Democratizing Venture Capital – Alumni Ventures CEO Mike Collins

Hello everyone and welcome to the VentureFuel Visionaries. I'm thrilled today to welcome Mike Collins. Mike is the CEO of Alumni Ventures, which is one of the most active venture firms in the world. Under Mike's leadership, Alumni Ventures has redefined what it means to invest in innovation. They've built a powerful model that connects accredited investors with professionally managed venture portfolios through shared communities, specifically with alumni networks. The mission is to democratize access to venture capital. Mike and his team have empowered thousands of investors to back groundbreaking startups, whether that's in AI or climate tech to digital health and beyond. So today we're gonna dig into how they built this, one of the fastest growing venture firms in the US, how community and access can unlock innovation at scale, and what the future of venture investing might look like in this rapidly changing world. So if you're an innovator, an entrepreneur, an investor looking to understand how to participate in the next wave of venture transformation, this is the episode for you. Mike, welcome to the show.

Thank you, Fred. Great to be here.

All right, we got to start off with our, our basketball commentary right before this started. So if anyone's listening and not watching, my background has some basketball items in it, which Mike commented on, and I played basketball at Trinity College. And Mike, you played at Dartmouth and had the honor of guarding someone people might know.

Yeah, I mean, we, uh, we were one of those post-exam, uh, easy games for the North Carolina Tar Heels in 1983, which had a pretty good team featuring Jordan and, you know, Kenny Smith and the Daughertys and, you know, 3 Hall of Famers, basically. And yeah, they, they, uh, they were a little tired from the exam period and decided to schedule Dartmouth. And I got to cover MJ, who, you know, uh, they, they beat us pretty handily. Let me leave it at that. But I do have, uh, I do have a video clip that I, I love to share.

I'm pumped.

But again, tube socks, Fred, and You know, no, you know, uh, short shorts, and we all had more hair than we did, uh, than, than in 1983.

I mean, I can't, I can't believe this wasn't part of The Last Dance documentary with Jordan. You know, this should have been the beginning.

Yeah, I really, I personally take credit for kind of setting him on his career. You know, I was a huge confidence booster for sure.

Well, I will tell you that my, my basketball career had a North Carolina turn. I wanted very much to go to Carolina because of Jordan, and I went to a basketball camp called Five Star Basketball Camp.

Oh, sure.

Big deal at the time.

Big deal.

I— all of a sudden, the first person I saw at Five Star was Rasheed Wallace, who later goes to Carolina, and he was really cool. He asked me to go shoot with him, and we were shooting around, and he was like, oh, you really can shoot. And I was like, yeah, yeah. And he was, you know, dunking left and right, like doing all these things. I was so scared. He was 7 feet tall. He was just unbelievable. Uh, and he goes, let's shoot. And he matched me shot for shot all around the court. And it was pay phones back then. I called, called my mom from the pay phone and I said, the dream is dead. Come pick me up.

The dream is dead. Cooked us a reality.

There's a 7-footer that can do everything I can do.

Yeah, my, my camp counselor at Five Star was Doc Rivers.

Yeah.

Again, I go, I, you know, I better study hard at college pretty quickly. So.

Oh my gosh. Well, for anyone wondering what podcast they're listening to, I promise we're not gonna go any further into our basketball careers. But Mike, can you tell us a little bit about yourself, your background, and for anyone that's not familiar with Alumni Ventures?

Yeah, Alumni Ventures is a company I started 11 years ago. So if you go really back in time, right after Dartmouth, I joined a venture capital firm called TA Associates back in 1986. And so really fortunate, a tremendous group of people there, got exposed to the industry early, big influence on my life. And then studied at Harvard Business School and met a guy named Clayton Christensen, who was also a huge influence on kind of my life and how I think about technology and innovation. And my career has really been at, you know, kind of at this intersection of technology and venture investing and entrepreneurship. And I, you know, I think of myself a little more as an entrepreneur than a VC, but was able to bring those things together, you know, over a decade ago in forming Alumni Ventures. And like a lot of entrepreneurs, it was kind of from a personal experience that You know, obviously, I believe venture capital is super important. That has become, I think, clear to everyone over time that it's really the engine of, you know, the world economy. And, you know, I found it really hard to get access to the very best deals when I was not in the business. And so, you know, the simple idea is, you know, by joining forces, you know, capital, expertise, networks, that a network approach could be better for everybody. And so started with my alma mater and, you know, now have communities around most of the major U.S. institutions. We get into great deals because of our Rolodex, our network. And, you know, we really lean into this idea of, you know, bringing more people into this asset class. And we do a lot of education about our point of view on venture capital, how you put together a smart venture portfolio, the real importance of co-investing. Alongside, you know, tier 1 VCs and understanding our role is as a co-investor that we're not going to be on the board. We're not going to price rounds, but we're going to really try to kind of fight above our weight class by being helpful to an entrepreneur because we have this enormous network of, you know, 15,000 investors and you know, syndicate members and, you know, literally one click away from, you know, an order of magnitude more people than that because of this approach, which is, you know, different than a lot of other VCs that lead the rounds of financing. So that's the story and we've built it now to, you know, we've invested and raised over $1.5 billion. We, you know, we invest in about 300 companies per year. You know, some of the companies that might be familiar with our— with your audience, you know, we're investors in Circle and in Groq, you know, Lambda. You know, you can go to our website and see, you know, I'm going to leave out amazing companies, but it's a really strong portfolio. And again, we think that, you know, the very simple proposition is, you know, to a retail investor, show me your venture portfolio, we'll show you ours, and which would you rather have, you know, kind of thing. And so that's the core idea, Fred.

Yeah, Keith, I love it. I think it is so smart. I love the— I first got exposed from the alumni

uh,

side of it from like, uh, that community of, of looking at a university and, and tying into that. Can you talk a little bit about that part of it and the model itself? Uh, yeah, I might want to dive into the community piece a little bit because I think it's really unique.

Yeah, so, you know, obviously where do you start building a network-based, um, venture capital firm? Well, you know, uh, There's so much in our society that bonds people together. As, you know, we started the conversation about where you go to school, that's just part of our culture. You know, if you're another Dartmouth alum or another Trinity alum, you're way more likely to, you know, pick up the phone and talk to somebody. So there's that bonding. There's also an intersection of, boy, that's where a lot of great entrepreneurship happens. Obviously, you know, there's stories of Google and Meta, etc. You know, we're coming out of the research, coming out of, you know, where people meet their business partners. It is just a natural nexus of entrepreneurship. And, you know, it's obviously one of the things that's made the US technology scene so powerful is, you know, MIT and Stanford and Harvard and, you know, all of these incredible colleges, universities, and alumni networks. So, you know, the idea is we could invest together as fellow alums. That would build trust. That would give us access to deals. I mean, getting into really the very best deals is competitive. And, you know, it's a lot easier to pick up you know, the phone and reach out to a Yale founder if you're a Yale alum and say, this is who we are, we're a community of alumni, fellow alumni. But, you know, when you're an entrepreneur, you know, sometimes dealing with hundreds of retail investors is not how you want to spend your day. So You know, you can kind of get the benefits of having this huge network, but, you know, we come into a deal really as one check through an SPV and really, you know, operate as a venture capital firm. So we kind of shield the entrepreneur from, you know, a particular alum trying to call up on a Thursday afternoon saying, how's your quarter going?

Yeah.

And bothering an entrepreneur. So Yeah, so, and then as we've expanded, you know, we expanded to other alumni groups and now we're really, you know, we feel we have pretty good coverage on that.

Yeah.

And our second generation is really about expanding around areas of investing interest. So having an AI fund, having a blockchain fund, you know, having a health tech fund, you know, is really part of our second act as well as trying to take the AV story, Fred, globally. So obviously a US network is great, but we just, just in the last 6 months opened up 2 new offices, one in Tokyo and one in Great Britain, because the vision I have for this network is it's a global— Network of individuals, portfolio companies, you know, and business partners. So we still have a long way to go in kind of fulfilling that mission. But, you know, our goal is, you know, there, there's a day where, you know, we're, we're investing in an Israeli startup in cybersecurity and they want to raise their A round in Silicon Valley. And they want business introductions in Asia. And the AV network helps facilitate all of that to create value for the entire ecosystem.

I love it. Is there— I would imagine early days, maybe you've worked through this with the model, but as a Trinity guy, I'd be very interested in investing in the Harvard alumni startups maybe more than the Trinity ones. Just getting all those Trinity listeners out there. But is it, is it circled? Is it like, this is the—

No, it's a soft circle. So, you know, people are, you know, anybody really that's accredited is allowed into any of our funds. So yes, we have, you know, a pretty significant percentage of the community, like our particularly popular ones are MIT and Stanford. You know, the Harvard ecosystem is really strong entrepreneurially. So yeah, we do open it up. And a lot of our investors, you know, we've tried to make this, Fred, as similar to owning public stocks as possible. So, you know, you can, you can go into more than one fund. You can just do this deal by deal. So, you know, people that are just looking to complement something they already have in their venture portfolio or maybe are new and just kind of want to go slow and, you know, dip their toe into venture investing. You know, we facilitate, you know, join our syndicate, you know, it's free. And we— you start seeing the deals that we're actually doing and you get comfortable and you hear our people. As I mentioned, we do a lot of education where we're saying, you know, we just made this investment in this new nuclear company. Here's why we did it. Here's the lead. Here's the you know here are the risks. Here's the opportunities. You you know you see how we think. You know as you know and your listeners know that this stuff is only obvious in hindsight. So you know but we go through our process in a very transparent way, and then people get comfortable saying you know boy this these people. know, do the work. They get up every day. They're getting access to deals that I don't even hear about. Um, you know, and it comes back to this, I think, even more fundamental point, Fred, which is just this is such an important asset class, right? Yeah. And, and one of the things I've seen even in the last, you know, 10 years of building Alumni Ventures is there's so much value now created privately. You know, when I started out, companies like Apple would go public at a pretty reasonable valuation.

Yeah.

And you could really wait for companies to go public and there'd still be enormous value accrued there. But now you have companies that are, the first $50 billion of value creation is done kind of in this private realm. And so, you know, I think that's a bit unfortunate, frankly, that more people aren't being able to invest in SpaceX or Stripe or Anduril or Grok or, you know, these kinds of companies. So we try to do our part in making it more accessible at the very least, but it's still You know, and a lot of people view this, oh, I just have to wait for the IPO window to open up. And I, you know, I'm less convinced that it's not as open as it's going to be. Meaning, you know, I think a lot of well-informed entrepreneurs are making the choice rationally to say, you know, I'd rather stay private. You know, I can attract the people, I can provide liquidity through secondaries and tender offers, and I can raise— Yeah. as much money as I need if the company's doing well in the private market. So why deal with the cost and the short-term perspective and frankly, just the headache of being a public company? So, you know, the number, I think this is true, the actual number of public companies is flat or shrinking year over year for the last few years because companies are going private. There's a lot of PE people. And just, you know, again, you know, we do have companies go public, but just, you know, the net number is pretty small. So, you know, I almost think there's 3 markets now. There's public equity, there's venture capital, which is really about the emerging technology play, which is kind of a power law business. And then there's this late-stage private.

Yeah.

Which are these companies that are clearly have product-market fit, clearly have de-risked a lot of the layers of risk and have, you know, multi-billion dollar valuations. You know, there's hundreds of them now that are just still private that I, that I'm calling kind of late-stage private. So I almost think there's 3 markets. And I think an ideal portfolio, and this is true of the most sophisticated capital, is They have allocations to all 3 buckets.

Yep. Yeah, it's, it's crazy how much that the venture capital bucket has evolved over the past 10 years. Uh, and I agree with you, there is that, that private equity bucket now that's evolving for the later stage too. Um, I'm curious, you mentioned the power law, uh, and I think, I think most of our listeners understand that, but the, the Just if anyone isn't at a high level, it's the idea you make 10 investments, one of them is going to be your home run, and that is going to carry the entire 10 investments. The other 9, 2 will do okay and 7 will go away, uh, is sort of the, the math there. When you're running such a large community, how do you, how do you help people understand that, right? Because I know people that I, I'm friendly with maybe are not— in this world, you know, they're used to buying, you know, one stock that's gonna do pretty well and they're gonna watch it. And it's like, no, no, you have to get the 10 here and you gotta roll and know that the first 9 that aren't gonna do well, you're gonna find out about them before the one that does really well also.

Yeah, I mean, there's a saying in venture capital, your lemons ripen early, right? Which is this, you know, there's a couple of different things that are really important understand about venture capital. One, it is absolutely, as you said and described well, Fred, a power law. Absolutely. So, you know, you have to be prepared to think about this as a portfolio. And so, you know, you could, and so that's one. Number 2, I would say is how big of a portfolio do you really need in order to get the math to work right? And it's not doing 1 or 2 venture deals a year. I mean, that's like going on DraftKings or something, right? Yeah. You can get lucky and then think you're brilliant. But if you really look at the math, which is very similar to— I think a lot of people are familiar with the math of ETFs with public equities versus managed money.

Yeah.

You know, the math is the math. And the math really says for a venture portfolio, in order to kind of triple your money, which is kind of a good rule of thumb for a venture fund, is you really should be looking at 50 to 100 companies minimum that you invest in, you know, over the course of probably 3 to 4 years, just so you're not kind of timing a market to the good or the bad. So, you know, what we try to train our people, our customers about is have a budget, have an annual allocation. You know, maybe it's $50,000 a year, maybe it's $500,000 a year. Your budget is your budget. Put that to work over 4 or 5 years and really try to Target a portfolio of about 100 companies. The math says if you do that, you greatly reduce your chances of losing money. It really drops off the cliff. And then your chances of doing kind of venture kind of numbers really go up. And then the third thing that I will just say is part of our DNA and something that I really try to communicate is the quality of the lead investor is the hack that you want to use. So the deal that your local angel group is seeing, which you may want to do because it's fun and interesting and it's supporting your local economy, that is not what we're talking about. We are talking about deals led by Andreessen and Sequoia and NEA and USV and the top-tier VCs. Yeah. That's a different league and a different ballgame. And those are the kinds of deals we try to bring to our customers. And by pooling money and networking, we get access to those kinds of deals where if you're an individual, you really, you really have no shot. And the math again says the good companies are there with those lead investors. And it is not necessarily that those people are smarter or better than, than other people. It is because if you're an entrepreneur, you have your choice of lead investor and that's where you go.

Yep.

So this is, you know, this is, this is Connecticut women's basketball. Right? It's, you know, they, you know, they are picking the very best players in the country to assemble their roster. It is not because they are better coaches, you know, kind of thing. Yeah. But the correlation is true. So when you assemble this portfolio of 50, 100 companies over, you know, 4 or 5 years, You want the vast majority of those companies to have incredibly strong lead investors, you know. And again, you know, those— it's not just the names that you'll all recognize, but it's the partners within those firms that have really domain expertise in their business. It can also be a name of a VC firm or individual that you haven't heard of, But they are so good at cyber that, that is, you know, that is an amazing lead for that particular stage or that particular company. And as we go globally at Alumni Ventures, the lead investors who are going to help that firm in Australia break through It may not be a name you recognize, but it is the right firm. So it's— but it's all about co-investing alongside the right lead investor is really an important part in putting together kind of a tier 1 venture portfolio.

Mike, I had a question about the communities. One of the things I was thinking about as you launched this, right? Like, I love this sort of like hub and spoke model. You've got Yale here, Harvard there. That they can activate those communities locally and then it ladders up to you all. How do you— how did that start to snowball and then how do you maintain that interest? You mentioned like angel investing, which is sort of naively where my head went originally. And now knowing this is way more sophisticated than that, but talk to me a little bit about that community and maybe how do you keep it robust and active and excited in all this?

Yeah, so a lot of it is communication. So we do, we do things like in the micro level. So, so first of all, you should understand we have 10 venture teams within Alumni Ventures. So we're, you know, roughly 130, 140 employees, but we have 40, 45 full-time venture professionals, VCs, broken into 10 teams. And they act like little venture funds. So they're sourcing deals, they're evaluating, they're doing diligence, they're developing their own areas of vertical expertise. So, you know, we, we have a space guy, we have a cyber guy, we have 3 or 4 people doing AI infrastructure, and they know the deals and they know everybody that's a lead. So it's really important to understand that, you know, these are the venture capitalists that get up every day within Alumni Ventures. So, you know, if one of our people is doing a nuclear deal, like we closed one today, you know, that teammate who knows all about the space, has done the due diligence, will basically do a very quick 10 minutes, hey, we just made this investment, community. This is why we did it. Here's the lead. Here's the URL. You can check it out. Um, our community loves that. They love, they love knowing what they own, how their companies are doing. Yeah. They love to then follow them in the news. They set up kind of Google alerts or ChatGPT, you know, reviews of their portfolio. Um, So that's like at the incremental level. On the other side of the barbell, we actually like getting together with our people. So, you know, in real life stuff is really important. So, you know, almost every week we're doing an event. So we have, you know, we have a nuclear night and we invite our portfolio companies and our investors and we think it's really important. Yeah. And it's fun and it's energizing and it builds community. And, you know, I'm maybe old school, but I'm still a big fan of get out of your office.

Yeah, sure.

Go meet other people, go learn something. They're a lot of fun. Again, if people follow us on LinkedIn, you know, we post the pictures of our events. People learn, they network. Our portfolio companies love to come and tell their stories. You know, we talk a lot. You know, as I mentioned, we do, sometimes it's an educational night where we're kind of like, hey, here are 3 deals. Here's how we looked at them. Which would you do? You know, kind of thing. We try to make it fun and interesting.

Very interesting.

So yeah, you build community by, you know, communicating with people and then actually physically being with them as much as you can. So again, almost every day, We're doing big events, we're doing dinners, we're doing, you know, roundtables with our portfolio companies where they just are sharing challenges with each other. So, you know, we're big believers in the in-real-life stuff.

So I want to get you out of here on 2 questions. One is, how do you— what do you think the future of venture capital it's going to look like? How do you think this is going to evolve? There's obviously, you know, AI is sort of disrupting all sorts of things. There's a lot of people using just AI to source deal flow or validate or vet or invest, right? There's the ETFing of venture is rumored. Curious what your take is on where this is going.

Yeah, I mean, if I were to give you kind of hot takes on that, I think it's going to become more global. Right? I think, you know, this started out a long time ago in kind of Boston and Silicon Valley. It works. It is spreading. That's good. Yeah. So there, you know, market share is going to become more diffuse. That doesn't mean I think Silicon Valley is going to zero. I just think there are more great places that people want to live, work, and create great companies. So there are fantastic startups in Mexico City and in Copenhagen. That's, that's, that's good stuff. So I would say that's one. I would say AI is the biggest technology of my lifetime. And I think there will be bubbles, there will be pivots, but this is a big deal. It is going to impact every country, every business, and every individual's career. I think it will get diffused. I think there will be a lot of unintended consequences, good and bad. Great, great new companies are going to be created. I think people have to reset about the scale here where, you know, we're talking we're going to be seeing $10 trillion companies. We're going to be seeing Just enormous value created. And I think it's going to impact— and that's good for VC and good for investing. Whenever there's disruption and change, there are new winners and losers. And yes, there will be backlash. Bet on it. Okay. There will be There will be bad things happen because of this new technology. You can bet on it. But again, just with the, with the benefit of time, seeing the personal computer and the internet and the dot-com bubble and mobile, these things, you know, you don't put back in the bottle. And I would say this this, this is also a global race, right? That, you know, you are not going to have one company be able to say, I'm not going to play. You are going to go— you're going to be an ex-company. Yeah. If you're a country that says we're going to regulate the hell out of it and we want to freeze in time, you are going to fall behind the rest of the world. If you're an individual managing your career And think that you can wait and avoid this, that is going to put you on a different career trajectory than if you lean into it. So I think it's AI all the way down. From a venture capital specific perspective, I think it is an amazing tool to do what we do better. So, you know, I think Alumni Ventures is in a position which we disproportionately benefit from AI. I sent out 54,000 K-1s this year, Fred. And so, you know, more technology, more AI, please.

Yeah.

Portfolio monitoring, for sourcing, for helping portfolio company X make a connection within our network. In a more automated AI-driven way. All of that is super good for us. I think there is going to be increasing opportunities for tokenization of assets, including venture assets. I think that's in the future. I think, but I think there's also a place for humans in this in this, in this world. You know, we have an AI-first fund because we just believe that, you know, for everybody that spends their day on the computer and Zoom and AI, they're gonna go wanna, after work, go join a running club. Or they're gonna want to, you know, go hang out with other cool people and learn something new and, and be around other humans. There's, there's hundreds of thousands of years of evolution that are in our brains. that are pretty hardwired. We like being around other people. We like, you know, we like nature. And so I think this is all tremendous opportunity. I am clearly a tech optimist.

I

don't disregard— because I've seen the bad things that come with mobile. I've seen the bad things that come with all technologies. But I'm sitting here in a, in a mill building where people worked 6 days a week, 12 hours a day, and were 12 years old making denim. So, you know, and, and the, the, the charity one floor down was basically taking care of kids who were orphaned because their parents were, were killed on the machines. And life expectancy for people working in this mill was 45 years old. So, you know, technology is the way our world is run. We're toolmakers. And I would rather lean in and help use technology to solve problems versus try to, you know, romanticize going back in time.

Yeah, I agree completely. Well, Mike, this has been completely enjoyable. Thank you so much for sharing your insights and your time. Where can people go to learn more about Alumni Ventures and, and get involved?

Yeah, it's really simple. Go to av.vc. You can go put ChatGPT or go Google it. Um, a great first place to start is attend one of our events to kind of, you know, learn about a specific area. Um, again, all of our alumni fund stuff is really open, so that's a great place to go as well. And I would say join the syndicate. It's free. It's no obligation, but you actually get to see the deals we're doing and, you know, hopefully develop a lot of confidence to, you know, add this to your portfolio. We think it's— we think it really belongs in every thoughtful portfolio is having a small, appropriate VC allocation. And you got to start somewhere.

Mike, thank you again. This has been awesome.

Excellent, Fred. Enjoyed it.