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| == Background == | == Background == | ||
| AV was founded in 2014 by Mike Collins.<ref name=":3">{{Cite web |last=Kirsner |first=Scott |date=April 7, 2019 |title=Giving VC investing the old college try |url=https://www.bostonglobe.com/business/2019/04/07/giving-investing-old-college-try/zF9r9dhfETHQryYw1UMsoK/story.html |access-date=December 28, 2024 |website=Boston Globe |language=en-US}}</ref><ref name=":1">{{Cite web |last=Clark |first=Kate |date=October 19, 2018 |title=Alumni Ventures Group is the most active venture fund you've never heard of |url=https://techcrunch.com/2018/10/19/alumni-ventures-group-is-the-most-active-venture-fund-youve-never-heard-of/ |access-date=December 28, 2024 |website=TechCrunch |language=en-US}}</ref> Collins, who previously worked at ] wanted to make venture capital more accessible to individual people and had grew tired of how the industry was mostly limited to the ]s and the ultra wealthy.<ref name=":3" /><ref name=":1" /><ref name=":4">{{Cite web |last=Bailey |first=Doug |date=March 14, 2022 |title=Did VC "innovator" Alumni Ventures mislead investors on fees? |url=https://www.businessofbusiness.com/articles/vc-innovator-alumni-ventures-misled-investors-fees-SEC-settlement/ |access-date=December 28, 2024 |website=The Business of Business |language=en}}</ref> When AV started, Collins raised $1.5 million in funding from his alma mater, ] for the fund, Green D Ventures.<ref name=":1" /><ref name=":0">{{Cite web |last=Joyner |first=April |date=May 26, 2023 |title=A VC firm backed by alumni of elite universities like Dartmouth and Yale is now one of the most active US investors. |url=https://www.businessinsider.com/alumni-ventures-vc-firm-mark-edwards-investment-strategy-2023-5 |access-date=December 28, 2024 |website=Business Insider |language=en-US}}</ref> | AV was founded in 2014 by Mike Collins.<ref name=":3">{{Cite web |last=Kirsner |first=Scott |date=April 7, 2019 |title=Giving VC investing the old college try |url=https://www.bostonglobe.com/business/2019/04/07/giving-investing-old-college-try/zF9r9dhfETHQryYw1UMsoK/story.html |access-date=December 28, 2024 |website=Boston Globe |language=en-US |archive-date=December 27, 2024 |archive-url=https://web.archive.org/web/20241227114412/https://www.bostonglobe.com/business/2019/04/07/giving-investing-old-college-try/zF9r9dhfETHQryYw1UMsoK/story.html |url-status=live }}</ref><ref name=":1">{{Cite web |last=Clark |first=Kate |date=October 19, 2018 |title=Alumni Ventures Group is the most active venture fund you've never heard of |url=https://techcrunch.com/2018/10/19/alumni-ventures-group-is-the-most-active-venture-fund-youve-never-heard-of/ |access-date=December 28, 2024 |website=TechCrunch |language=en-US |archive-date=December 27, 2024 |archive-url=https://web.archive.org/web/20241227121402/https://techcrunch.com/2018/10/19/alumni-ventures-group-is-the-most-active-venture-fund-youve-never-heard-of/ |url-status=live }}</ref> Collins, who previously worked at ] wanted to make venture capital more accessible to individual people and had grew tired of how the industry was mostly limited to the ]s and the ultra wealthy.<ref name=":3" /><ref name=":1" /><ref name=":4">{{Cite web |last=Bailey |first=Doug |date=March 14, 2022 |title=Did VC "innovator" Alumni Ventures mislead investors on fees? |url=https://www.businessofbusiness.com/articles/vc-innovator-alumni-ventures-misled-investors-fees-SEC-settlement/ |access-date=December 28, 2024 |website=The Business of Business |language=en |archive-date=December 27, 2024 |archive-url=https://web.archive.org/web/20241227150158/https://www.businessofbusiness.com/articles/vc-innovator-alumni-ventures-misled-investors-fees-SEC-settlement/ |url-status=live }}</ref> When AV started, Collins raised $1.5 million in funding from his alma mater, ] for the fund, Green D Ventures.<ref name=":1" /><ref name=":0">{{Cite web |last=Joyner |first=April |date=May 26, 2023 |title=A VC firm backed by alumni of elite universities like Dartmouth and Yale is now one of the most active US investors. |url=https://www.businessinsider.com/alumni-ventures-vc-firm-mark-edwards-investment-strategy-2023-5 |access-date=December 28, 2024 |website=Business Insider |language=en-US |archive-date=December 25, 2024 |archive-url=https://web.archive.org/web/20241225102404/https://www.businessinsider.com/alumni-ventures-vc-firm-mark-edwards-investment-strategy-2023-5 |url-status=live }}</ref> | ||
| The firm focuses on fundraising directly from individual alumni of universities taking $50,000 minimum each rather than getting large investment funding from institutional investors.<ref name=":3" /><ref name=":1" /><ref name=":0" /><ref name=":6">{{Cite web |last=Ledbetter |first=James |date=March 6, 2022 |title=SCOOP: SEC Fines Sketchy 'Ivy League' VC Firm. What Took So Long? |url=https://observer.com/2022/03/scoop-sec-fines-sketchy-ivy-league-vc-firm-what-took-so-long/ |access-date=December 28, 2024 |website=Observer |language=en-US}}</ref> Examples of alumni funds include The Yard Ventures (]), Spike Ventures (]), Castor Ventures (]), Purple Arch Ventures (]) and Strawberry Creek Ventures (]).<ref name=":3" /><ref name=":4" /> Some students of universities, |
The firm focuses on fundraising directly from individual alumni of universities taking $50,000 minimum each rather than getting large investment funding from institutional investors.<ref name=":3" /><ref name=":1" /><ref name=":0" /><ref name=":6">{{Cite web |last=Ledbetter |first=James |date=March 6, 2022 |title=SCOOP: SEC Fines Sketchy 'Ivy League' VC Firm. What Took So Long? |url=https://observer.com/2022/03/scoop-sec-fines-sketchy-ivy-league-vc-firm-what-took-so-long/ |access-date=December 28, 2024 |website=Observer |language=en-US |archive-date=December 25, 2024 |archive-url=https://web.archive.org/web/20241225100528/https://observer.com/2022/03/scoop-sec-fines-sketchy-ivy-league-vc-firm-what-took-so-long/ |url-status=live }}</ref> Examples of alumni funds include The Yard Ventures (]), Spike Ventures (]), Castor Ventures (]), Purple Arch Ventures (]) and Strawberry Creek Ventures (]).<ref name=":3" /><ref name=":4" /> Some students of universities, claim the way AV advertise these funds is misleading as it gives the impression they are university officially sanctioned endeavors when they are in fact not affiliated with the universities themselves.<ref name=":3" /><ref name=":4" /><ref name=":6" /> | ||
| Within five years, AV raised almost $1 billion and grew to have over 175 employees. By some accounts, AV was the most active and fastest growing venture investor in the U.S. It is speculated that its growth came partly due to its pitch to democratize |
Within five years, AV raised almost $1 billion and grew to have over 175 employees. By some accounts, AV was the most active and fastest growing venture investor in the U.S. It is speculated that its growth came partly due to its pitch to democratize markets and make them accessible to less experienced investors in the same manner as ]. AV may have taken advantages of such neophytes.<ref name=":4" /> | ||
| Despite AV having a large deal flow, the firm prefers to have a low profile.<ref name=":3" /><ref name=":1" /> The firm prefers to focus on investing in companies and avoids taking ] seats to change the company's direction.<ref name=":3" /><ref name=":1" /><ref name=":0" /> Some startup founders do not even know that AV owns a part of their company.<ref name=":3" /> ] founder, Chad Laurans claims that he never directly interacted with the firm and it wasn't actively involved in the company.<ref name=":3" /> | Despite AV having a large deal flow, the firm prefers to have a low profile.<ref name=":3" /><ref name=":1" /> The firm prefers to focus on investing in companies and avoids taking ] seats to change the company's direction.<ref name=":3" /><ref name=":1" /><ref name=":0" /> Some startup founders do not even know that AV owns a part of their company.<ref name=":3" /> ] founder, Chad Laurans claims that he never directly interacted with the firm and it wasn't actively involved in the company.<ref name=":3" /> | ||
| Line 36: | Line 36: | ||
| == Misleading fees == | == Misleading fees == | ||
| On March 4, 2022, the ] (SEC) fined AV $700,000 for making misleading contract statements and breaching operating agreements.<ref name=":4" /><ref name=":6" /><ref name=":2">{{Cite web |last=Myers |first=Bill |date=March 10, 2022 |title=Dissecting the SEC's case against Alumni Ventures |url=https://www.venturecapitaljournal.com/dissecting-the-secs-case-against-alumni-ventures/ |access-date=December 28, 2024 |website=Venture Capital Journal |language=en-US}}</ref> The SEC alleged AV in its marketing communications claimed to have an industry standard ] which was a 2% management fee during each year of its funds’ 10-year term and a separate 20% performance fee.<ref name=":4" /><ref name=":6" /><ref name=":2" /> Instead AV assessed a management fee of 20% of an investor's fund investment at the start which represented 10 years of 2% annual management fees.<ref name=":4" /><ref name=":6" /><ref name=":2" /> The SEC also alleged AV ] funds assets through loans and transfers among the funds, despite the contact language stating this was prohibited.<ref name=":6" /><ref name=":2" /> AV has blamed sloppiness in its marketing materials for the cause of the problem.<ref name=":4" /> Apart from paying the fines, AV also returned $4.8 million worth of fees to investors and also hired a new compliance officer who rewrote the policies and procedures of AV to review any "written communication" about fees by any AV employees.<ref name=":2" /> | On March 4, 2022, the ] (SEC) fined AV $700,000 for making misleading contract statements and breaching operating agreements.<ref name=":4" /><ref name=":6" /><ref name=":2">{{Cite web |last=Myers |first=Bill |date=March 10, 2022 |title=Dissecting the SEC's case against Alumni Ventures |url=https://www.venturecapitaljournal.com/dissecting-the-secs-case-against-alumni-ventures/ |access-date=December 28, 2024 |website=Venture Capital Journal |language=en-US |archive-date=December 26, 2024 |archive-url=https://web.archive.org/web/20241226110511/https://www.venturecapitaljournal.com/dissecting-the-secs-case-against-alumni-ventures/ |url-status=live }}</ref> The SEC alleged AV in its marketing communications claimed to have an industry standard ] which was a 2% management fee during each year of its funds’ 10-year term and a separate 20% performance fee.<ref name=":4" /><ref name=":6" /><ref name=":2" /> Instead AV assessed a management fee of 20% of an investor's fund investment at the start which represented 10 years of 2% annual management fees.<ref name=":4" /><ref name=":6" /><ref name=":2" /> The SEC also alleged AV ] funds assets through loans and transfers among the funds, despite the contact language stating this was prohibited.<ref name=":6" /><ref name=":2" /> AV has blamed sloppiness in its marketing materials for the cause of the problem.<ref name=":4" /> Apart from paying the fines, AV also returned $4.8 million worth of fees to investors and also hired a new compliance officer who rewrote the policies and procedures of AV to review any "written communication" about fees by any AV employees.<ref name=":2" /> | ||
| ==References== | ==References== | ||
Revision as of 08:17, 28 December 2024
American venture capital firm
 | |
| Company type | Private |
|---|---|
| Industry | Venture Capital |
| Founded | 2014; 11 years ago (2014) |
| Founders | Mike Collins |
| Headquarters | Manchester, New Hampshire, U.S. |
| Key people | Mike Collins (CEO) |
| AUM | US$1.2 billion (2023) |
| Number of employees | 175 (2022) |
| Website | www |
Alumni Ventures ("AV") is an American venture capital firm headquartered in Manchester, New Hampshire. The firm creates investment funds for university alumni to invest in.
Background
AV was founded in 2014 by Mike Collins. Collins, who previously worked at TA Associates wanted to make venture capital more accessible to individual people and had grew tired of how the industry was mostly limited to the institutional investors and the ultra wealthy. When AV started, Collins raised $1.5 million in funding from his alma mater, Dartmouth College for the fund, Green D Ventures.
The firm focuses on fundraising directly from individual alumni of universities taking $50,000 minimum each rather than getting large investment funding from institutional investors. Examples of alumni funds include The Yard Ventures (Harvard), Spike Ventures (Stanford), Castor Ventures (MIT), Purple Arch Ventures (Northwestern) and Strawberry Creek Ventures (University of California-Berkeley). Some students of universities, claim the way AV advertise these funds is misleading as it gives the impression they are university officially sanctioned endeavors when they are in fact not affiliated with the universities themselves.
Within five years, AV raised almost $1 billion and grew to have over 175 employees. By some accounts, AV was the most active and fastest growing venture investor in the U.S. It is speculated that its growth came partly due to its pitch to democratize markets and make them accessible to less experienced investors in the same manner as Robinhood Markets. AV may have taken advantages of such neophytes.
Despite AV having a large deal flow, the firm prefers to have a low profile. The firm prefers to focus on investing in companies and avoids taking board of directors seats to change the company's direction. Some startup founders do not even know that AV owns a part of their company. SimpliSafe founder, Chad Laurans claims that he never directly interacted with the firm and it wasn't actively involved in the company.
Notable investments of AV include Mic, Casper Sleep and Better.com.
Misleading fees
On March 4, 2022, the U.S. Securities and Exchange Commission (SEC) fined AV $700,000 for making misleading contract statements and breaching operating agreements. The SEC alleged AV in its marketing communications claimed to have an industry standard management fee which was a 2% management fee during each year of its funds’ 10-year term and a separate 20% performance fee. Instead AV assessed a management fee of 20% of an investor's fund investment at the start which represented 10 years of 2% annual management fees. The SEC also alleged AV commingled funds assets through loans and transfers among the funds, despite the contact language stating this was prohibited. AV has blamed sloppiness in its marketing materials for the cause of the problem. Apart from paying the fines, AV also returned $4.8 million worth of fees to investors and also hired a new compliance officer who rewrote the policies and procedures of AV to review any "written communication" about fees by any AV employees.
References
- ^ Kirsner, Scott (April 7, 2019). "Giving VC investing the old college try". Boston Globe. Archived from the original on December 27, 2024. Retrieved December 28, 2024.
- ^ Clark, Kate (October 19, 2018). "Alumni Ventures Group is the most active venture fund you've never heard of". TechCrunch. Archived from the original on December 27, 2024. Retrieved December 28, 2024.
- ^ Bailey, Doug (March 14, 2022). "Did VC "innovator" Alumni Ventures mislead investors on fees?". The Business of Business. Archived from the original on December 27, 2024. Retrieved December 28, 2024.
- ^ Joyner, April (May 26, 2023). "A VC firm backed by alumni of elite universities like Dartmouth and Yale is now one of the most active US investors". Business Insider. Archived from the original on December 25, 2024. Retrieved December 28, 2024.
- ^ Ledbetter, James (March 6, 2022). "SCOOP: SEC Fines Sketchy 'Ivy League' VC Firm. What Took So Long?". Observer. Archived from the original on December 25, 2024. Retrieved December 28, 2024.
- ^ Myers, Bill (March 10, 2022). "Dissecting the SEC's case against Alumni Ventures". Venture Capital Journal. Archived from the original on December 26, 2024. Retrieved December 28, 2024.
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