Taking a Closer Look at Alumni Ventures’ Seed Fund
Our Seed Fund invests in promising seed and pre-seed startups spanning a wide array of sectors and geographies
Our Seed Fund allows accredited investors to own a diversified portfolio of ~20-30 venture-backed pre-seed and seed-stage companies — rigorously vetted and scored by our experienced teams. Each vintage features high-tech game-changers and disruptive business models from a variety of sectors and geographies.
Young startups are often at the cutting edge of innovation, and they typically offer attractive valuations and significant potential upside. While VC funding has slowed down in 2023, seed valuations remain strong — and seed has done well in various markets, including in past recessions. See below for a deeper look at our investment thesis and outlook for this year’s Seed Fund.
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Reserve Your Spot in Seed Fund 7
Alumni Ventures’ Seed Fund is one of our most popular Focused Funds, and we are already seeing strong interest in this year’s vintage. We recommend securing a spot promptly.
Max Accredited Investor Limit: 249
Deadline to Join: December 31, 2023
What’s the 40,000-foot overview of AV’s Seed Fund?
Our Seed Fund targets ~20-30 pre-seed and seed-stage investments for each vintage. The fund is also diversified in terms of stage, geography, and investor syndicate, ensuring broad coverage of opportunities and a disciplined approach to portfolio diversification. Finally, our Seed Fund maintains ~25% reserves for follow-on investments, meaning we’re able to support strong companies in their downstream rounds.
Can you explain more about the opportunities in seed investing?
Venture as a whole is a high-risk, high-reward asset class, and this is especially true of pre-seed and seed investments. While failure is more common, and product-market fit may not be well established at this stage, valuations are typically lower, and — with that — the opportunity for outsized return is higher. As investors, we constantly balance risk against entry price and upside potential. While we’ve seen a decline in late-stage investing in 2023, seed-stage investing continues to show promise — particularly with startups focused on generative AI, esports, and the future of work
Additionally, early-stage investing has experienced significant growth from a long term view. More than 23,000 seed startups received funding in the past decade, compared to just 3,200 companies between 2006 and 2010. In that timeframe, the average seed round has grown from $1.7 million to $4.6 million. At Alumni Ventures, we believe in diversifying, buying quality, and not trying to time the market. We believe that compounding returns over long periods of time with consistent investments is the secret sauce of building wealth.
Seed Investing Case Study: Uber and AirBnB
Alumni Ventures Managing Partner Ludwig Schulze uses Uber and Airbnb as examples of venture-backed companies that have done extremely well, from seed round to IPO.
See video policy below.
What kinds of companies does the fund consider for investment?
We aim to identify a diverse set of quality investments at reasonable terms for our investors. It’s important to understand that, as a seed fund, breadth and depth are essential. Our previous seed investments have included everything from AI-powered real estate platforms to renewable energy solutions for agriculture.
Some considerations for us:
- We like to invest in companies with strong founders/teams — the earlier the stage, the more important the team. Therefore, founder/market fit is critical and, ideally, we like to see previous startup experience/success on management’s resumes.
- Our model is to co-invest behind seed-experienced VCs. Even better, we like to see a strong syndicate of investors who can help shape strategy and products/services, assist in recruiting, and make valuable introductions.
- Ideally, the company has existing paying customers — and/or the potential for strong unit economics with the prospect for high margins and high scalability.
- We also like companies that are solving difficult problems, so there is a technical complexity/IP and the potential to build strong competitive moats.
- We seek good terms, which includes an attractive price and valuation and always aim for pro rata rights.
Can you tell us about the team managing the fund?
Our Seed Fund is an actively managed fund led by a team of veteran investors with deep connections to seed ecosystems with strong investing track records. Moreover, our Seed Fund team is able to leverage our internal network of ~50 investment professionals across Alumni Ventures to identify and access the most promising startup opportunities. We also leverage our considerable external network.
Ron LevinManaging Partner, AV Seed Fund
Ron has spent his career in a variety of entrepreneurial, leadership, and business development roles. He has been an angel investor and advisor to over a dozen technology startups. Ron was co-founder and CEO of Barcelona-based TravelPerk, a venture capital-backed travel management platform that is ranked as one of the world’s fastest-growing SaaS companies as well as one of the most popular business travel booking tools in the market. Prior to TravelPerk, Ron started the B2B division of Booking.com and before that was a consultant with McKinsey & Co. Ron began his career at Lycos, one of the web’s pioneer search engine and web portals. He has lived in four European cities and traveled for business and pleasure to over 130 countries on six continents. Ron graduated from Babson College and received his MBA from Harvard Business School.
Meera OakSenior Principal, AV Seed Fund
Meera is a member of the Seed Fund investment team, bringing along financial management and operational experience from her time at Yale University, where she managed a $1B budget of the $4B organization. Most recently, Meera worked with early stage venture funds and incubators like Polymath Capital Partners and Create Venture Studio, and was responsible for investment sourcing and diligence across several verticals including enterprise SaaS, financial services and consumer products. Meera has a BA in Economics from Swarthmore College and an MBA from the Tuck School of Business at Dartmouth.
Brittney WadeSenior Associate, AV Seed Fund
Brittney is a member of the Seed/SAP Fund investment team, bringing product and operational experience from her time with enterprise and startup companies. Most recently, Brittney worked with Trove, a series D startup, where she led product development for the launch of Canada Goose’s first circular economy program. Brittney is a graduate of Columbia University and holds an MBA from the Tuck School of Business at Dartmouth.
How do you identify promising opportunities for the Seed Fund?
Alumni Ventures is one of the most active venture firms in the world at the angel and seed stage (PitchBook 2022). Hands-on portfolio construction is overseen by our Seed Fund team, in consultation with our centralized Office of Investing. The fund team is chosen for experience in and passion for seed investing, along with their network in the space.
Our Seed Fund team will source and evaluate pre-seed and seed opportunities that are being led by an established lead investor. We use a consistent scorecard and rigorous internal approval process to evaluate companies. Our aim is to identify a diverse set of quality investments, at reasonable terms.
The Seed Fund benefits from the extensive use of our massive network from across the investing world, including more than 9,500 investors and 600,000 community subscribers. Our engaged community provides value to our Seed Fund team through sourcing deal flow and capital, as well as connections and customers for portfolio investments.
How We Evaluate Investment Opportunities
CIO Mark Edwards and Deputy CIO Andy Ervin explain how AV evaluates deals, winnowing from hundreds of opportunities a month to a select few companies that end up in investors’ portfolios.
See video policy below.
Can you give an example of one of AV’s previous seed deals?
While there’s no typical seed investment for us, an example of one past seed deal was Alto. The company’s self-directed IRA platform offers a simpler, more affordable option for individuals to invest retirement savings into alternative assets such as private equity, venture capital, real estate, crypto, and more. Our Seed Fund built a relationship with Alto and identified several strong factors driving the company’s long-term potential:
Growing Demand for Alternative AssetsAs of March 31, U.S. retirement accounts held $35.4 trillion of retirement assets.* Consumers are showing a growing appetite for deploying that capital into alternative assets. Experts project that more than $10 trillion will be reallocated from traditional to alternative investments by 2030.**
Experienced Founder With a Prior ExitBefore Alto, Founder Eric Satz spent over 30 years as a serial entrepreneur and investor. He co-founded Currenex, an online foreign currency exchange platform acquired by State Street in 2007 for $564 million.***
Strong Investor SyndicateAlto has built an impressive syndicate of established seed and multi-stage VCs, including Sequoia’s Scout Program and Foundation Capital (an early investor in Netflix).
Our Seed Fund sponsored AV’s investment in Alto’s $5.4 million seed round in 2019 led by Jefferson River Capital and Moment Ventures, with participation from Foundation Capital, Sequoia’s Scout Fund, and Amplify.LA. We most recently invested in Alto’s $40 million Series B in 2022 led by Advance Venture Partners, with participation from Unusual Ventures, Acrew Capital, Alpha Edison, Foundation Capital, Gaingels, and Coinbase Ventures.
Seed Fund Closing December 31
Alumni Ventures’ Seed Fund lets you invest in a fund of ~50-75 diversified, venture-backed companies at the earliest stage, where the opportunities for value creation are typically highest and company valuations are usually at their lowest.
*Investment Company Institute, “Retirement Assets Total $35.4 Trillion in First Quarter 2023,” June 14, 2023
**Jeff Benjamin, “Demand for Alternative Investments Points to Major Portfolio Reallocations,” InvestmentNews, November 15, 2022
***Jonathan Stempel, Svea Herbst-Bayliss, “State Street To Buy Currenex for $564M,” Reuters, January 22, 2007