Are You a Tech Enthusiast? And Why VC Might Belong in Your Portfolio

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  Speaker 1:
  Hi, I’m Mike Collins. I’m the founder and CEO of Alumni Ventures. Are you a tech enthusiast? That’s the subject of our talk today—a little bit about VC, why VC might belong in your portfolio, why it might be a good fit, why it might not be a good fit. So we’ll just dig into that today. This is the conversation I have with friends and family, so it’s pretty informal, pretty direct.

  Speaker 2:
  So let’s get going. Disclosures.

  Speaker 1:
  Before I get started, I want to remind everyone that we’re speaking today about Alumni Ventures and our views—my views—of the investing landscape. This presentation is for informational purposes only. It’s not investing advice, it is not an offer to buy or sell securities. Those are only made pursuant to a formal offering document for the fund.

  So, no further ado. This is what we’re going to cover today. I’m going to define this thing we call “tech enthusiast,” talk a little bit about VC—why it might make sense, why it might be especially interesting for tech enthusiasts. I think it’ll be interesting. I’m going to give an overview—kind of state of technology—where I think there’s white spaces, the next DECA unicorns, and trillion-dollar companies are going to come out of. I’ll talk about a few specific companies, and then we’ll just wrap up with some questions, and that’s it. That’s what we’re going to cover today.

  So just a tad about me—I grew up in the Midwest. My parents were teachers. I came East to go to college and to play basketball at Dartmouth. Got my first job in venture capital in 1986. Went back to HBS. Really, my whole career—I was very fortunate that I found something I really loved and was good at early—is really working at the intersection of technology, innovation, venture capital. Just had great mentors: Kevin Landry from TA Associates, Clayton Christensen—huge influence on me.

  Just a couple of other quick points: I founded Alumni Ventures in 2013, really just coming from my own personal frustration when I was not in the business—that it was really hard to access the number and quality of venture deals that I felt was appropriate for a portfolio, which I actually think is a power-law business. It needs to be hundreds of companies. What you find in the course of investing in this space is that it’s just a handful of businesses that really drive all of your returns and wealth creation. The seven of those listed there by my picture have probably accounted for 95% of my wealth—out of hundreds. So my mission, my opus, is to bring smart, simple venture capital to retail investors, and we’re well on our way toward doing that.

  Speaker 2:
  So next slide.

  Speaker 1:
  So what’s a tech enthusiast? We have just found that it’s one of the core personas of our community, and it’s someone that is educated, curious—sometimes with a lot of formal education, sometimes self-educated—but underlying it is they’re always learning. They tend to be interested in science, technology, how the future is shaped and driven by technology and rational thought. They tend to be early adopters. They’re the first kid on the block to buy the new gadget. They’re an early user, VPs. They’re the first person to buy an iPhone. They’re definitely science fiction readers and enjoy the future and thinking about it. But they’re also doers and builders. It is not only heads in the clouds.

  Our tech enthusiasts, again, tend to believe in science, rational thought. They’re realistic as well. While optimistic, they tend to be tech optimists as well—but they fully understand. They’re smart. They understand that new technologies come with unintended consequences. There’s always a negative to every innovation. You invent the car, you’ve got suburbs and sprawl—but the genie doesn’t go back, and they fully understand that. And then you use technology and thinking and innovation to solve the next set of problems—and that’s what’s going on now.

  Okay, so first of all—five reasons venture capital might make sense. Just this—we believe is true—that it is good diversification. There are some core fundamentals of being a good investor: pick the right allocation amount, diversify, don’t time markets. And diversification is one of the superpowers—the ability to have a portfolio of things that are uncorrelated kind of protects you on the downside, protects your kind of risk profile.

  That’s true within asset classes and across asset classes. A lot of people want to—obviously investing is about creating returns and financial security—but people like to vote with at least some of their money in things that they care about. And that’s true for tech enthusiasts for sure.

  We think all venture investors really enjoy the community, the networking, the influence. It’s very important that at the front of the line are returns—and that comes with good discipline, working with good people, having a good strategy, and not timing markets. And then again, all of our investors really like access to innovation—they really like the teams, the stories, the entrepreneurs. They like being in the know—just the nature of the kinds of people who like being venture investors. So that’s true for pretty much everyone within our community of almost 11,000 investors at this point.

  Speaker 2:
  Next slide.

  Speaker 1:
  I think there are some reasons that I and other tech enthusiasts really love venture investing. It’s probably 25% of our customer base I’d put into this category. They want to stay ahead of the curve. They want to be relevant. They want knowledge that might impact their lives—their families, their professional life, their personal life.

  They really like—this is a form of being an early adopter. As I mentioned before, they really like supporting young teams that are trying to solve important problems in healthcare or energy or any challenge in our society. The opportunity of a small group of highly motivated people with a great idea and a little bit of capital can do wonders.

  Our tech enthusiast crowd really likes having a prepared mind—like if they understand something’s coming, that can really impact the decisions that they make every day. So I think they find it can change the trajectory of things personally, professionally, family, giving back. I think tech enthusiasts just generally find venture investing—and hanging out with similar people and reading about this stuff—fun and interesting.

  So those are some of the additional reasons why venture capital resonates so strongly with tech enthusiasts.

  One thing that we do openly here is we share our best ideas and our portfolio companies. We just think, again, that this is something that especially appeals to the tech enthusiasts in our community.

  So here’s just an example of some things that we’ve probably written and published in the last 30 days: about low-human startups, what AI agents are going to mean. I did a piece on what I call the “bespoke economy,” which is a shadow trend to the growth of AI and robotics. And then we talk about things often that are next—what’s over the horizon? The mainstream catches on to things, but what is the venture tip-of-the-spear community investing in next? We try to make that and democratize that thinking, that information.

  We have a team of almost 50-some investing professionals. They write these pieces. We’re different in that we share them very broadly.

  So…

  Yeah, kind of our trophy case. So we’ve created one of the leading venture capital firms for retail customers in the world. We’re typically ranked as one of the most active. We win awards for being a high-quality firm, being founder-friendly. We were ranked in 2024 as one of the top 20 venture capital firms by CB Insights.

  We have a unique niche. Again, we are built from the ground up to do retail. That community is our superpower and lets us get access to amazing early-stage companies and amazing teams that are changing the world. We’re in a bunch of venture hubs—over 100 employees, half of which get up every day trying to get access to amazing deals.

  So in our first decade, we’ve built a nice business—and we think we’re just getting started in democratizing—helping democratize—this asset class.

  Speaker 1:
  So I just want to make the point as well that venture capital, entrepreneurship, technology—is really a driver in our society. We are in a capitalist system—arguably we’re in an extreme capitalist system—and the value created by technology companies is really monumental. If you look at the Mag Seven, if you look at where value has been created—something like, you take the market cap of the companies kind of within a 30-minute drive of San Francisco Airport, and it’s probably equivalent to the public market of a pretty good-sized country. So I don’t need to dwell on it—people get it.

  We have multiple trillion-dollar companies. The number of trillion-dollar companies over the next decade will probably grow by an order of magnitude. There will be new ones coming along, and there will be disruption—and that’s the nature of the game. And venture capital, technology companies, entrepreneurship—is at the center of it. If you wait for these companies to be public in 2024, 2025, 2026—you’re missing out on an enormous amount of value creation. Companies are staying private longer. There’s more and more capital available that has jumped the fence. So if you really want to be in equities—part of your allocation—you really need to consider strongly private equity as well.

  Speaker 2:
  So—

  Speaker 1:
  We are real believers in the future of technology and innovation and value creation.

  Next slide.

  Again, a little bit on how VCs make money. It’s pretty straightforward. Venture capital firms create 10-year funds. The annual management fee—2%, sometimes a little bit higher, sometimes a little bit lower—and then when capital is returned, typically 20% of the profits are kept by the investing company and 80% go to the capital providers. So you’ll hear the term “two and twenty.” A lot of the firms, frankly, that we co-invest with—and we’re exclusively a co-investment shop—charge more than two and twenty. There are also fund-of-funds and other kinds of intermediaries that put fees on top of the fees that venture capital firms charge or charge a lot of soft costs.

  Our firm is pretty standard in that we charge two and twenty, and we have 10-year funds. Because we deal with retail investors, we do one capital call at the beginning to make it simple, and we allocate. We invest our money on usually a year to two-year time horizon, but we run our funds on an annual cadence, which allows our retail customers to invest every year. It just works out better for everyone.

  So that’s a little bit—and we have lots of information if people want to dig into that.

  This, I think, is a really important thing for tech enthusiasts to understand, which is: venture capital is illiquid. These are investments in a portfolio of companies that take time. Usually, a portfolio will include 20 or 30 companies, diversified by sector and geography and stage and lead investor—all venture capital deals.

  But usually—there’s a saying in VC that your lemons ripen early—so usually in a portfolio it’s not unheard of to have half the companies fail or lose part or all of the investment amount. And then out of 10, two to four will do pretty well, and then one out of 10 will drive returns. So this is a hits business. It’s a power-law business. That’s the nature of most investing, but it is especially true within venture capital.

  So this is long-term, illiquid, patient capital. Because of that, returns historically for this asset class have been very good. There are good vintages and bad vintages, but overall—because there’s so much value creation—it can do really, really well. But one of the things we strongly recommend is people allocate over time. So if you have a budget of $500,000, you put in $100,000 a year for five years—and then just compound, reinvest winnings, those gains. Those things, I think, are the right way to think about it.

  So it also makes that it’s a really good fit for RIA money or 401(k) money. Most people consider that long-term appreciation capital, so it’s a pretty good fit for that.

  That’s the J-curve.

  I also wanted just to give the community a sense of what’s going on right now. And so again, I’ve had the luxury of being around before there was the internet, the smartphone, and have seen tech trends over the last 30 years. It is a very powerful time in technology and innovation. Arguably, AI and robotics will be the largest technology revolution of my lifetime. The internet, obviously, is a big deal—this, I think, absolutely is as big, if not bigger.

  I think we’re seeing enormous things in almost every segment of the economy now—from energy to education to transportation, the nature of white-collar work, the nature of blue-collar work, where people live, how they work. I think the next 10 years is going to see enormous change.

  I think if one is to read in some of Ray Kurzweil’s books about the singularity and get beyond the hype—but really look at the data and the facts and the charts—it’s profound. And so it’s a very important time to understand technology and where it’s going.

  A lot of these things are on geometric curves—and that humans don’t understand and work with well, frankly. So I think it’s really smart to be on top of this and be at the tip of the spear.

  And obviously, our firm and our portfolio companies are at the nexus of this world.

  So just—our approach is to focus on accredited individual investors. Our strategy is to exclusively co-invest alongside strong leads—strong people within strong firms—all the name brands that you’d want to ideally co-invest with. We’re investing in the company, not in the funds of these firms—so there’s no fee stacking.

  We’re going in right alongside: Company X is raising an A round, it’s being led by Benchmark, we’re participating in that round of financing. We get into the deal because we have a really good Rolodex, and our portfolio companies appreciate that. We’re like a favorite aunt or uncle—we leave you alone, but if you need help, we’re there. And we help them with recruiting, with introductions to lead VCs.

  We help them connect with each other. We run CEO dinners where they can have a safe space to talk. We have a great reputation among our founders of being helpful.

  There’s a role for a lead investor—that’s a really important job. That’s like marriage. That’s not us. But we’re a participant in the team and the cap chart.

  The community we have is vibrant. We hold events, we share a lot of content. It’s totally optional. Some people are introverts and this is not for them—to go hear a panel of people. So they just want to watch it online. We make all of that available.

  But people that are curious—people that want to stay on top of it, stay relevant—

  Speaker 2:
  I think we’re a really good match for people. Yeah, we have funds.

  Speaker 1:
  So it’s one thing to watch. It’s another thing to be in the arena. And so these are just four of our funds that I think appeal especially to tech enthusiasts.

  We have something called the Deep Tech Fund. So this is all the areas of cybersecurity and energy innovation and AI and robotics—the hard stuff—where it’s a team from Stanford or MIT that are solving a really hard, seemingly often intractable problem, but where the real breakthroughs can be.

  So Deep Tech Fund. AI and Robotics—we think it’s interesting that we combine teams here. So there’s AI deals in this portfolio, there’s robotics, and there’s a lot of both. So we love the marriage of hardware and software. Hardware, software, and people is probably the sweet spot in disruption over the next decade.

  Blockchain—obviously, this is an area that has ups, has downs. Very volatile. Not for the faint of heart. But we’re on our fifth or sixth blockchain fund. We have a huge portfolio of companies, some getting real traction, solving real problems. But despite its volatility, it’s really up and to the right—and we think it’s going to continue to be up and to the right. We think there are some things that distributed ledgers and the fundamental blockchain technology can do really well in the world of AI, Web3.

  But it’s big-boy, big-girl venture investing—seed, right?

  A lot of tech enthusiasm again—like, what’s going on? What’s coming out of Y Combinator this year? What are all the major incubators asking to see more of? We share that information. We invest in amazing teams. This is high risk, high reward. But where one can—if you hit it—it can be life-changing.

  So those are four funds that—If you’re interested, you should check out. I am going to, again, just

  Speaker 1:
  Full of opinions here, but I’m going to give you, again, 30 years of my point of view about what is key to being a successful VC investor. Big portfolio, diversify, don’t time markets. So this is, again, people will recognize this is true in their bones—which is: power law business. Meaning you need to cast the big net, you need to do it over time. Consistently doing two deals a year that your accountant shows you is not the way to do this asset class.

  There is a strong correlation between the leading venture capital firms and the very best companies and best deals. The correlation is really driven because an entrepreneur has their pick of venture capital firms, and so that’s why the correlation exists. It’s not because the people at Sequoia are that much smarter than everybody else—they’ve built their brand name because they’ve done it over a long period of time of making great investments, having great judgment, great people, supporting their companies. And at this point, it’s like Connecticut women’s basketball—the good companies go to them.

  So there is a strong correlation there, and part of our strategy is to co-invest with those people. It’s a pretty good… Curious people that do well in this asset class just tend to be people who appreciate rational thought, science, technology. They’re curious. A lot of them are educated, rational thinkers—very practical.

  That’s the right fit for this asset class. So if those things—you can take ’em. Just an observation of—

  Speaker 2:
  Who’s going to be successful in this.

  Speaker 1:
  Yes. So—questions. We have an online chat. People have been putting them in over time. Feel free to put in more. If we don’t get to all of them, we’re happy to follow up in an email or with a conversation to get your questions answered. We, again, pride ourselves on super transparency.

  Speaker 2:
  Yeah, life’s too short. What is one technology or sector you’re most excited about, and why?

  Speaker 1:
  Yeah, I think the area of life sciences and the combination of AI models to understanding how the human body and the brain work—it’s a little less attention, but I think there’s real potential over the next decade in drug discovery. And again, just really taking biology to the next level. Very personalized, very granular in our understanding.

  The ability to create synthetic biology, if you will, in order to do testing. Things like AlphaFold, AlphaFold 3—where we’re really able to use the power of computers, AI, large language models—it’s really more machine learning. But I’m most excited about that. I think it’s going to change healthspan a lot over the next decade.

  Speaker 1:
  What are the qualities you look for in an attractive investment for your funds?

  Yeah, the profound question of what do you look for as a VC—these things are pretty well established, but I’ll just reflect on a couple of things that I may overweight a bit.

  Which is: one, what’s the quality of the lead investor? I think it’s a little non-obvious, but I think that’s a really good tell on who’s going to make it and how big of an opportunity it is.

  I think the team—I am in the camp of, you’re betting on the jockey. Somebody who’s done it before, somebody that has unique domain expertise. I think when there is founder–market–problem fit, that can be a really good tell. Teams that have worked together before, teams that are complementary—so it’s not just the founder, although I tend to overweight the founder. But the founding team—very important. Especially if the founder has some blind spots—you like to see they surrounded themselves with complementary skills and personalities.

  Those are some of the things we look for.

  I guess the third one I would probably mention is just—what’s the nature of the problem?

  I think a lot of people focus on the solution and not enough juice is given to identifying the pain point. How big is that pain point? What jobs does the customer want to get done that they’re hiring this product or service to do? How big is that?

  I think you have to look at those things fairly holistically from the perspective of the customer, but a lot of extra juice I love putting in on the problem and the opportunity versus the solution. Because if it’s a big enough problem and the team has a unique take on it—usually, that’s the better recipe.

  Speaker 2:
  Will these funds continue to raise capital annually for the foreseeable future?

  Speaker 1:
  Yes. All of the funds I mentioned—they are annual funds. Oftentimes we’re on our fourth or fifth vintage. It’s one of the advantages of our funds at this point, which is: as we get to know companies, we obviously keep reserves, and so we reinvest more money in the companies that are getting good traction.

  But sometimes we actually have allocation or pro rata rights that exceed our allocation from our existing funds. So Deep Tech Fund II might have a great company in it—it’s raising a round of financing, we love the price, we’re putting more money to work out of Deep Tech II—but we can get another X hundreds of thousands or millions of dollars in the deal.

  So it is then an opportunity for our newest Deep Tech Fund, with its investment committee, to look at that deal and say, “Hey, we like that.” That’s a deal we wouldn’t have access to. We’ve lived with it, we’ve seen the team work, we see that there’s really product–market fit, and we think there’s still huge upside here—where some of the risk has actually been de-risked a bit.

  So we still like the risk-adjusted return scenarios. So yeah, we love our annual vintages.

  And again, kind of a point of view—you try to get in early, you try to add value, and you try to chase your winners. That’s how venture capital can work really well for people.

  So there are other questions I could go on, but just in saving time, we’ll take the rest offline. Appreciate really good questions.

  Thank you.

  I love putting this slide up. This is a lot of our customers—not all of them—but just asking you: which of these persona best describes you?

  And so if you fill out a survey or we ask you this, take a second, reflect—it helps us to give you the right content, understand where you are in your journey, what might be interesting to you.

  So we’ve identified:

  • The Asset Allocator is kind of the robotic, “I’m thinking about this in a cold, brutal way about—I want to diversify, I want stability. I have a 4.7% allocation to this asset class and I think you’re a phenomenal return. And I look at my portfolio and I’ve got holes in this segment, in this segment. I like to be a little more early. I’m underexposed in health,” whatever—they’re thinking very much from that portfolio management perspective.

  • Venture Curious—this is the early exploring, hasn’t done a lot, wants to learn, maybe ready to get serious about taking the step. They’ve seen too many things go by, typically, that they haven’t invested in—but they want smart, simple, accessible—and to dip their toe in.

  • Legacy Builder—usually on the other end of the spectrum. This is somebody that’s made money and has been successful and is up on Maslow’s hierarchy, and is now thinking about either diversification, giving back, being sure that they’re using every tool they can to educate their family, their kids. They’re just thinking about things from the mountaintop.

  • The Tech Enthusiast—which is, again, I think a lot of the people in this group today. I’ve talked a little bit about them. They’re just—they’re all in on technology and innovation, and they’re builders. They support builders, they like learning.

  • And then we have The Trophy Hunter, and the trophy hunter is someone interested in getting the winners. Listen—some of our legacy builders, some of our asset allocators—people are more than one thing. But this is definitely a group of people that are like: “This is the other end of the barbell from my public stock ETFs, and I’m doing venture capital to swing for the fences, hit home runs—and that’s what I’m looking for.”

  So they’re interested in seed deals. They’re interested in really hard deep tech things that—if they pan out—can be life-changing.

  So all of the above. We love people to kind of pick, “I’m most this.” People do evolve over time. Some people definitely come in venture curious and then they become more of an asset allocator. They come in just taking first steps, but they’re really in this and they really want the juice of trophy hunting.

  So all are good.

  Again, the fundamentals of a big portfolio: diversification, annual allocation, investing with good people, good teams, good lead investors—good.

  Speaker 1:
  Those things are kind of timeless—easy to get, hard to do.

  Next slide.

  So if you’re interested in this—again, common sense—be honest with yourself. What kind of persona are you? Do your research, pick the right product, ask questions.

  A lot of our investors just love a quick chat with one of us for 15–20 minutes—to hear their story, what they want to get out of it. A lot of people want to help our portfolio companies. So we encourage you: schedule a call. Pain-free. We like to talk to people.

  We are network-powered. We try to build long, enduring relationships with our investors and their families. So if that’s something that makes sense for you—

  Speaker 2:
  We encourage you to take the next step. So just want to thank—

  Speaker 1:
  Everybody. I think that concludes the program for today. It’s been fun, it’s been interesting, and we hope you want to learn more. We’d love to make you part of our community.

  Speaker 2:
  So thanks, and have a good one.