly, doing investments across the US and then some international as well.

So we’ve got things that are sort of in the Northeast, but we also have things — we have Chicago. OSI is a database company doing data analytics out in Chicago. So just various companies will be all over the country, and many of those have MIT ties — but many of them also have ties to our sibling schools.

So I think that’s a great thing to point out — that you’re getting diversity by school ecosystem as well. So there’ll be things out of our Penn fund, or things out of our Princeton fund, Berkeley, Stanford, et cetera.

Key terms — I think some of our previously sent-in questions could be covered here.

You make money with us as companies make money. So you pay the money in and your money goes to work in companies. We invest in those companies and you’re an owner in the fund. So let’s say you’re a $100,000 owner in a $5 million fund — you’re going to own 2% of that fund and therefore get 2% of the proceeds whenever we get exits from companies. You’re paid back as we get exits from companies.

Even though it’s a 10-year fund and you should really think about your money being locked up for 10 years, it really isn’t — because as companies exit, you’ll get cash back. That said, we can’t promise when that cash comes back, because the companies exit when they exit, right? They get to an M&A event and they either get bought by a big company — whether that’s Google, Microsoft, IBM, et cetera — or they have an IPO. And that’s when we can sort of monetize those private stock that we’ve bought and turn it into public dollars and get those dollars back to you.

So basically think of it as money comes back from these exits. And I’ll use Castor 2 as an example. Castor 2 — we’ve returned about half the cash so far. Our very first, I think, return — Relayer — was a German Internet of Things company. And Relayer — we had about $400,000 that we put to work from Castor Ventures. I think about $2 million got to work from Alumni Ventures overall in the company. And then about a year, year and a half later, Munich Re, a big German insurance company — partner of theirs — said, “Hey, we love you so much, we’re going to buy the whole company.” So it was a $300–$350 million exit. We got our cash back out in the January timeframe, I think, of the following year, and we were able to return that cash to our investors.

Our $400,000 at Castor 2 turned into $800,000. So that $800,000 went back — all of it — to our investors. None of it stayed with Alumni Ventures. And that starts paying back the fund.

And that was 8% of the fund. So 8% of a $10 million fund got paid back. And then we had another one — Accolade Health — which did healthcare for basically call answerings. Think of it as like call centers for people that are self-insured — so like Cisco or Juniper Networks or any of these big companies that are self-insured. When you’re calling the healthcare card number on the back of your healthcare card, you aren’t calling your company — you’re actually calling somebody like Accolade Health.

And Accolade — we got again about $2 million to work. I think Castor had about $350K in that investment. And then about, I don’t know, three years after we invested, they actually went IPO. And so we had to hold the stock 180 days. After that 180-day lockup period, we sold the stock and we got about five times our money on that investment. So our $2 million investment at Alumni Ventures turned into $10 million. And then all that money goes back to investors to start paying back the various funds that were invested in that.

So we returned about $1.75 million to our Castor 2 investors. And you add onto that other exits we’ve had — we’ve had selling tokens from Algorand, et cetera. There are other exits we’ve had — OpenGov, which sold — and those have all added up to a little less than $5 million so far in a $10 million fund.

Now, we’re still not yet “in the money” so to speak — we aren’t into the profit share. But as we get more exits — hopefully RapidSOS and some others that are in Castor 2 — we’ll do well and that’ll help us return the fund.

Once the fund is returned — including all your fees from the fund — then we get to the profit share. And that’s where the profit share is 80% back to investors as profit share, and 20% to Alumni Ventures as the success fee. And so once that happens, that’s where we get our bigger upside on the manager side. That’s sort of how to think about it. I think that’s sort of there in the fourth paragraph, talking about the 80/20 split.

You have to be an accredited investor to invest with us. I think that isn’t covered on this particular slide, but basically it means you have to be wealthy enough or have enough income to check a box with the SEC — and we help you do that process. We have an outsourced vendor, Parallel Markets, who does that for us as a third party. And you just share with them documentation showing that you have the wealth or the income — or you can have your CPA, your attorney, your tax preparer do that. That’s probably the simplest way to do it. And then once you’ve done that, you’re good to invest with us or any private company. But Parallel Markets is set up to do that for us as a service.

So that’s a pretty simple one. I think that was one of our prior questions. Let me see — that’s it for prepared slides. Meera, do you have some of the other questions that we may have or may not have gotten to yet?

Speaker 4:
Yeah, so just going through some of the questions that were sent ahead of time. The first one is for founders: Does Castor — or Alumni Ventures as a whole — require us to be funded or have a lead investor before being able to invest?

Speaker 2:
Yeah, good question. Yeah, so for any founders who are out there listening in — yeah, we do only co-invest. So as our investment process is right now, and has been for the last 10 years, we’re basically doing 5%, 10%, 15% of a venture capital round at a maximum, typically. So our seed checks might be small — they might be $50K, $100K — fairly small — $75K. We’re usually in a round that’s a few million dollars — two, three, four million.

Sometimes the rounds are larger — if around a Series A, B, etc., C round, a larger round like 10, 20, 30 million, or even a larger round — we’re probably not going to be doing 5% or 10% of that round, that’s pretty large. But we’ve written checks as big as $1M, $2M, $3M. Sometimes to write a big check, we’ll do a syndication where we put it out there to our best investors and some people will sort of put money in on that company as a one-time investment as well alongside the alumni funds.

But all of them are co-investments. So as we were talking about the investment with Enable — first with Menlo — Menlo was leading and they took the board seat. And then Norwest came in, and then Insight Partners came in, and then Lightspeed came in. So each time those are the leading investors, and then we get involved on the sort of tail end of due diligence, saying, “Oh yeah, we can tack a little bit of money onto this deal.”

How can we sort of learn from the lead investor, understand their thought process, talk to the management team, talk to the investor, try and write up our own diligence, talk to our external investment committee, get the OK from everybody, and then put a little bit of money to work?

So yeah, the process is: as a co-investor, we’re much faster and much more nimble than a larger investor. So there’s six months of diligence? We might be able to do six weeks. And sometimes it takes longer, sometimes less. But that’s the idea — that we’re going to be a co-investor alongside some other investor on the way in.

 

Speaker 4:
Alright, we have another one about kind of liquidity. So would you mind walking through the process of when would an investor see liquidity, what that would look like and what needs to happen for—

 

Speaker 2:
Absolutely. Yeah, so typically these are illiquid investments. So definitely think about it as: your money’s away for that 10-year period. So you take your $100,000, put that in — the $100,000 breaks down, $80,000 invested in companies — and Daran, Meera, and I are out there finding those companies, and our sibling fund investors too.

So a team of 40+ people here in offices in Menlo Park, Chicago, New York, Boston — working on getting deals. Once we’ve invested in those companies — and we invest in probably 80% of the capital in the first year — but then 20% is held back for follow-on investments. So we’re doing follow-on investments sort of aggressively as those companies are growing, if that makes sense, over the next 2, 3, 4 years into the life of the fund.

We can’t really promise when the exit cash will come back, because we don’t know when companies will get to exits. Some companies, like Accolade, got there earlier in the fund lifetime because they were later-stage investments. And so that cash went back. And like I said, with Castor 2, we’ve paid back now half the fund. But the fund is a 2017-vintage fund, so it’s about 6–7 years in right now, and we’ve paid back about half.

So we still have another 2, 3, 4 years to go in the fund lifetime to get to its 10-year lifetime. And there’s no guarantee that it’ll all pay back — it should, and we’re hopeful there’ll be some big exits from companies that are still in the portfolio, but nothing’s guaranteed with that.

So that’s the point of having a portfolio of 20–30 companies — is hopefully some really big ones will happen.

On the sibling fund side, I can tell a story about Upstart. It was a consumer-assisted lending company, writing software using AI to help smaller banks do a better job of lending to people. And Upstart went public. We at Alumni Ventures got about $1.1M to work in Upstart. We sold a tiny little bit of stock at the IPO but had to hold most of it for the six-month, 180-day lockup period.

And anyway, Upstart was able to trade very nicely during that lockup timeframe for us. And we sold that stock in an orderly process after the lockup expired for about $30M+ dollars. So that $30M was on that $1.1M invested.

So we had some investors get 20x out of that — even after the profit share, if they were a syndication investor in that company. And some of the funds did well — the funds got 25x or whatever — that helped pay off an entire fund, for instance, for our sibling fund from Dartmouth and our sibling fund from Yale. So that’s great — and then it got into the profit share. Once you get to those profit share dollars, that’s where Alumni Ventures takes a small cut, right? 20% of the profit, and 80% of the profit goes back to the investors in the fund.

So that’s how it works. You don’t always get the Upstarts in every fund, but that’s why I encourage people to think about investing in multiple funds over multiple years. Because which fund will do the best? We don’t know. We can’t tell the future. But we think all these companies have the potential to change the world — whether it’s Excision to cure AIDS, or SkySafe trying to save the world from drones that might be errant drones across your football stadium or your convention center or whatever.

So they’re all sort of change-the-world kind of companies, and it just remains to be seen what the future holds for them. But that’s sort of the cash flow breakdown — it’s sort of indeterminate, but hopefully large chunks as these companies get to big exits.

 

Speaker 4:
Wonderful, thanks Chris. The next question is about performance, along the lines of: how can an investor kind of keep up to date on performance of the portfolio companies as well as the fund as a whole?

 

Speaker 2:
Right. Yeah — if you’re a current investor, you have a 24/7 investor portal to log into. And we send out reports every six months on the fund as a whole. And the investor portal is updated quarterly, so there are quarterly updates too.

We don’t change the value on these companies until they have an external financing event. So once we’ve invested, the investment is held at cost until that company might raise more money at a different price. And that price could be higher or lower. And if it’s lower, we’re going to write the portfolio down — that company will go down. If it’s up, we’ll write it up.

But it’s not like watching the public stock market. So don’t expect that you’re going to log in daily and see a little ticker changing on what your portfolio is worth today versus yesterday. It’s not that exciting. But there is a personalized newsfeed there. The newsfeed talks about news from all the companies — you can follow things along.

And the most important thing is: log in every year, get your K-1 tax form for the fund you own — or funds, if it’s plural. You’ll get a K-1 for every fund. Each different one has a different K-1 statement. And we endeavor to get those out by tax time — late March, early April each year — which is a herculean effort. Thank our finance group for getting all that done.

Most private folks that you invest with will get those K-1s out sometime in July, August, and so you’re always filing the extension to get the taxes done later in the year. So Alumni Ventures is the only private firm that I’ve ever seen or worked with that actually gets them out in the March–April timeframe.

But that said, it’s not an exciting document. It’s much more exciting when you get that exit check — and yes, it’s a company that did well. So we’re hopeful that there’ll be plenty of those in the future. And so that’s the way you interact. There’s also webinars, there’s different educational events, there’s things you can log into. We do things in person from time to time at our various offices in the various cities.

Did I get everything in that question, Meera? I don’t know if I covered—

 

Speaker 4:
That was perfect. And then, along the lines of being a current investor — what is the minimum check size needed to become an investor with Alumni?

 

Speaker 2:
Sure, yeah. We used to have a $50,000 minimum for the alumni funds, but I think now we’ve got it — in the last couple of years — down to $10,000. So I’d say typical check size, just to set a level set: $75,000–$100,000 is kind of typical. But you have to do what’s right for you.

To be an accredited investor, the rules are: $1 million net worth and higher, not including your primary residence. So that sort of $25K–$50K number is sort of a small chunk, but a significant chunk of that $1 million number.

But that said, if you had $5 million to diversify in liquid assets, would you want $500,000 in venture over time? Maybe. I’m sure we’d love that in our Castor Fund 9 coming up. But that said, maybe you’d be better served by doing that over five years — one-fifth every year — and do $100,000 per year in each fund sequentially. So you’re sort of spread out in time as well.

So we’re already diversifying by stage and by sector and by geography — but if you diversify by time as well, then maybe you’ll get that next Upstart deal. Or you’ll get that next Drew Houston at Dropbox — he was an MIT alum — and Dropbox did pretty well. So I would hate for you to be in fund number 10 and then have fund number 11 have the really big win — or fund number 9 and then miss fund number 10.

So maybe you start smaller and even start with that $10,000 minimum, and then try and do something — I’d say over a period of time — so that you get diversified into more companies.

Speaker 4:
And then on the topic of being an accredited investor — I know we talked about it a little bit earlier — but the question was: if SEC requirements change, what is the impact of that on investors? I think we did get a response as well. So I think the answer to that is: just as long as you are accredited at the time of investment, if the SEC regulations and rules change later on, you shouldn’t be impacted as an investor there.

Speaker 2:
Exactly, yeah. My understanding — and what’s always been done so far — is you need to be accredited at the time of investment, and then the next time you make an investment, you also need to be accredited. So if you’re doing this over multiple years and Congress happens to change the laws or the SEC changes the rules, then we just need to make sure you’re up to date with the current rules.

But in reality, they haven’t changed those dollar thresholds in a long time. So with the impact of inflation, it’s actually becoming easier and easier to become an accredited investor — even though the number in nominal dollars has stayed the same, because inflation obviously has worn down the value of those nominal dollars over time.

But those rules quite possibly could change. Who knows what’ll happen in various congressional sessions and what happens with various elections — that certainly could change to a higher number. But it really is just: you need to be accredited at the point in time when you invest.

And that’s the important thing. I guess one detail also on accredited investor — if you go the income route, it is a two-year lookback. So if we’re talking about investing in Castor Ventures 9, let’s say, and here it is 2024, you need to say, “Yeah, I have that income today or I expect it today in 2024, and I had it in 2023 and 2022.”

So whenever there’s an income thing, it’s always two years’ lookback on the income. On the wealth test for your net worth, it’s everything you own — including your retirement accounts, including any rental properties, businesses you own, whatever.

Which is why it’s easier to let your CPA or attorney just say you’re accredited — but it’s no problem if you just have it all in a Fidelity account or Vanguard or whatever. You can obviously just put a statement into Parallel Markets, and they can use that to attest to your accreditation as well.

So I just know people — finances can get complicated — and if you do have an accounting person doing your taxes already, they probably know your situation. They can just write on their letterhead: “Yes, Chris S. Clarin is accredited,” send it on in, and boom — the checkmark is there. Which sometimes is just a little easier.

Speaker 4:
Great. One more kind of question about becoming an investor: Do all investors need to be American citizens, or are foreign investors allowed as well?

Speaker 2:
Yeah, we have investors from all over the world. It’s a little easier, I think — but actually it’s not that much different — whatever your tax status is. So if you already are dealing with the U.S. tax authorities, you can just invest as if you were a U.S. investor. We have folks from all over who are investing that deal with the U.S. IRS, and they just invest using the normal process.

If you would like to take advantage of our offshore vehicle, we do have an offshore vehicle. If you aren’t dealing with the U.S. tax authorities, you can just use the offshore vehicle. There’s no additional fees involved with that. We take care of all that, and that shields you from the U.S. tax authorities. You obviously pay taxes to whatever tax authority you are supposed to pay it to. So that’s all set up in a similar way.

There’s slightly different paperwork, but Henry can help with that — on our Investor Relations team. If anybody has any questions there.

You can also invest either via cash or through retirement funds. So if you’re doing retirement funds, it’s self-directed Individual Retirement Accounts that are used in the U.S. — obviously for U.S. tax people. And so we have a number of investors — probably like 20%, 25%-ish — that do use retirement funds to invest in.

That’s a nice way — since you can’t benefit from your retirement funds until you retire — if you have money that’s done well in the stock market in those accounts, and you’d like to cash out some of those gains and diversify it into venture capital, it’s a nice way to do that.

We have a partner, Strata, down in Texas, who manages billions of dollars of self-directed IRA money, and they make it really easy to do that. You sort of invest with them, and they invest on your behalf into Castor Ventures.

So again, Henry can set all that up for you and introduce you at the appropriate time so you get the very good fee-advantaged account with our partnership with Strata. They have a very cheap account to hold your Alumni Ventures accounts.

Speaker 4:
Excellent. If we have time for one more, we’ll switch gears a little bit. And then our last question has to do with our network. So I know we have a network of over 600,000 people. What are some of the options and ways in which we have used that network to help our founders out in terms of introductions and other ways that we’re able—

 

Speaker 2:
Yeah, lots of stories there. I mean, it is rather anecdotal, but it really does show the power of the network.

Sometimes it’s with hiring. So we had one portfolio company looking for a Head of Operations, and we put the word out to various folks. And there’s the automated portion of that, which is just, “Hey, set it up on your job board. Tell us what that is.” We get your job board scraped and put into our job board. And then boom — if you go to av.vc and scroll down to the bottom under “Careers,” you can find jobs at portfolio companies and click on that. And you’ll see we have now, I think, 1,300 or 1,400 portfolio companies on that job board. There are 400–500 companies that are sort of opted in and putting their jobs out there. So plenty of folks did that.

And this particular company I’m thinking of — the Cambridge company — wanted the Head of Operations. We actually put the word out to our Venture Fellows, and our Venture Fellows work with Daran and Meera on helping do due diligence. And they’re typically mid-career professionals who want to learn about venture. They’re volunteering with us — sort of an educational program really — for like a year, learning about venture, helping with community outreach, helping with doing due diligence.

Some of them are medical doctors, some of them are software engineers, some of them are biotech execs — all kinds of different lives and work histories. And we put this out to our Venture Fellow alumni network. The Venture Fellow alumni, I think over in Europe, introduced us to some folks and said, “Hey, we know some people in Cambridge,” da-da-da — and we got four or five qualified candidates for this company that was hiring in Cambridge, Massachusetts.

So it is just an example — when you’re looking for board members, you’re looking for employees, you’re looking for an advisor.

Sometimes we do these panels, which are sort of like a go-to-market advice panel. And our CEO Services group will help us go find experts — and you can be an expert and not even be an investor with us — just sign up as an expert on our website. And then maybe you get invited to one of these go-to-market panels. And so a panel gets set up, and the company can pitch their product or service or do their funding pitch, and then our panel of experts can give them straight feedback.

And it’s nice to have that sort of back-and-forth — especially when it’s a low-pressure, no-pressure situation where it’s like, “We’re not the ones that are lead investors. We’re not the ones that are buying your product or service, but we can give you some expertise.” And maybe we have a CFO who’s at a logistics company — and that could be your target market. And the CFO is signed up as an expert panelist on our expert network.

So a lot of different ways that we can try and be helpful. I think we run these sort of CEO dinners — usually once a quarter, but sometimes there are more of them — in various cities where we have offices and bring our CEOs at portfolio companies together.

Sometimes we have events at our offices where we bring not only management teams but also our investors in. So we had one of those in New York last fall — and that’s where we were demoing the Status Pro Vision headset and playing football there in a virtual reality way.

So lots of different ways to try and give people airtime.

We have a new podcast that’s out there — you can go find that on the web — and that has a lot of interviews with founders and different bits of advice that they give each other.

So I think there’s a lot of good networking that goes on. And I think every venture investor says they have a great network — but I think our 600,000+ folks really do want our folks to succeed. And so it’s always good to have your alumni compatriots rooting for you — and I think that’s sort of what our model is all about.

 

Speaker 4:
Excellent. Well, great way to round it up. It is now 45 or 48 past the hour, so we’re going to call it a day here. Thanks for all the questions. We’ll get back to anyone whose question we didn’t get to live, and once the webinar ends, you’ll see a quick survey on the screen. Please complete the survey so we can learn how your experience was today and where we can continue to improve.

Thanks again, we can’t wait to connect with you on our next webinar. Cheers, everyone.

Speaker 2:
Thank you.

 

Speaker 1:
The broadcast is now starting. All attendees are in listen-only mode.

Speaker 2:
Hey everyone, thanks for joining us. We’re just letting things get going and I think we have about 50–60 people that are going to be flowing in from the waiting room into the webinar, so we’ll just give that a few seconds.

Speaker 2:
Alright, that seems like that’s working out well. Hi, my name’s Chris Laren, Managing Partner here with Castor Ventures. Castor is part of Alumni Ventures, a network-powered venture firm helping accredited individuals become more successful venture investors.

Welcome to today’s webinar. It’ll be an overview of our Castor Ventures funds and our view of the associated landscape. The lawyers have some words we have to say here: The presentation is for informational purposes only. It’s not an offer to buy or sell securities, which are only made pursuant to formal offering documents for the fund. Please review any important disclosures there and the materials provided for the webinar, which you can access at www.avfunds.com/disclosures.

Before we get started, a few housekeeping reminders: You’ll be on mute the entire presentation. The webinar is being recorded and will be shared after the event. We encourage you to submit questions throughout the webinar. We will do our best to answer those questions submitted or follow up with you via email afterwards. To ask the questions, please just enter your questions into the questions section of the webinar control panel and click submit.

Also, Henry will drop in links in the chat to our data room and our schedule call page for you to have now and during the webinar. If you don’t get to your question one-on-one due to time limitations, we will follow up after the webinar with you individually. Alright, with that, let me move on ahead here.

So the agenda: We’ll do the quick welcome, meet the team here—I’m joined by Mira and Daran—then we’ll do a quick portfolio update and Q&A. So first off, introductions. Like I said, I’m Chris Laren, Managing Partner here at Castor Ventures. I’m class of ’88 at MIT and after a career in software engineering and sales engineering, I went into the venture world and started with a very small startup seed fund, then moved on to an early-stage investor, then a healthcare accelerator, and then a later-stage investor.

I came to Alumni Ventures here in Boston about six and a half years ago and have been investing here with Alumni Ventures since then. After undergrad and doing my software engineering and sales engineering, I did a degree in business while I was working out in California at Cal Berkeley’s Haas School of Business. Let me turn it over to Mira to do a quick intro on herself. Mira.

Speaker 4:
Awesome. Hey everyone, great to meet you. My name is Mira, I’m a Principal at Castor Ventures. I started my career in consulting—I was at Deloitte for about 10 years where I focused on technology, media, and telecommunications as an industry, working with a lot of the big tech players out there: your Apples, Metas, Googles of the world.

I moved into venture a few years ago and have worked at a few different funds here in New York, and I’ve been here at Castor Ventures for about six months now, so I’m excited to chat about our portfolio with you all. I have my MBA from, unfortunately, not MIT—I went to Penn, have an MBA from Wharton, and then did my undergrad in engineering from SMU.

Speaker 2:
Good to have some diversity of schools though.

Speaker 4:
With that.

Speaker 2:
Daran, our newest member.

Speaker 5:
Yep. Hey everyone, I’m Daran Shah, the newest Principal here at Castor Ventures. Prior to Castor, I led investments at an early-stage fund here in the New York City area called HL Ventures, where I led investments across seed to Series B companies—really looking at everything from healthcare, FinTech, future of work, climate, and enterprise SaaS.

I also helped founders across go-to-market, business model support, and growth initiatives—really helping founders scale from early idea generation to full scale itself. Prior to that, I spent some time at a seed-stage fund called Scout Ventures, working on frontier technologies, and I was also a Relationship Manager at Deutsche Bank focused on equity and debt lending.

In terms of academics, I got my MBA from Georgetown and undergrad from Rutgers, and I’m really excited to meet everyone today.

Speaker 2:
Thank you, thank you both. Let me go on here to chat about Alumni Ventures overall.

Alumni Ventures overall is our parent company, and it was recently ranked by CB Insights—the leading information provider in the VC industry—as one of the top 20 venture capital firms in the United States. That was exciting for us, and we are the only firm on that list that really invests primarily on behalf of individual accredited investors. So, great for you to be able to join us in the venture capital journey.

Castor itself is part of Alumni Ventures. We are focused on MIT friends, family, and community. Many of our investors and many of our companies have links to the Institute.

Over time, venture capital can be a high-risk, high-reward asset class. I love to point out that we can be 10%-ish IRR above what the Russell 2000 was offering over certain time periods. Now, of course, you can pick time periods to cherry-pick good and/or bad outcomes, but I’d say over time—in the 10-, 15-, 20-year horizons—venture has shown to perform better than more highly volatile public markets.

So, great to be able to get in, and it’s also very different—it’s not correlated with the public markets. Great to have something that’s not correlated in your portfolio.

Also, we’re living in a different era now versus the ’90s and early 2000s when companies would go public much more quickly. Companies in the last few years have been staying private much, much longer, and those gains are going to the private market investors.

So, you being a venture investor gives you a chance to join us in this journey and get some of these private market gains that have traditionally gone to pension funds, endowments, insurance companies, the customers of large venture firms—but really now to the heart of the update on Castor Ventures.

To give you an idea of what we invest in, we wanted to put up some of the stars of the previous portfolios and talk a little bit about them for you. So I guess first off here, just sort of left to right, a little bit about Status.

Status Pro is a great company doing immersive video games and 3D player simulations that you experience through a VR headset. We invested alongside Google Ventures in that company. Great stories there—it’s really fun to use the product.

We actually did a demo at one of our in-person events in New York City and had people playing football—you’re the quarterback and there’s all the linemen lining up around you and rushing you, etc. It’s actually quite remarkable to put that headset on and play it. They had sold a huge number of games before Google even invested, so it was really exciting for us to come on and invest with them. That was about a year, year and a half ago, and they’ve put out a second version of the game and will be looking to put out a third version, etc. So excited to see what they’ll do in this immersive virtual reality world.

Another one, very, very different: Excision Biotherapeutics. Excision is doing gene editing to treat life-threatening viral infections. The most well-known of those is HIV/AIDS, and they’ve got good trials that have been going on.

We invested alongside Norwest Venture Partners in that particular deal, and it’s really exciting to see them make progress. They’ve got good primate data and are actually doing human trials now. So it’s really a way of curing that disease and working on other viral diseases as well.

Moving on to RapidSOS. I think Mira is most recently on this one, so I’m going to let her describe what they’ve been doing.

Speaker 4:
Awesome, thanks Chris. So, traditionally, emergency response relied on call centers that had analog calls and limited data coverage—it was a very manual process to route calls to emergency response centers.

RapidSOS helps digitize emergency response. They integrate data from wearables—think your phones, watches, connected cars, all your smart devices—and they triage callers, locations, names, diagnostics, and all that important information, saving very valuable time in getting these people the help that they need and getting responses much quicker and more efficiently.

They have a very impressive customer list that includes Apple, Google, Uber, SiriusXM, Amazon, and they’ve signed contracts with a lot of other big players in the space like Tesla, Toyota, and AARP. They’ve gained really great traction—they’re growing revenue 75% year over year—and they have the largest public safety dataset of any company.

That’s been very valuable to create a really strong competitive moat for themselves. We most recently participated in the company’s Series C led by BlackRock and Accel, so we’re very excited to continue to support their journey as they grow and become more mature.

Speaker 2:
Excellent, thanks. Yeah, that’s an exciting company that we’ve been following for a long time and we’re looking for great things out of them—excited to see more from them soon.

Verge Genomics is another one that’s in our portfolio, doing AI-assisted drug discovery. It’s an exciting company—Alice Zhang, the founder and CEO, was named one of Tech Review’s Innovators Under 35 in 2018.

She’s done some great partnerships with big pharma companies to help advance drug discovery and use a lot of genomic information to actually target which drugs will work, versus trying to do many drugs and then having them go through trials and fail after you’ve spent many hundreds of millions or billions of dollars.

So it’s really trying to accelerate drug discovery and make it a lot more cost-effective. We’re excited about what Alice is doing there at Verge and looking to see more good things from them in the future.

Speaker 2:
The last one on here, NewRetirement. They’re a financial planning company we invested in last year and we really like what they’ve done. They had a lot of consumer traction—lots of individuals had signed up for their plans and were doing retirement planning using their software. So, exciting to see that. They also had some great deals with larger financial providers and actually some large corporations as well. Large corporations want their employees to be able to do planning, and large financial providers want their customers to be able to do financial planning.

So, excited to see what they’re going to do going forward, and they too are, like everyone, looking to apply AI to their business. Over the next three to six months, you’ll see some exciting announcements from them coming up soon.

Our next page of sample investments—that’s another five companies on here. I’m going to cover a couple of these and Mira, I think you’re going to cover a couple or a few. So why don’t you go ahead.

Speaker 4:
Sure. Okay, I’ll start with Alterra. So if we have any gamers here, you’ve probably experienced wanting to play but not having partners to play with. Alterra is actually inspired by Minecraft’s early iteration of bot players—automated players that you can play against.

They develop autonomous AI agents or players in collaboration with different gaming studios and designers that can play Minecraft and other games like a friend would. We participated here in an oversubscribed seed round led by First Spark Ventures, which is Eric Schmidt’s Deep Tech Fund, and Patron, which was the seed-stage fund developed by Riot Games. Andreessen Horowitz also participated as well.

The CEO actually has MIT affiliation—he was a neuroscientist and professor at MIT for nearly three years before starting Alterra in 2023. Eventually, the plan here is to build multi-agent worlds where digital humans are given a physical form, kind of like robots, which is a great segue to our next company, Toggle Robotics.

And Chris, I can take this or you can.

Speaker 4:
Yeah, I can. Okay, awesome. So Toggle is robotics applied to the construction industry. They’re focused on rebar pre-assembly for concrete construction. This is in the advanced manufacturing and supply chain space.

We co-invested with Tribeca Venture Partners, Point72, and Blackhorn, which is a very knowledgeable investor in this space. We also collaborated with MIT Professor Simos Gerasimidis, who is Course 6. So, really interesting other applications of robotics—for both construction and gaming.

Moving on to Groq, this has been a pretty hot company recently. I’m sure many of you have read about them in the news. Basically, Groq builds chips using LPUs—these are chips specifically designed for inference, meaning running generative AI models. It is a direct competitor to Nvidia, which I’m sure all of you have heard of.

While Nvidia has GPUs, Groq develops LPUs specifically for inference. They are five times cheaper, three times more powerful, and more energy-efficient than conventional chips. They have tokens to run your AI software on their Groq Cloud, which launched fairly recently in June, and later this year they’ll be launching infrastructure as a service as well, where you can leverage their infrastructure.

The CEO, Jonathan Ross, helped invent Google’s TPU, so he’s very knowledgeable about the space and a subject matter expert. Also, Ford Tamer, an MIT alum, sits on the board.

Speaker 2:
It’s a super exciting one. I think we were following the developer emails and every week there’d be a new one saying, “Now we have 250,000 developers on our cloud,” and the next week, “Now 275,000,” and then “Now 300,000.” It just keeps growing, and developers seem quite excited.

Speaker 4:
Exactly. Really crazy growth, and we’re very excited about their future progress as well. We participated in their Series C, and they’re looking to raise again very soon. So, excited to participate there. Chris, do you want to talk about Enable?

Speaker 2:
Yeah, sure. So Enable’s CEO, Andrew Butt, started his entrepreneurial journey with this particular company while at his prior employer, solving the problem of how to deal with business-to-business rebates.

Basically, think of a widget supplier providing widgets to Home Depot: If Home Depot buys a million widgets, they’re charged $1 each; when they buy the next million, 90 cents each; and the next million, 80 cents each.

Andrew realized a lot of companies were tracking these discounts on spreadsheets, sending emails back and forth to finance teams, or calling to confirm discounts. This should all be in a software product on the web, using SaaS like everything else in the cloud—your ERPs, logistics platforms, etc.

So, he founded Enable to do exactly that. It helps manufacturers, distributors, and retailers take control of their rebate programs and turn them into growth engines. When you’re on Enable’s platform, you don’t forget the rebates you’ve negotiated.

They’ve done a great job. We invested with them alongside a Series A round led by Menlo Ventures. We knew folks at Menlo and at Enable, got introduced to them, and also knew a prior Menlo investment that I’d followed for years. That company exited successfully, so we talked to that Menlo investor and got comfort on Enable’s thesis.

Andrew moved from the UK to San Francisco, and about a year later Norwest Partners came in and did a Series B, which we also invested in. We may have made that introduction to Norwest through our Alumni Ventures network—one of our former investment colleagues knew someone well at Norwest and made the connection.

Norwest became the Series B investor, and nine months later Insight Partners came in and led a Series C, which we were also able to invest in. It was great to get more money to work in the company. As the common refrain in VC goes, you try to double down—or in this case, triple down—on your winners.

Andrew and his team have consistently met their plans and done very well—rare in this industry, since macro changes (like interest rate hikes) can derail plans. But Enable’s execution has been strong.

Later on, Lightspeed came in and led another oversubscribed, highly valuable round. We’re excited about Enable and hopeful they can reach a great exit in the next year or two—maybe via M&A or IPO. They’re building a very valuable and exciting business.

So that’s enough on Enable. Let me turn it back to Mira for Heart Aerospace, our Swedish/LA company.

Speaker 4:
Yeah, great. So Heart is a hybrid-electric plane producer founded in 2018. It’s a commercial spinoff from a Swedish government research program. Anders Forslund is the CEO, a former MIT researcher.

They’re building the first generation of zero-emission electric aircraft. The planes are currently in development and testing, but they do have a prototype and are on their way to type certification, which is the next step. By 2028, the planes are expected to be commercially available.

Even though that’s several years away, they’ve already secured over 250 confirmed orders with major airlines including United Airlines, Mesa Airlines, and Air Canada. There’s already strong demand for this product, with over 300 additional letters of intent.

We had the opportunity to participate in their Series B, led by Lowercarbon Capital (Chris Sacca’s fund) and Breakthrough Energy Ventures (Bill Gates’ fund).

Speaker 4:
So some really great, knowledgeable investors in the space as well as EQT Ventures. The great thing here was that it was a Series B—many of these companies were already invested in, but they were all taking super pro-rata positions, meaning they were increasing their ownership stake from the Series A, showing a really strong level of conviction in the company and the team.

With these funds, the company has recently opened a hub in LA, in Southern California, and they’ve hired a new CTO, Benjamin Stabler. He was recently at SpaceX and Parallel Systems as Chief Technology Officer and now will serve as CTO of Heart Aerospace. This is a fairly recent investment for us, but we’re really excited about the progress they’ve made with that Series B funding and excited to see what they’re up to next.

Speaker 2:
That’s great, thanks. So, one other way that you could participate in venture capital with us and Alumni Ventures is through syndications. The companies we’ve been talking about are all part of one of our Castor funds or several of our Castor funds, and that’s the typical way you’d participate in venture capital—join one of our alumni funds annually, put some money to work, and then we go out there (Daran, Mira, myself) and find 20 to 30 investments that make up a complete fund for you. That fund is diversified by stage, sector, and geography—and we’ll talk about those details in a few minutes.

Syndications are another way to participate. Here, you put your money to work in one particular company that one of the alumni funds—ours or one of our sibling funds—is investing in. This lets you invest in a single company. It’s high risk, high reward across venture capital in general, but here it’s even more concentrated: You could say, “I want to put $10,000 into just this one company.” If the company does well, you can do well, but if it doesn’t, you could lose that entire investment.

It’s another way to spice up your portfolio. You can look at these throughout the year—Alumni Ventures probably does between 25 and 50 syndications per year, sometimes even one per week. It’s another way to view investments and gives you another option to participate with us.

Mythical, SkySafe, and Cyfox are all deals that are in the Castor portfolios, and we also did syndications for these. Mythical is a game technology platform. SkySafe provides drone security and airspace protection from errant or malicious drones. Cyfox is the first at-home blood testing diagnostic platform. It tests biomarkers to identify patients at risk for disease and monitors treatment efficacy—great for monitoring chronic conditions where you need frequent blood testing. It helps avoid trips to a phlebotomy center and enables telemedicine consultations with your doctor.

So, those are three more portfolio company examples.

On diversification by stage, I already said we do this by sector, stage, and geography. The sample graphic just shows how that could play out. We try to make every portfolio we build each year representative of what’s going on in the venture capital world that year.

For example, if you’d talked to me 2–4 years ago about artificial intelligence, I’d have said we have AI, machine learning, and big data deals. Of course, in the last year, ChatGPT and OpenAI have dominated headlines, so now nearly every company is trying to figure out how to apply AI to its business.

Even with that, we aim for diversity so that no single area can make or break the portfolio. You’re not just investing in a healthcare fund, a fintech fund, or a cybersecurity fund. It’s broadly diversified.

The same goes for stage and geography. We try to mirror what’s happening in venture overall. Typically, California—especially Northern California and the Bay Area—receives 40–50% of venture dollars because of the many funded companies there.

Could we do everything around New York and New England because we’re the MIT fund? Sure, we could do lots of deals there. But the whole point is, this isn’t just a regional or angel fund. It’s a broad venture capital fund doing investments across the U.S. and internationally.

We have companies in the Northeast, Chicago (e.g., OSI, a database analytics company), and across the country. Many of these companies have MIT ties, but many also come from sibling school networks—Penn, Princeton, Berkeley, Stanford, etc. This adds another layer of diversification: school ecosystem diversity.

Key terms: Some of our previously submitted questions can be answered here. You make money with us as companies make money. You invest money into the fund, we invest in companies, and you own a percentage of the fund. For example, if you invest $100,000 in a $5 million fund, you own 2% of that fund and therefore receive 2% of the proceeds.

As companies exit, you’re paid back. Although it’s structured as a 10-year fund, money is not fully locked up for 10 years. As exits occur, you receive cash back. However, we can’t predict exactly when companies will exit. They might be acquired by Google, Microsoft, IBM, or go public via IPO. That’s when we can monetize our private shares and return capital to you.

For example, in Castor Fund II, we’ve already returned about half the invested capital. Our first return came from Relayer, a German IoT company. Alumni Ventures invested about $2 million total, with $400,000 from Castor Ventures. About a year later, Munich Re (a big German insurance partner) acquired the company in a ~$300–350 million exit. In January the following year, we returned $800,000 to our investors, doubling the initial investment. That represented 8% of the fund, meaning 8% of a $10 million fund was repaid.

Another exit was Accolade Health, a healthcare call-answering service for self-insured companies like Cisco and Juniper Networks. Alumni Ventures invested about $2 million, with $350,000 from Castor Ventures. About three years later, they went public. After a 180-day lockup, we sold our stock for about 5x the investment. Our $2 million became $10 million, and we returned $1.75 million to Castor II investors.

Combined with other exits (like selling Algorand tokens, OpenGov’s acquisition), we’ve returned just under $5 million so far on a $10 million fund. We’re still not yet in profit-sharing mode, but as more exits occur (hopefully including RapidSOS and others), we expect to fully return the fund.

Once your invested capital and fees are fully returned, profit-sharing kicks in. At that point, 80% of profits go to investors, 20% to Alumni Ventures as a success fee. That’s detailed in the fourth paragraph on the slide about the 80/20 split.

You must be an accredited investor to invest. This means meeting SEC income or net worth thresholds. We use a third-party service, Parallel Markets, to verify this. You provide documentation showing your wealth or income, or have your CPA, attorney, or tax preparer confirm it. Once that’s done, you’re approved to invest with us or other private offerings. Parallel Markets handles this easily as a service.

That’s a simple process. I think that answers one of the prior questions. Mira, do you have some of the other questions we haven’t covered yet?

Speaker 4:
Yeah, so just going through some of the questions that were sent ahead of time. The first one is: for founders, does Castor or Alumni Ventures as a whole require us to be funded or have a lead investor before being able to invest?

Speaker 2:
Yeah, good question. For any founders out there listening, we only co-invest. Our investment process has been this way for the last 10 years. We typically take 5–15% of a venture capital round at most. Our seed checks might be small—$50,000, $75,000, $100,000. We’re usually in a round of $2–4 million.

Sometimes the rounds are larger—Series A, B, or C rounds of $10–30 million or more. In those cases, we’re not doing 5–10% of the round. We’ve written checks as large as $1–3 million, and sometimes, to write a big check, we’ll do a syndication. That’s when we open it up to our best investors who can put money into that company as a one-time investment alongside the alumni funds.

But all of them are co-investments. For example, with Enable: Menlo led the round and took the board seat, then Norwest came in, then Insight Partners, then Lightspeed. Each time, those firms were leading, and we got involved at the tail end of due diligence.

We learn from the lead investor, understand their thought process, talk to the management team and investor, write our own diligence, consult our external investment committee, get approval, and then put a smaller amount of money to work.

As a co-investor, we’re faster and more nimble than a lead investor. If the lead takes six months of diligence, we might take six weeks (sometimes more, sometimes less). But the idea is that we’re co-investors alongside other investors on the deal.

Speaker 4:
Alright, we have another one about liquidity. Would you mind walking through the process of when an investor would see liquidity, what that would look like, and what needs to happen for that to occur?

Speaker 2:
Absolutely. These are illiquid investments, so think of your money as being tied up for 10 years. If you invest $100,000, roughly $80,000 is invested directly into companies. Daran, Mira, I, and our sibling fund investors (a team of 40+ people in Menlo Park, Chicago, New York, Boston) find those companies.

About 80% of the capital is invested in the first year. The remaining 20% is held back for follow-on investments in years 2–4 as companies grow.

We can’t promise when cash will come back because exits are unpredictable. Some companies, like Relayer or Accolade Health, exited early in the fund’s life because they were later-stage investments. With Castor Fund II, we’ve paid back about half the fund. That fund launched in 2017 (about 6–7 years ago), so we still have another 2–4 years to go. There’s no guarantee it will fully return, but we’re hopeful for big exits from remaining companies.

This is why we invest in 20–30 companies per fund—so hopefully, some big wins occur.

On the sibling fund side, I can share the Upstart story: Upstart was a consumer lending software company using AI to help smaller banks lend better. Alumni Ventures invested about $1.1 million. At IPO, we sold a tiny bit but held most of it through the 180-day lockup.

After the lockup expired, we sold the stock in an orderly process for over $30 million. That turned $1.1 million into $30 million—a 20x return for syndication investors and 25x for some funds. That one win paid off entire funds for our Dartmouth and Yale sibling funds.

Once invested capital and fees are fully returned, we enter profit-sharing mode: 80% of profits go back to investors, and 20% goes to Alumni Ventures as the success fee.

Not every fund will have an Upstart-level exit, which is why I recommend investing in multiple funds over multiple years. We can’t predict which will do best. But we aim to invest in companies with potential to change the world—like Excision (curing AIDS) or SkySafe (protecting stadiums from drones). Time will tell which become big winners.

Speaker 4:
Wonderful, thanks Chris. The next question is about performance—how can an investor keep up to date on the performance of the portfolio companies and the fund as a whole?

Speaker 2:
Right. If you’re a current investor, you have 24/7 access to the investor portal. We send out reports every six months on the fund as a whole, and the portal is updated quarterly with valuations.

We don’t change company valuations until an external financing event occurs. After our investment, the value stays at cost until the company raises another round at a different price. If the new valuation is lower, we mark it down; if higher, we mark it up.

This isn’t like watching the public stock market—you won’t see daily changes. But you will see periodic updates and a personalized newsfeed in the portal.

Speaker 2:
The newsfeed talks about news from all the companies. You can follow along, and the most important thing is to log in every year and get your K-1 tax form for the fund you own. If you own multiple funds, you’ll get a separate K-1 for each. Each different fund has its own K-1 statement, and we work hard to get those out by tax time—late March or early April each year—which is a herculean effort.

Thank our finance group for getting all that done. Most private firms you invest with don’t get those K-1s out until July or August, meaning you’d always need to file a tax extension. Alumni Ventures is the only private firm I’ve ever seen that consistently gets them out in March or April.

That said, the K-1 itself isn’t the exciting document. It’s much more exciting when you receive an exit check because a company did well. We’re hopeful there will be plenty of those in the future.

That’s how you interact with the fund. There are also webinars, educational events you can join, and occasional in-person events at our various offices in different cities. Did I cover everything in that question, Mira?

Speaker 4:
That was perfect. And then, along the lines of being a current investor, what is the minimum check size needed to become an investor with Alumni Ventures?

Speaker 2:
Sure. We used to have a $50,000 minimum for the alumni funds, but in the last couple of years we’ve lowered it to $25,000. Typical check sizes are $75,000–$100,000, but you should invest at a level that’s right for you.

To be accredited, the SEC rules require a $1 million net worth (not including your primary residence). A $25,000 or $50,000 investment is a relatively small but still significant portion of that.

If you had $5 million in liquid assets, you might want $500,000 in venture over time. We’d certainly love that in our Castor Fund 9, but you’d probably be better off spreading it over five years—putting in $100,000 per year into each sequential fund.

We already diversify by stage, sector, and geography, but diversifying by time gives you exposure to more companies and increases the chances of catching the next big win—like an Upstart deal or Dropbox (MIT alum Drew Houston’s company). You wouldn’t want to invest in Fund 9, skip Fund 10, and have Fund 10 be the big winner. So, starting smaller and spreading your investments over multiple funds can be a smart approach.

Speaker 4:
And then, on the topic of being an accredited investor—we touched on it earlier—but the question was: if SEC requirements change, what is the impact on investors?

Speaker 2:
Exactly. My understanding—and what’s always been done—is that you need to be accredited at the time of investment. If the SEC rules change later, you wouldn’t be impacted for past investments.

For future investments, we’d just ensure you meet the new rules. But in reality, the dollar thresholds haven’t changed in a long time. Due to inflation, it’s actually becoming easier to qualify as an accredited investor, even though the nominal numbers have stayed the same.

Congress or the SEC could raise those thresholds in the future, but as of now, you only need to meet the accreditation standard at the point you invest.

One detail: if you qualify via income, it’s a two-year lookback. For example, if you want to invest in Castor Ventures 9 in 2024, you need to have had the required income in both 2022 and 2023, and you expect it in 2024.

For net worth accreditation, it includes everything you own—retirement accounts, rental properties, businesses, etc. Often it’s easiest to have your CPA or attorney provide a letter stating you’re accredited. But if you have funds in an account at Fidelity, Vanguard, or similar, you can just provide a statement to Parallel Markets for verification.

If you already work with a tax preparer or accountant, they can easily provide a letter on their letterhead confirming your accredited status, which can be the simplest option.

Speaker 4:
Great. One more question about becoming an investor: Do all investors need to be American citizens, or are foreign investors allowed as well?

Speaker 2:
We have investors from all over the world. It’s only slightly different based on your tax status.

If you already deal with U.S. tax authorities, you invest the same way as a U.S. investor. For non-U.S. investors who don’t deal with U.S. taxes, we have an offshore vehicle that shields you from U.S. tax obligations. There are no additional fees for using it, and we handle all the setup. You’ll still pay taxes to your home country’s authorities as required.

There’s slightly different paperwork, but our investor relations team (Henry can help) can guide you through it.

You can also invest via cash or retirement funds. About 20–25% of our investors use retirement funds through self-directed IRAs. If you have gains in the stock market in those accounts and want to diversify into venture capital, this is a great way to do it.

We partner with Strata, based in Texas, which manages billions in self-directed IRA money. They make it easy: you set up the account with them, and they invest on your behalf into Castor Ventures. Our partnership gives you a low-cost account specifically for Alumni Ventures investments.

Speaker 4:
Excellent. If we have time for one more, we’ll switch gears a little bit. Our last question has to do with our network. We have a network of over 600,000 people. What are some of the ways we’ve used that network to help our founders—introductions and other support?

Speaker 2:
Yeah, lots of stories there. It’s rather anecdotal, but it really shows the power of the network. Sometimes it’s with hiring.

We had one portfolio company looking for a Head of Operations. We put the word out to various folks. There’s an automated portion of that—posting the job on the job board. We scrape their job board and add it to ours. If you go to av.vc and scroll down to Careers, you can find jobs at portfolio companies. Right now, we have 1,300–1,400 portfolio companies on that job board, with 400–500 companies actively posting roles.

For this particular Cambridge-based company, we also reached out to our venture fellows. Venture fellows work with Daran and Mira on due diligence. They’re typically mid-career professionals volunteering for about a year to learn about venture. They help with community outreach and diligence. Fellows come from diverse backgrounds—medical doctors, software engineers, biotech executives, and more.

We tapped into the venture fellow alumni network, and a fellow based in Europe introduced us to contacts in Cambridge. We ended up with four or five qualified candidates for that role.

That’s just one example. When companies need board members, employees, or advisors, we can help. Sometimes we run go-to-market advice panels. Our CEO Services group finds experts for these panels. Anyone can sign up as an expert on our website, even if they’re not an investor.

Companies can pitch their product or funding ask to a panel of experts and get candid feedback. It’s low-pressure because we’re not the lead investor or customer—we’re just providing advice. Imagine having a CFO from a logistics company (your target market) on that panel. That’s valuable feedback.

We also run CEO dinners, usually once a quarter, sometimes more, in cities where we have offices. We bring portfolio company CEOs together.

At other events, we host both management teams and investors. Last fall in New York, we demoed the Status Pro vision headset—playing football in VR.

We also give founders airtime through our new podcast, which features interviews and founder advice.

There are many ways to network and provide support. Every VC says they have a great network, but with 600,000+ alumni who genuinely want portfolio companies to succeed, our network is truly powerful. It’s alumni rooting for alumni—that’s what our model is all about.

Excellent. Well, great way to wrap up. It’s now 48 past the hour, so we’ll call it a day. Thanks for all the questions. We’ll follow up with anyone whose question we didn’t answer live.

Once the webinar ends, you’ll see a quick survey on the screen. Please complete it so we can learn about your experience and keep improving. Thanks again—we can’t wait to connect with you on our next webinar. Cheers everyone. Thank you.