Investing in Tomorrow: Towerview Ventures Fund Introduction

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  Speaker 1:
  Hello, my name is Greg Baker. I’m the managing partner with Towerview Ventures. Towerview Ventures is a part of Alumni Ventures, a network-powered venture firm helping accredited individuals become more successful venture investors. Welcome to today’s webinar. We are pleased you’re able to join us. We are speaking today about Towerview Ventures and our views on the associated 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 in the materials provided for the webinar, which you can access at www.avfunds.com/disclosures.

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

  Alright, so thank you again for joining us. With me is Matt Jones, Senior Associate, Towerview Ventures. We’re excited to introduce to you Towerview Ventures, a fund that is deeply connected to the Duke alumni community and is designed to help you diversify into venture capital.

  Speaker 2:
  As a Duke alum and former Blue Devil basketball player, it’s an honor to help lead this venture, which is uniquely positioned to offer you access to exciting investment opportunities, all while supporting our Duke network. Let’s dive into why Towerview Ventures might be the right fit for your portfolio.

  Speaker 1:
  Towerview Ventures is part of the broader Alumni Ventures group, which is America’s largest venture firm for individual investors. We’ve raised over $1.3 billion from individuals like you—that’s Alumni Ventures, not Towerview—and we’re ranked as one of the top 20 venture capital firms in the US according to PitchBook and CB Insights. Our goal at Towerview is to create wealth for Duke alumni and community members by investing in a diversified portfolio of 20 to 30 high-potential companies. The fund is designed to connect the Duke community with top-tier venture-backed companies and provide capital to innovative founders, many of whom are Duke alums themselves.

  Speaker 2:
  As Greg mentioned, we are proud to have a dedicated team here at Towerview Ventures. Greg has been managing partner since 2017, with over a hundred investments under his belt, including exciting companies like Axiom Space, Shine Medical, and Maxwell. His leadership and deep experience in both corporate leadership and venture capital have been instrumental in shaping our fund’s success.

  I, on the other hand, come from a slightly different background, having been part of Duke’s 2015 national championship basketball team. After a brief professional basketball career, I shifted my focus to commercial real estate before joining Towerview Ventures. Our combined experiences allow us to leverage Duke’s powerful alumni network to identify and support promising companies.

  Speaker 1:
  Venture capital has often outperformed public markets over the long term. It’s largely uncorrelated with public markets, making it a strong option to diversify your portfolio. Significantly more value is created in private markets today than ever before, making this an opportune time to invest.

  Speaker 2:
  Alumni Ventures is the largest venture firm for individual investors in the US and the number one most active venture firm in the country per PitchBook. Since 2014, we’ve raised over $1.3 billion and built a portfolio of more than 1,400 companies, supported by a team of about 40 full-time venture investors and professionals.

  Speaker 1:
  As I mentioned before, according to CB Insights, Alumni Ventures is ranked among the top 20 venture capital firms in North America. This ranking is based on investment performance and shows the strength of our approach to investing on behalf of individuals rather than large institutions. This is an impressive group to be included with and something I’m very proud of helping to create—and to allow fellow Duke alumni to participate in venture capital as an asset class.

  Speaker 2:
  We’ve consistently delivered top quartile returns to our investors. Our strategy focuses on diversified portfolios and long-term growth. As a fund matures over its 10-year life, performance tends to improve, outpacing public market equivalents.

  Speaker 1:
  One of the strengths of our model is that we co-invest with highly experienced venture firms such as Andreessen Horowitz, Y Combinator, and Sequoia. We invest at the same financial terms as the lead VC, and we evaluate each opportunity at the partner level—looking to invest in deals that are led by partners who have a track record investing in the same or closely related industry at the same stage of the current deal. Not just, “Hey, Andreessen’s leading this deal, we’re in.”

  Speaker 2:
  The market has changed significantly since early 2022. As you can see from this analysis of the venture capital market, the current venture market is one of the most favorable to investors in over a decade. Deal terms and valuations are particularly attractive right now.

  Speaker 1:
  At Alumni Ventures, diversification is a key part of our strategy. Towerview Ventures is no different. We diversify across sectors, stages, geographies, and lead investors. This broad and deep approach helps us manage risks while maximizing opportunities for return. We do not chase bubbles and the current new thing. We are intentionally diverse, which should reduce risk. Our alumni-centric approach creates a nexus of powerful connections. We provide capital and access to a network of over 750,000 community members, many of whom are from leading universities. This is highly appealing to entrepreneurs and helps our portfolio companies grow. It is also a great source for our deal pipeline. We are introduced to investment opportunities from founders and VCs that we have relationships with, as well as the large Alumni Ventures and Towerview Ventures communities.

  Speaker 2:
  Towerview Ventures operates as part of Alumni Ventures’ broader global investment engine. We source the best opportunities, conduct rigorous due diligence, and collaborate with investment teams across our network. Our centralized deal flow system allows us to evaluate hundreds of deals per month. Specifically, the two of us, supported by our team of fellows, will see more than 50 deals each month. We are looking for, on average, one investment per month to actually invest in. We need to complete our due diligence and then convince one of the other teams in Alumni Ventures that it is a great investment opportunity to the level that they are interested—other funds invest in the company with us. This gets us about half of the portfolio. The other half comes from us seeing an investment opportunity that one of the other 17 funds is investing in, and we join with them. This gets us into companies that we might not have seen through our network and further diversifies the portfolio.

  Speaker 1:
  The Alumni Ventures investment teams see over 500 deals per month and perform detailed diligence on around 50 of them. With a team of 40 full-time investment professionals and connections to the top alumni networks, we have access to a massive flow of high-quality investment opportunities. The diligence process is consistent across the investment teams at Alumni Ventures. It is based on an analysis of many VC investments made over the years—and many that we were not a part of. The evaluation is across many relevant factors in a manner designed to quantify the process and minimize gut-feel investing.

  Speaker 2:
  Some of our notable investments include companies like Maxwell, a platform for finding full-time, part-time, and shift-by-shift nurses and clinicians. This company has been acquired after our investment, resulting in a cash return to our investors and stock in the acquiring company, which could deliver additional returns. Hadean, which provides computing infrastructure for Web3 applications. Win Transactions, a platform streamlining private market transactions. PathSpot, which detects foodborne contaminants. And Solo Funds, an online marketplace for non-predatory loans. And these are just a few examples of how we’re investing in high-impact startups.

  Speaker 1:
  Our investors and portfolio companies speak highly of the value we bring. One portfolio CEO said, “Towerview Ventures offers far more than just money. Their network and proactive support have been invaluable in helping us grow.” He is the CEO of Maxwell, which Matt just mentioned, has been acquired and delivered returns to our investors. This is what sets us apart from other VC firms.

  Let’s go over a few key terms. Our investment minimum is $25,000. We accept investments from cash, trusts, and retirement funds. There is a 2% management fee for the fund’s 10-year term and an 80/20 profit sharing model once all capital has been returned. So, if you invest $25,000, the first $25,000 of returns are all given back to you before we start profit sharing at the 80/20—80% to you, 20% to us.

  Speaker 2:
  One potential advantage of investing with Towerview is that certain investments may qualify for QSBS—Qualified Small Business Stock. This could mean tax exemptions on capital gains up to $10 million. We encourage you to consult with your tax advisor to explore this benefit.

  Speaker 1:
  We now offer loyalty rewards for investors who commit early or who invest larger sums. For example, if you invest during the first close or have more than $500,000 invested with Alumni Ventures, you can receive significant reductions in management fees.

  Speaker 2:
  To be clear, we are not financial advisors and encourage our investors to consult with theirs. Many of our existing investors choose to take a consistent, long-term approach to venture investing—like dollar-cost averaging. Reinvesting proceeds can lead to compounding returns. Having an annual plan can help ensure you don’t miss out on key opportunities.

  Speaker 1:
  For new investors, we assign an account manager who is your first call for anything you need. We also host an onboarding webinar with the Alumni Ventures CEO, Mike Collins, to help you get started and understand your portfolio. You can also always reach out to either of us. But with most questions that are not about the companies in the portfolio, we will probably need to call Stephanie, Hillary, or Jeff.

  Besides the two of us and the account managers, we have a team of senior partners. The senior partners know the organization and can discuss with you the investment opportunities within Alumni Ventures. If you click on one of the links to learn more, you might get one of them—or me. All of our calendars are combined to give you the greatest choice. If you would prefer to just speak with me, email me at [email protected]. Also, if you’re an entrepreneur and want us to look at your company, great—but don’t click on a Learn More or Next Steps link. You might get one of the senior partners, and they do not have any function in the investing process. You would be wasting your time. Either email me or [email protected].

  There are some additional slides in the deck. We’re not going to go over all of them, but you will receive a copy of this recording and the deck. These are slides with details on VC as an industry and a few things open to Towerview Ventures investors, and a little more legal.

  As we had mentioned, VC has typically outperformed the market. It does not correlate with other—certainly not with public equities. Value creation, as we mentioned, has become very much driven in the private portion of lives.

  One thing about our investments, especially for people who are first-time investors: the lifecycle of a fund tends to follow what’s called the J-curve, where we value the companies at the last price that they sold equity at, which is similar to public markets. Although Apple’s last sale was a microsecond ago, a company like Win Transactions raised money about 18 months ago.

  Speaker 1:
  They raised 36 months of operating capital, so we don’t expect their valuation to change for another 18 months or so. And because of that—and the fact that a lot of venture capital-backed companies, if they are going to fail, tend to fail early—you see that in the first couple of years, you might have a valuation of the entire portfolio below the initial value. As companies mature, raise money at higher valuations, get acquired, or go public, the valuation and performance of the fund would improve. So I just want people to not be shocked in year two when they certainly could have done better in public markets. In the long term, as the other data has shown, venture capital very often outperforms these funds.

  One thing to call attention to is our syndication process.
  Throughout the course of the year, there will be several companies where Alumni Ventures—and potentially Towerview, but not necessarily—have already committed to invest in a particular company. We have access to a larger portion of the investment round than we’re going to fill from our funds. We will make those opportunities available to individual investors that are already investors in one of our funds, allowing people to add on into companies that might already be in the Towerview Fund or other companies that they think are an attractive investment.

  So you’ll be seeing opportunities to invest in companies on a one-off basis that not only were vetted and invested in by a venture capital fund with a huge track record, but also by at least two of the funds within Alumni Ventures. Some of our investors find this a very attractive part of being an investor with Alumni Ventures.

  Again, this was not an offer to buy or sell securities.
  We are not financial advisors. We do invest with the intent to make you money, and that is our role in life. And if you do the math on one of our venture capital funds, it’s a little bit challenging for us to make money just on a 2% fee. Although 2% sounds like a lot, our money is really in that 20% profit share on the backside.

  So in conclusion, Towerview Ventures offers a unique opportunity to invest in high-growth companies through the strength of our Duke network and Alumni Ventures’ expertise. We’d love to have you join us in the journey.

  Speaker 2:
  Thank you all for attending. We’re happy to answer any questions and help you get started. Please reach out to our team, and we look forward to working with you to grow your venture portfolio.