An Introduction to Strawberry Creek Ventures

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• Where is the transcript for this webinar?

  Speaker 1:
  Welcome everyone. We really appreciate you taking time out of your Tuesday to join us. I’m Matt Caspari, and I’m the Managing Partner of Strawberry Creek Ventures. Before we get started on the presentation, we’re just going to begin by reading a few legal disclosures.

  So we’re speaking today about Strawberry Creek Ventures, our parent company Alumni Ventures, and our views of the venture capital landscape. 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 important disclosures and the materials provided for the webinar—you can access those at avfunds.com/disclosures.

  A few quick housekeeping items: you will not be on camera and will be muted throughout the entire presentation. Within a couple of days of the webinar, we’ll send out an email that will include a link to our data room, which has additional information on our fund. It will also include a link to book time directly with our team if you’d like to speak with us. We’ll also add those links to the chat so you can take a look at those materials as we go through the webinar. Feel free to send questions as we go. We’ll take a Q & A at the end, and if we don’t get to your specific question today or if it doesn’t seem relevant to the whole audience, we’ll circle back with you afterward.

  Just in terms of setting the stage for the meeting today—which will run a maximum of about 45 minutes—we’re going to cover a few key areas. First, we’ll start with some background on the team. Then we will discuss the case for diversifying into the venture capital asset class. We’ll also share some context on Alumni Ventures, which is the parent company under which Strawberry Creek Ventures falls, and we’ll explain how we’re connected. Then we’ll talk about the specific opportunity to invest in Strawberry Creek Fund Eight.

  So I’ll start by talking a bit about why Strawberry Creek is at a high level. First, our mission at the firm level of Alumni Ventures is to democratize access to venture capital. So we’re here to help individual investors access this exciting asset class, which historically has had really strong returns—but it’s been extremely difficult to access.

  We do this in a way that’s very simple for investors. You write one check, we take that capital, invest it roughly over the next year, and build you a portfolio of 20 to 30 venture-backed companies. As we go through the presentation, we’ll get into how we construct that portfolio. We’ve done this successfully for the first seven funds of Strawberry Creek Ventures, and we’re excited now to be launching and starting to fundraise for Fund Eight.

  I mentioned that we’re part of Alumni Ventures, which has some massive benefits. We’ll highlight some of these as we go through the presentation. But just to start off, I’ll let you know that Alumni Ventures is America’s largest venture firm for individual investors. We have over a billion dollars in total capital raised to date across our different Alumni Ventures funds. And our approach to venture capital at Alumni Ventures is network-powered venture capital.

  We build communities around alumni networks. We’ve done that really successfully, and we’re very excited to be leading the fund for Strawberry Creek Ventures, which is our UC Berkeley-centric fund. We are one of the largest communities within Alumni Ventures, with over 30,000 people—so really excited and proud of that.

  Our core community is UC Berkeley. We’ll get a little more into our backgrounds on the next slide, but we get to spend our time around the UC Berkeley ecosystem, where we’ve had very long-term ties. And finally, our investor base is very Berkeley-centric. That said, we are inclusive and welcoming to anyone interested in entrepreneurship and innovation who wants to be part of this community, which is really powerful. PitchBook ranked the best schools for startup founders, and Berkeley came out number one for public schools. So—Go Bears.

  Just a little more about my background. I’ve had long-term ties to Berkeley. I graduated from the full-time MBA program back in 2006. While I was at Haas, I was focused on entrepreneurship and started a venture-backed company called Aurora Biofuels that was based on technology we licensed from the university. We won the business plan competition the year I graduated from school and went on to grow that company to well over 100 employees, raising over $100 million in capital, and eventually sold the business to Reliance Industries—a Fortune 100 conglomerate out of India.

  Over the years, I’ve maintained my ties to Berkeley. I’ve been a long-time mentor and advisor to many Berkeley entrepreneurs, and it’s really exciting to be in a role here at Strawberry Creek Ventures where I can invest in and support other entrepreneurs and really do that with a focus around the Berkeley ecosystem.

  On the investing side, I’ve got broad experience investing across different stages and sectors of venture capital. Prior to my current role, I was an investing partner at Spike Ventures, another Alumni Ventures fund. While I was part of that Spike team, we made over 20 investments, all the way from early seed-stage investments through later-stage Series D. I also bring a lot of operating experience to my investing. I’ve been a two-time venture-backed founder and CEO, which is quite helpful as I talk with other founders and CEOs and bring a lot of founder empathy to my investing. I also have operating experience at scale—I spent over five years at Nike, where I was a leader of the innovation team and oversaw a portfolio of innovation projects. We were able to take some of those to a global scale.

  Super excited to be joined today by Carl Cho. I’ll hand it over to him to introduce himself.

  Speaker 2:
  Thanks, Matt. Just briefly on my background—I’ve always found myself at the crossroads of tech and investing. Growing up in Korea, I was constantly surrounded by cutting-edge tech and had a natural love for numbers. Then my journey took me to Canada, where I pursued my bachelor’s degree at the University of Waterloo, and that’s where I caught the entrepreneur bug and honed my investing skills.

  After graduating, I got my CFA and worked as a buy-side analyst and fund manager focusing on the tech sector. That passion for tech and investing naturally drew me to the Bay Area and UC Berkeley. I was in the Class of 2016, full-time MBA, where I immersed myself in the startup world—taking on leadership roles at Haas Tech Club and Investment Club, mentoring at YEA and Berkeley SkyDeck, as well as hosting the Global Social Venture Competition.

  Beyond academia, I’ve gained valuable professional experience as an investment banker at J.P. Morgan. Then I led and executed various M&A investments and strategic initiatives at tech companies such as Riverbed Technology and Upwork, prior to becoming a venture capitalist.

  More importantly, I was a Venture Fellow for Strawberry Creek Ventures a number of years ago, where I first witnessed the power of the network-driven VC model of Alumni Ventures. And while I was working for my previous venture fund, I had the good fortune of meeting Matt, who inspired me to join him in our shared mission of serving the Berkeley community.

  We’re super excited to be a part of this dynamic ecosystem and really looking forward to the opportunities in front of us.

  And now let me start by painting an overall picture of venture investing. Venture has historically had very strong performance, outperforming public markets over 5-, 15-, and 25-year periods. And interestingly, VC is largely uncorrelated to the public markets, making it an effective tool for diversifying your portfolio.

  These days, a substantial amount of value is being generated in private markets. There are several reasons for this shift. First, there are fewer public companies today—there are less than half the number of publicly traded companies as there were 25 years ago. And companies are staying private longer.

  For example, Amazon went public in 1997, three years after it was founded. Market cap: Amazon has gone up over 4,000 times in the public market—it’s valued at $2 trillion at this time. By contrast, Uber took a decade to go public, and the stock has less than doubled since the IPO a few years ago. The $100 billion in value creation was mostly in the private markets, benefiting early-stage investors and venture firms.

  So the value creation traditionally has been happening for a very small circle of insiders. However, we’re determined to change that by offering access to individuals like yourselves.

  Let me emphasize a few key aspects of our scale and growth. As Matt mentioned previously, we’re America’s largest venture firm for individuals, serving over 10,000 clients who entrust us with their venture investments. We’re the most active venture investor in the U.S. and the third most active globally in 2022 and 2023, according to PitchBook.

  We’ve raised over $1.3 billion and invested in over 1,300 companies. Our team now consists of 130 members, 40 of whom are on the investment team. We have offices in California, New York, Boston, Chicago, Austin, and Manchester—covering various regions nationwide.

  I’ll hand it back to Matt to talk about historical performance of our funds.

  Speaker 1:
  Yeah, great. Thanks Carl.

  Just diving a little deeper into performance—looking at how we perform relative to other venture capital firms—you can see that Alumni Ventures is a top quartile performer against venture capital peers on a very important metric, which we call DPI.

  So DPI is “Distributions to Paid-In Capital.” This is the money that you get back into your pocket. Again, as I said at the beginning: if you participate in our fund, you write one check into the fund, and we anticipate that you’ll receive many checks back over the life of the fund. DPI increases as exits are achieved and capital is distributed back to our investors.

  Relative to other venture firms that are out there—including Andreessen Horowitz, Sequoia, the whole world of venture—we’re in the top quartile of performance, and we’re really proud of that.

  The other metrics you can see here are Alumni Ventures funds relative to the Russell 2000, and we break that out by years. You can see that as these investments have time to bake and mature, the Alumni Ventures funds’ returns start to quite significantly exceed the public market benchmarks.

  So again, venture has historically performed well relative to public markets, as Carl was talking about, while providing really strong diversification benefits relative to public markets.

  Speaker 1:
  And our approach to venture capital investing is as a co-investor. That’s a core part of our strategy that has driven a lot of our performance—co-investing alongside lead investors who have significant experience at the particular stage and sector they’re investing in.

  So this means that we do not lead rounds, we’re not taking board seats, we’re not negotiating terms. We’re investing alongside a lead investor into those companies. We’ve done that successfully for our first seven funds at Strawberry Creek Ventures, and we’ll continue with the same strategy going forward.

  Here you can see the logos of some examples of the types of firms we like to invest alongside and have had a lot of success investing with in the past.

  Now is potentially what we’re calling a “golden age” of venture investing. We have some data here that was pulled together showing when the venture markets are investor-friendly and when the markets are startup- or founder-friendly. You do go through these cycles in venture where the leverage—the negotiating power—moves from one side to the other.

  You can see that from 2015 through around 2020, the market was relatively neutral. Then as venture valuations went up significantly, we saw a bit of a bubble forming. As we moved through 2021 into early 2022, the leverage really shifted to the founders. Terms were not great for investors, deals were getting done very quickly—not the best environment. I think when we look back historically, those vintages may be challenging for strong venture returns.

  What we’ve seen more recently is a significant swing back to investor-friendly valuations and terms. So we feel really good about these current vintages. We think we’ll look back on 2024 and 2025 as likely to be good years to be deploying venture capital. So we’re excited about that.

  Now I’ll pass it back over to Carl to talk a bit about how we actually build these portfolios—again, of 20 to 30 companies—and how we build them with diversification in mind.

  Speaker 2:
  Thanks, Matt. So our investment strategy really tries to offer diversification across stages, sectors, and geographical regions. This approach helps shield you from potential risks associated with inflated valuations and downturns in any given sector, region, stage, or investment year.

  Our strategy has remained consistent across all funds, from Fund One to Fund Seven.

  In terms of sectors, we invest across a broad range of areas. We target industries like AI and ML, health tech, and climate tech—some of the sectors poised to redefine our future. We seek to align our investments with the most innovative sectors in the venture world.

  Regarding investment stage, about two-thirds of our investments go into seed and Series A/B stages, with the remaining third allocated to growth-stage companies. Although early-stage investments come with higher risk, they can potentially yield outsized returns. As for growth-stage investments, they often originate from our existing portfolio companies that have demonstrated promising performance. We already have established relationships with some of these companies, allowing us privileged access to their competitive rounds.

  Geographically, around 50% of our investments are in California, alongside allocations in other places like New York, Boston, and some international locations.

  So we invite you to invest in Strawberry Creek Ventures Fund Eight, where we will assemble a diverse portfolio of venture-backed companies powered by the strength of our network. But the invitation really extends beyond compelling financial reasons. By investing in the fund, you also support the future. You’re investing in innovation and entrepreneurship—fostering the growth of numerous promising ventures, including those founded by Berkeley entrepreneurs.

  We often get the question: how do you access the best deals in such a competitive environment? The answer again goes back to our network.

  We practice a truly network-powered venture capital approach that is pretty unique. Our alumni-centric method contributes significantly to our success, serving as the “secret sauce” in Alumni Ventures’ model.

  The value of our approach is undeniable, considering the scale and size of our network. Founders get immediate access to a network of over 13,000, and we’re very helpful with raising the next round—with an amazing Rolodex of other VCs, as you’ve seen previously.

  Through our CEO Services, we put our vast network to work. We assemble expert networks, assist with business development, and offer introductions to various people and organizations tailored to each startup. This network-fueled approach is an essential aspect of how we operate.

  And Matt, we’ll highlight some of the portfolio companies we’ve invested in previously.

  Speaker 1:
  Yeah, great. Thanks, Carl.

  There’s an amazing group of companies in the Strawberry Creek Ventures portfolio. You can look at all of the ones that are out there publicly on our website—so definitely, if you have time, I encourage you to do that to get a sense of the types of companies we’ve supported in the past.

  There are over 100 companies that we’ve invested in across the different Strawberry Creek vintages. We pulled together five here just to give you a sense of the breadth of the different types of sectors we like to invest in and also the co-investors we’ve partnered with across these companies.

  Just given the amount of time we have, I won’t go through these today specifically, but again—we’ll follow up with a recording of the webinar. If you have time, I definitely encourage you to check out the websites of these companies, see the founders behind them, and the other investors. I think these are good examples of the types of companies we’ve backed in the past.

  Let me talk a little bit about terms and logistics. If you do choose to join us as an investor in Strawberry Creek Fund Eight, it’s a very simple, easy-to-understand, transparent process.

  In terms of fees, there’s the equivalent of a 2% management fee over the 10-year life of the fund. So 20% of the investment goes toward fees. There’s also a 20% profit share—that’s after we’ve returned all of the capital back to you, including the fees.

  This fee structure has worked well historically for us. Again, over 10,000 investors across the Alumni Ventures network, with well over $1 billion in assets across those funds.

  The minimum investment amount in Strawberry Creek Fund Eight is $25,000—although a lot of people do choose to go much higher—and the maximum is $3 million.

  I encourage people to think about their long-term, patient capital. This is an illiquid asset class. It takes time for these investments to mature. So—we’re not financial advisors—I encourage you to talk with one, but it’s often helpful to think about a percent allocation of your long-term patient capital that you might want to deploy into venture capital.

  That’s it for the main content. I think we’ve had some questions come in along the way, which we appreciate. So we’ll flip through some of those now and cover them.

  Also, definitely encourage you to book time with our team. We have some senior partners who are available to hop on a quick call with you, talk about your individual situation, and answer more specific questions if we don’t get to yours today.