Masterclass Live! How We Evaluate Healthtech Startups

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  Speaker 1:
  Hello, and thank you for joining us today. My name is Ludwig Schultz. I’m one of the managing partners here at Alumni Ventures. I’m joined by my colleague David Shapiro. We welcome you to today’s webinar, How We Evaluate Healthcare or Health Techs at Startups Masterclass Live. We’re going to start slowly as folks join us in the room, and of course, we’re going to begin with some of our disclosures.

  This presentation is for informational purposes only and is not an offer to buy or sell securities, which are only made pursuant to the formal offering documents for the fund. Please review the important disclosures in the materials provided for the webinar, which you can access at avavfunds.com/disclosures as you can see here.

  Alright, with that out of the way, a little bit about what we’re going to cover today. We’ll begin with some introductions about us and our team. We’ll move on to an overview of Alumni Ventures so you have some context for where the Health Tech fund sits. Then a discussion on venture capital itself—what it is, how it works, why people have historically invested in it.

  Next, we’ll cover how we evaluate deals, what we consider—which is, of course, the core of today’s conversation. And lastly, how we ultimately invest on our investors’ behalf. With that, I’m going to hand it over to David to continue with the next couple of slides.

   

  Speaker 2:
  Thank you, Ludwig. Hello, everybody. Glad we could walk you through all of this. As Ludwig mentioned, we’re going to start with an overview of us and get into more detail from there. I’ll walk through the right side of the page, some accolades there on the left, but just so you all have a sense of who Alumni Ventures is and how we operate:

  We have raised a series of funds—lots of funds—totaling about $1.3 billion of capital. We have a really diverse and broad portfolio as you see in the next bullet: around 1,300 portfolio companies. This stems from what you’ll see on the left—we’ve been one of the most active venture funds in the country the past few years, particularly number one in 2022 and 2023.

  That’s our goal: lots of deals, staying steady. We’re not in and out of the market. We raise lots of funds all the time, so we’re never really in “fundraise mode” and unable to do deals. In particular, it’s been a very investor-friendly time over the past 12–18 months, so it’s been great to have capital to put to work and be active across the platform.

  We now have about 10,000 individual accredited investors with us, which is great—so thank you for all of that. And our overall active and engaged community members, our broader network, is about 625,000 folks. I’ll come back to that later on when we talk about how we get into deals. As you can imagine, it’s a huge and helpful asset.

  As you saw on the bottom—around 40 or so investment professionals—a subset of which are on the next slide. Thank you, Ludwig.

  So Ludwig and I both run teams—without too much detail: I manage Blue Ivy Ventures, which is the Yale-oriented ecosystem, as well as Nassau Street, which is our Princeton-oriented fund. Ludwig also has Columbia, Brown, and our two Texas funds. We’ve come together with our teams to manage the Health Tech Fund.

  All six of us that you see here have experience across the healthcare and health tech domain. We thought this would be a very sensible way for us to come together and curate the best of the best to populate into our health tech-focused fund.

  The six of us are the key decision-makers on which deals get in there, but we’re not the only ones sourcing the deals. We’re also supported by a broader set of folks we call Venture Scouts.

  These are people who aren’t part of Alumni Ventures as employees but are certainly friends and investors with us. I see one or two Blue Ivy investors on this slide—they’re in the ecosystem, they’re experts, and they’re willing to help us on two fronts: diligence and deal sourcing.

  These folks are a little more active as angel investors, plugged into the domain, seeing deals, and forwarding them along. This extends our network for both sourcing and vetting deals.

  This is also augmented internally: you’ll see here about 40 or so on the investment team. The six of us are further supported by colleagues across Alumni Ventures managing their own school ecosystems.

  The key point here is that as we populate and think about healthcare-related deals—med tech, healthcare IT, medical devices, even some life sciences—Ludwig, myself, and our teams aren’t the only ones sourcing these deals. It’s very valuable that deals can come from, for example, our Spike team (the Stanford ecosystem). They may come across a great company using AI in healthcare, or a life sciences company.

  Deals can be sourced from all of our teams, and we can cherry-pick which makes the most sense for the Health Tech Fund. Others may be more wellness-oriented and not a perfect fit. Ludwig, myself, and our teams curate from this broader source of deals, meaning we have many more to choose from as we populate the fund.

  With that, I’ll pause. Ludwig, anything to add before I turn it back to you?

   

  Speaker 1:
  No, I think you hit all the points. The beauty of the Alumni Ventures model is that we have a large team out there every day looking for opportunities, and David and I specifically look at health tech-related ones for this fund.

  Now, turning to a more general conversation about venture capital: What is it? Why have folks invested in it—especially institutional investors for a long time—and increasingly individual investors through vehicles like ours, with over 10,000 having joined us to date?

  The baseline question is: what is venture capital? The easiest way to describe it is this: all six of the companies—the logos you see there—originally had a venture capital investor involved in their business.

  Now, there’s no health tech company per se on this list, but venture capital is the environment these companies came from. When Jeff Bezos was thinking about the “crazy idea” of putting a bookstore on the internet, that’s when a venture capitalist stepped in to support him to the next stage of development.

  That’s the “idea stage” or “development stage.” We’ll talk more about the different stages of venture capital investing, but it’s important to understand:

  When we invest, whether in health tech or otherwise, we look for companies that start relatively small but can grow enormously in a 10–12 year window. These are companies scaling on unique technology—true for software, life sciences, and many health tech investments.

  Venture capital is about supporting young businesses to grow into substantial, credible companies in a short period.

  Now, the flip side: it’s very hard. Some companies won’t make it. That’s the nature of venture capital—some won’t achieve all the milestones needed for success.

  As an asset class, venture capital has to deliver financial performance. That’s one key reason institutional and individual investors have found it attractive.

  On this slide, you see dark green bars representing average venture capital returns across timeframes compared to dark blue for public market equivalents and mustard-colored bars for the Russell 2000 (young public companies).

  You can see consistently—regardless of timeframe—that venture capital returns have been strong. That reflects investing in businesses growing substantially.

  That’s the reason why venture capital has long been popular with investors.

  The second reason, equally important, is that venture capital is uncorrelated to public markets. For example, I’m based in New York City—whatever’s happening daily or weekly in public markets doesn’t immediately impact our venture-backed businesses.

  Over time, there may be an effect, but not day-to-day. Venture-backed companies are supported independently by venture capitalists based on their success. That allows them to grow until they can go public or be acquired.

  So, during public market volatility, venture capital can be attractive because of that lack of correlation.

  With that, I’ll hand it back to David.

   

  Speaker 2:
  Thank you, sir. “Mustard” was my answer—which I don’t know if you heard.

   

  Speaker 1:
  Mustard—that’s good. I like that.

   

  Speaker 2:
  So, how do we evaluate deals? Let’s get into the meat of this a bit more.

  There are three words that always come to mind for me when thinking about how we do deals. This goes back to when I joined eight years ago and talked early on with our CEO, Mike Collins: how do we create a consistent framework?

  We have a lot of teams doing a lot of deals. Here’s what it is not:

  It’s not Ludwig or David “playing cowboy,” saying “I feel like this is a good deal” and just deciding.

  In fact, it’s very process-oriented. Alumni Ventures is highly process-oriented, data-driven, and quantitative in our analysis of how we do deals. To some degree, we have to be—because we have many teams.

  Speaker 2:
  So, I almost think about it as: how do we talk the same language? How do we compare more apples to apples? We have a scorecard that we formed very early on for that purpose. I think of it as a lingua franca so that we all can understand and look at deals through a similar lens.

  We’re going to walk you through that as well and get into the elements of the scorecard. But what it also does is help us manage a big funnel—we all see tons of deals. I’ll describe it a little differently:

  We might see 40 or 50 healthcare deals a month across the teams, or maybe literally nine, and this is my answer to “how do we not boil the ocean?” How do we spend commensurate time and get into the details?

  Let’s say it’s 40 or so. There’s a quick vetting process you can do on 15–20 deals—we can get it down to 20 as a team. Those don’t make sense, don’t fit our model, or don’t have good lead investors.

  The next key question—which is really essential—is: do you have a term sheet? We are a co-invest model, as many of you know. That means before we can really activate, dig into diligence, and drive on it, we need to know: do you have a term sheet? Do you have a lead investor? Is it an existing or new investor?

  Either way, we can get our arms around that, but that’s critical because a key element in our co-invest model—which we’ll walk you through shortly—is the round composition and the deal.

  It’s almost as important as “what does the company do” and “is the market growing” as the other diligence items we work on. That quickly boils 20 deals down to 5 or 6 per month that have a term sheet and a lead. One or two might not fit our model and scorecard.

  So we’re really managing 3 or 4, and bringing about 1—maybe 2—to our investment committee per month. That’s the quick way we go from 50 deals a month to one done. Those are the key elements we lean on—particularly the presence of a term sheet and how that fits our model—which helps us vet deals effectively.

  With that, we’ll get into a bit more detail coming up.

   

  Speaker 1:
  One thing I’ll just add, David: it’s important to recognize that there are multiple sets of eyes on any given opportunity.

  The slide says “two sets of eyes,” but really it’s many. David and I may get very excited about a particular opportunity, but we then take it into that scorecard format David described—a specific numerical scoring of an opportunity—along with a due diligence report that’s randomly assigned to another team.

  That team is responsible for evaluating the opportunity and giving us feedback—saying, “Hey, you missed a couple of things,” or “This is a great opportunity,” or “You missed a risk,” or “I know a founder you should talk to.”

  That’s one of the benefits of having a large team across the country, operating in different environments.

   

  Speaker 2:
  Absolutely. Thank you, Ludwig. We often refer to it as the wisdom of small crowds. It’s not two or three people making decisions, but it’s also not 20. It’s not a Roman gladiator scenario where one person decides.

  We usually get six to ten scores from colleagues, investment committee members, and sister funds, which gives us a well-rounded picture.

  Ideally, we want those scores to be somewhat close. If there’s a wide range, that tells me we might not understand that deal as well as we should. That’s how I interpret score variances.

  Now, one of the categories—we have four total and will walk through each—is deal dynamics.

  Most people think of the “competitive landscape and market” first. Yes, we’ll talk about those, but deal dynamics is really critical.

  You’ll see three key elements: round composition, valuation terms, and runway.

  Round composition is extremely important and very telling. One of the key things we want to avoid is adverse selection—why are we so “lucky” as a small fund to see this deal?

  It’s not reading tea leaves exactly, but it is reading between the lines. For example:

  • Is the current round being led by a new investor or an existing investor?

  • If existing, is that investor doing a little or a lot?

  I’ll use Oura as an example. Many of you know Oura—it’s the ring I’m wearing here, a sleep tracker. Ludwig and I were both in that deal together, and they’ve done phenomenally well.

  We got into that deal during the Series B in 2018. As the round was coming together, I got to know the CEO, Harriet. They already had a term sheet.

  Firms like Forerunner Ventures—a top-tier consumer-facing fund—were leading. Almost everything they do is consumer. They’re experts, driving businesses, helping them out. Gradient Ventures (Google’s analytics-focused venture arm) was also in the deal.

  The Series B was $28 million. If Forerunner had only done $3M, Gradient $1M, and they were looking for others to fill in the rest, that would have been a signal of weak conviction.

  But instead, Forerunner did $10M (and would’ve done more), Gradient $8M, and Marc Benioff put in $1–2M. That’s $20M of the $28M covered by new money from strong leads.

  That’s what I call “backing up the truck.” These new investors did full diligence, vetted everything, wrote big checks, and would have put in more.

  That round composition fits our model very well.

  Valuation terms are more natural to evaluate. We don’t set valuation, but we assess if it’s overpriced or a good value.

  The runway is also critical. As a small fund, we need at least two years (24 months) of runway—maybe 18 in the past, but ideally 24 now—so companies can hit milestones.

  If, hypothetically, the round were $8M and Forerunner did $3M, that would have been weaker for a consumer-facing company that needed heavy marketing spend.

  This is how we look at deal dynamics and assess these key elements.

   

  Speaker 1:
  To build on that, David, as you touched on earlier: for those who’ve worked with us over different years, you may have noticed a shift in these terms recently.

  The amount of activity, valuations, and whether terms are investor- or company-friendly—they shift year to year.

  Right now, valuations have come down, and terms are more investor-friendly. That’s another reason we generally recommend thinking of venture investing not as a one-off for one year, but something you participate in over multiple years as you build a properly sized venture portfolio.

   

  Speaker 2:
  Category number two is the lead investor, which is also very important in our model.

  We’ll use a different deal—Pendulum—as a good example in a moment.

  What are the elements of a lead investor that make sense for us and our model? These are all scored, with metrics and numbers for each.

  This category is out of 14 points and gets more weight than, say, a runway. A score of 12–14 is reserved for the top quartile of venture capital—firms like Sequoia or Khosla Ventures. That’s where you get a 13 or 14—they’re the best of the best, and we’re privileged to invest alongside them.

  Others may be domain experts, which also scores well.

  We also consider the specific partner doing the deal:

  • Is it a senior partner or a junior partner doing their first deal?

  • What’s their track record in this space?

  And conviction:

  • If a big firm like Andreessen Horowitz has billion-dollar funds but only writes a $1M check, how convicted are they?

  This shows up a lot with existing investors. We need to determine:

  • Is it a small check from them because their old fund has no capital left?

  • Or are they being cautious and not backing up the truck?

  Pendulum Therapeutics is a good example. They’re focused on the microbiome—probiotics and microbiome science—and have been crushing it.

  This was a growth round. We got to know the company, and a big factor for us was the investors around the table:

  • It was seeded by the Mayo Clinic, which did extensive clinical work proving out their approach.

  • True Ventures came in early.

  • Khosla Ventures also invested early.
    Speaker 2:
    Sequoia led the B round and then led the C round. They opened up the round internally about six months before we invested last year around this time. They really backed up the truck—Sequoia did something like $15M of a $25M or $28M round as an insider. That’s a very strong signal that they liked the company and wanted to put more capital to work.

  They opened up the round and let us in because we could help with our network and in ways that were different and augmentative to the lead investor.

  What’s critical for us is that we’re investing alongside truly some of the best in the business—firms like those listed here.

  Zooming out, you see we’ve invested with a lot of top firms. It’s in small print, but for example:

  • We’ve done about 32 deals with Sequoia,

  • 40 with Khosla Ventures,

  • 21 with Kleiner Perkins,

  • and so on.

  These are the firms we invest with regularly. That’s really the key.

  Now, to tie this back—it’s implicit, but I’ll make it explicit. It goes back to what Ludwig pointed out earlier with that green and mustard chart:

  Particularly in venture capital, but especially in the top quartile of VC, performance has been far above industry averages—20–30% IRRs from firms like these.

  So our goal is to get into their deals, invest alongside them, be helpful, and we’ve seen that pay off in our returns as well.

   

  Speaker 1:
  Exactly, David. That’s an important point.

  In some respects, the way folks can recognize this is that David and I are not running around garages trying to be the very first and only investors in a company.

  We’re leaning into investing alongside firms like these to benefit from their expertise, their networks, and their deep pockets.

  There are a lot of advantages that come from investing alongside such established players.

  Shall I continue with number three?

  So, category number three of this scorecard gets into things that may come to mind quickly when evaluating a company: how are they performing? How’s their execution?

  The first piece is customer demand:

  • How much revenue do they have?

  • How much traction have they shown?

  We use revenue and other industry-relevant metrics to gauge success. We want to know where they are on their journey—how much they’ve proven, and how much of the market has actually opened its wallet for them.

  There’s nothing like revenue to indicate market need.

  This varies by stage:

  • Seed stage: businesses may only have pilot revenue or even free pilot users. We look at who those customers are and what that early traction looks like.

  • Early stage (Series A/B): companies are usually in the single to double-digit millions of revenue. We evaluate how fast they’re growing and how much more market opportunity they can capture.

  • Growth stage: double to triple-digit millions of revenue. At that point, we assess their growth rate and what comes next—acquisition, IPO, or further scaling.

  We’ll cover diversification in the Health Tech Fund later, but that’s the preview.

  The second piece is the business model: is it scalable?

  This is critical to venture investing. Referring back to that earlier slide with Apple and Amazon—venture is about businesses that can grow quickly.

  Can the business double or triple revenue year after year as it develops? That’s hard to achieve.

  David, I think you’d agree: one of the frustrating things is that we regularly see really good businesses—solid, interesting ones—but they’re not going to scale fast enough to reach double- or triple-digit millions in the timeframe required for venture capital.

  Good businesses aren’t always a fit for venture.

  Another factor is the profitability model:

  • Can this business scale profitably?

  • Are the gross margins strong enough to create investor returns?

  Next is momentum:

  • How is the business developing?

  • What’s happened in the last year or two?

  Are they hitting an inflection point with bookings accelerating, or are they meandering without clear direction?

  This helps us anticipate what’s likely to happen next.

  We also look at capital efficiency:

  • How much money have they spent to reach their current stage?

  Some companies raise and spend very little yet achieve great results. Others require heavy CapEx or significant go-to-market spend.

  We assess efficiency relative to their industry subset.

  Lastly, competitive moats—differentiation:

  • How can this company compete against incumbents and other innovators?

  • What’s unique about the team, technology, or approach that helps them defend their position, maintain margins, and sustain growth over the investment period?

  A quick example: Ford, which we invested in first in June 2022.

  At the time, they hadn’t launched their business yet, so we didn’t have revenue as a customer demand indicator.

  But we were comfortable because the team had strong prior startup experience.

  By December 2022, they launched and began growing rapidly. By the end of 2023, they were already generating millions in revenue—on a fast growth trajectory with significant demand.

  These are exactly the kinds of outcomes we like to see when evaluating a team and opportunity, and later confirming that they can deliver on their goals.

   

  The next major scorecard category is the team.

  You can never underestimate the importance of the team in a startup.

  • At the seed stage, it’s absolutely critical.

  • At the early stage, it’s still extremely important.

  • Even at the growth stage, key decisions about priorities and resource allocation determine success.

  Evaluating whether a team can successfully build and scale a business over time is essential.

  We place great importance on the CEO, who ultimately drives the business direction. Some of the factors we assess include:

  • What have they done in the past?

  Speaker 1:
  As I described in the previous example, we do have teams that have done this three times in the past, or four, or even seven times successfully—or not successfully—but in every case they’ve learned something and developed. That gives us some comfort that the CEO and the team around them can build this next business.

  Of course, we’re looking at context: if they built a business in a completely different industry with a different model and go-to-market approach, it’s not as relevant as if it were directly related. But there are amazing CEOs who can jump from one industry to another and apply their skills to be successful.

  Prior exits are always a positive indicator because they show a founder can take a company from founding through to a successful exit—selling the business to another entity—which proves they can manage the entire journey.

  The team around the CEO is also very important. Same logic applies: what have they done? Have they experienced startup environments before?

  One common misnomer is assuming that someone from a large, successful company will automatically excel in a startup. But succeeding in a giant corporation and succeeding in a startup often require very different skills.

  A good example here is Precision Neuroscience, a company we initially invested in back in 2021 alongside B Capital, Seedview, and Draper.

  Precision Neuroscience operates in the brain-computer interface space. With current advancements in physical tech and AI, it’s now possible to deeply understand brain activity, which opens the door to solving problems like paralysis and dramatically improving lives.

  In this case, the Chief Scientific Officer—a neuroscientist and electrical engineer—recognized these possibilities. He was also one of the original founders of Neuralink (one of Elon Musk’s ventures). He and several colleagues left Neuralink to create Precision Neuroscience because they believed there was a better approach.

  Indeed, on many metrics, I’d argue Precision is ahead of Neuralink.

  This illustrates why the team is such an essential part of our evaluation when we invest.

  David, anything you’d like to add?

   

  Speaker 2:
  Nope.

   

  Speaker 1:
  Okay.

   

  Speaker 2:
  So, moving on to how we invest—adding a bit more color here. Beyond the scorecard, how do we actually get into deals? How do we get access?

  I talk to CEOs all the time, and from day one I’ve used the same six words: low friction, flexible check, large Rolodex.

  That’s our approach:

  • Low friction: As a co-investor, we don’t ask for special rights, side letters, board seats, or board observer roles. For entrepreneurs trying to close a round, that resonates—they just want a straightforward yes or no. We’re not there to negotiate heavy terms. We don’t even bring a law firm to the table to renegotiate—we know the docs, we review them quickly, and move forward.

  • Flexible check: We don’t have an ownership minimum. We can adjust our check size—scale down if there’s less room or scale up if warranted. Our model allows flexibility by leveraging sister funds or focus funds to expand when needed.

  • Large Rolodex: This is arguably our biggest advantage. With 625,000 alumni and community members (including everyone on this call), we can offer immense value to CEOs.

  We augment the lead investor’s work:

  • The lead handles board work, comp committees, CFO hires, etc.

  • We can surface candidates, provide business development connections, and open doors.

  For example, I recently sent a list of 40 potential partners to an early-stage cybersecurity company. We have experts in our network willing to connect directly with these startups.

  For consumer-facing products like Pendulum, they leverage our network to spread awareness.

  In short, our network is incredibly valuable as a differentiator, which helps us gain access to these high-quality investments.

   

  Speaker 1:
  David, can I offer a counterpoint?

   

  Speaker 2:
  Okay.

   

  Speaker 1:
  Not exactly the opposite of what you said, but I think it’s important to clarify something:

  While we emphasize lead investors and investing alongside them, we’re not just waiting outside their offices hoping they throw us a bone.

  That would be risky because even top-tier firms do deals that aren’t great. Those aren’t the deals we want.

  We only want to do the great ones.

  So, our relationships are with founders, not just the lead investors. We want strong, direct connections with founders so we can help them, as David described.

  And this is a challenge to everyone listening—whether you invest with us or are just part of our community:

  • We want you to reach out if you can help one of our companies.

  • We may reach out to you to ask for help.

  This makes a huge difference and keeps the network functioning effectively.

   

  Speaker 2:
  To build on that, Ludwig—and then we’ll move to the next slide—this business was founded on two words that remain as true today as they were in the beginning: better together.

  We believe we can all invest better together than individually.

  That means helping in diligence, sharing expertise, sourcing deals, and supporting portfolio companies.

  Most venture firms prefer fewer investors, leaning on big institutions.

  We actually prefer more—hundreds of investors.

  It creates a more robust network that we can tap into for everything from sourcing deals to adding value to startups.

   

  Speaker 2:
  Alright, let’s shift to health tech specifically.

  What does the portfolio look like?

  We aim for diversification. This is a focus fund within our broader Alumni Ventures ecosystem…

  Speaker 2:
  It’s diversified across sectors, but even more importantly, within health tech itself we’ll be quite diversified across major secular trends we’re spotting and seeing.

  On this slide, you see a list of focus areas as well as companies aligned with these trends.

  For example, under health and wellness, you’ll see Oura listed. We have several investments there. There are also opportunities in clinical decision support and life sciences.

  I’ll add another category not shown here: a concept I call Medicine 3.0. I wish I could take credit for that term, but it comes from Dr. Peter Attia—fantastic physician turned podcaster and bestselling author.

  I recommend checking him out; his podcast is very technical and science-focused, which is great.

  Medicine 3.0 is about being proactive in healthcare.

  • Medicine 1.0: Think bloodletting in the dark ages.

  • Medicine 2.0: From World War I until now—treating health problems after they occur. That’s modern healthcare today.

  Medicine 2.0 doesn’t go away—we still need emergency care if you have a heart attack. But Medicine 3.0 focuses on longevity and chronic wellness management—bending the health curve earlier.

  We expect Accountable Care Organizations (ACOs) to adopt these approaches. As individuals, we’ll also take more ownership of our care.

  Medicine 3.0 might show up in:

  • Cancer early detection: We’ve made two investments already in this area to help detect cancer far earlier.

  • Wearables and data-driven health: Five or six years ago, none of us had sleep tracking or health insights from wearables. Now it’s commonplace.

  These are just a few of the trends we’re watching closely as we invest in health tech.

   

  Speaker 1:
  This may be slightly out of deck order, but it’s worth mentioning as you consider investing with us.

  Our model is to invest alongside strong existing lead investors and build diversified portfolios that way. That’s been our approach all along—enabling us to create successful portfolios.

  Recently, CB Insights, a leading VC industry analyst, named Alumni Ventures one of the Top 20 Venture Firms in North America.

  On the slide, you’ll see us listed alongside other top firms. The logic follows: if you invest alongside leading firms, your portfolio performance should align with theirs.

  CB Insights’ recognition validates that our model is delivering results—placing Alumni Ventures among the top 20 in North America.

   

  Speaker 1:
  Now, if this interests you—if you think your portfolio could benefit from diversification into venture capital, particularly health tech, and you’re comfortable with the timeframes and illiquidity—here’s how it works:

  • You can invest millions if you wish; many do.

  • Or you can invest as little as $25,000 to fit your portfolio.

  • Investments can be made through:
    • Bank or brokerage wire transfers

    • Trusts

    • Retirement funds (especially IRAs)

    • For non-U.S. citizens or green card holders, we offer vehicles that don’t require a U.S. tax ID.

   

  Regarding fees:

  Venture capital has a different fee structure than many are used to.

  • Management Fee:
    • We charge 2% annually against committed capital for 10 years, totaling 20% of your committed capital.

    • For example, a $300,000 investment has $60,000 set aside for fees upfront. The remaining $240,000 is invested into portfolio companies.

    • You’re never invoiced again; the fee covers the entire fund lifecycle.

  • Profit Share (Carried Interest):
    • On any profits generated, you receive 80%, and Alumni Ventures retains 20%.

  • Single Capital Call:
    • You can join anytime during fundraising. Once you sign and fund, your capital is committed for the duration.

  The funds have a 10–12 year lifecycle.

  This isn’t like public markets where you can trade daily. We invest your capital into startups that use it for growth, salaries, infrastructure, etc.

   

  There’s also a potential tax advantage under the Qualified Small Business Federal Tax Exemption, on the books for decades.

  This incentive encourages investing in innovation, which is effectively what venture capital is.

  • For one or more of the underlying companies in the Health Tech Fund, you could achieve 100% federal and state capital gains tax exemption up to $10 million per company.

  • This applies to cash-equivalent investments (not retirement funds).

  If this occurs, we provide all necessary documentation (e.g., K-1s) for you or your accountant.

   

  We encourage you to learn more before committing:

  • Visit avbc.com/healthtech to:
    • Log in

    • Access legal documents

    • Read materials

    • Watch this webinar replay (available in a week or two)

  • If you decide to proceed, you can complete the process online in minutes (though we recommend taking your time to review everything).

  For questions:

  • Email [email protected]

  • Book a one-on-one call with a senior partner like Stacy Saw, Jim, or Dan to discuss portfolio fit or clarify any details.

  Their calendars are available via the website, or you can email us to arrange a call.

   

  That’s how you can move forward if you’d like to learn more.

  We’ve received a number of questions during this session, so let’s spend the remaining time answering as many as we can.