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AVG Offers Smart, Simple Venture Portfolios
How We Can Partner with You to Build Your Investment Adviser Business
0 ALUMNI VENTURES GROUP VC IS A FANTASTIC ASSET CLASS
Venture Capital Has Consistently VENTURE IS AN IMPORTANT ASSET Delivered 2x of S&P 30-year annual average for VC returns 18.31% CONSISTENTLY STRONG RETURNS
Top quartile of venture firms far outperform the venture index
Asset class has strong tailwinds
1 ALUMNI VENTURES GROUP Give Your Clients Access to Venture
• Most sophisticated portfolios should have a venture allocation of 5-15% • Largely uncorrelated with other assets • AVG provides smart, simple approach to VC investing
2 ALUMNI VENTURES GROUP How Do You Build a Smart Venture Portfolio?
AVG’s Five Rules of Smart Venture Investing
3 ALUMNI VENTURES GROUP AVG RULES Venture allocation 5-15% 1. Pick the Appropriate Allocation for most individuals
• Endowments and foundations in top quartile of performance had ~15%+ allocation to private TOP PERFORMERS PUTTING MORE MONEY IN PRIVATE INVESTMENTS investments
• Top-decile performers increased allocations over past 20 years to 40%+ in many cases
4 ALUMNI VENTURES GROUP AVG RULES
2. Build a Large Venture Portfolio
“N” should be at PERFORMANCE BY PORTFOLIO SIZE least 50 deals—like our Select Fund
• Power law “hits” industry
• Minimal chance of loss at 50 investments
• For 3x fund returns, the bigger the portfolio the better
5 ALUMNI VENTURES GROUP AVG RULES STAGE
3. Diversify Your Portfolio
• Diversify by sector, stage, geography, lead manager, vintage
• AVG Select Fund a good example
SECTOR GEOGRAPHY
6 ALUMNI VENTURES GROUP AVG RULES 60% of AVG’s deals are co -invested with top 4. Invest with Smart Money -quartile VCs
VENTURE FIRM IRRS—BY QUARTILE RANKING
• Top-quartile firms dominate returns 50%
• Investing alongside strong leads—especially top- 40% quartile—makes a big difference
30%
The first takeaway is that funds with the top 20% returns come from the prominent venture capital firms we all know and love….Second, 10% funds can be successful without a large number 0% of billion-dollar valuation investments and a 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 herd of unicorns. -10%
Source: PitchBook Benchmarks, Private Markets Data Through 3Q 2018
Source: www.benzinga.com/economics/15/07/5720899/the-holy-grail-tracking-top-venture-capital-returns
7 ALUMNI VENTURES GROUP AVG RULES
5. Invest with Discipline
• Evaluated and scored by experienced investors
• See lots of deals • Rigorous due diligence
8 ALUMNI VENTURES GROUP PRACTICING WHAT WE PREACH
AVG Follows Every Smart VC Best Practice
• Our Select Fund portfolio is ~50 venture investments
• We diversify portfolios across sector, stage, geography, and lead investor
• We co-invest with top-quartile investors • We run a highly disciplined and rigorous investing process
nd 5 2 9 500K ~250 100 Offices in VC Activity Supporters Deals/Year Employees
SECOND MOST ACTIVE VC FIRM IN U.S.
9 ALUMNI VENTURES GROUP AVG: Your Venture Capital Service Provider
What We Offer You & Your Clients
10 ALUMNI VENTURES GROUP ONE OF WORLD’S MOST ACTIVE VCS
Deep Product Line & Staff
• 100 full-time professionals; half are full-time VC investors
• Five offices, with four in VC hubs (SF, Boston, NYC, Chicago)
• Community of 4,000 investors and 500,000 subscribers, growing 50% YoY • 17 alumni funds (open to alumni), source of all Select Fund investments
11 ALUMNI VENTURES GROUP HOW WE GET ACCESS TO THE BEST DEALS Identifying Top Prospects ~1000 deals/mo
Network + Boots on the Ground
Gaining Access to Deals • Active deal searching by our teams, with robust due diligence
• Sharing deals with VC firms (because we don’t lead)
• 500K connected network can help source, vet, and aid portfolio companies Vetting & Scoring • Shared back office staff to help execute
Close on Best ~15 deals/mo
Monitor
12 ALUMNI VENTURES GROUP AVG’S SIMPLE PRODUCT LINE
Select Fund Draws from Deal Flow of Alumni Funds
17 Alumni Funds
Deals sourced & shared by ~50 investment professionals from alumni communities
Berkeley Alums | Strawberry Creek Duke Alums | Towerview Penn Alums | Chestnut Street USC Alums | Expo
Brown Alums | Waterman Harvard Alums | The Yard Princeton Alums | Nassau Street UTexas Alums | Congress Ave
Columbia Alums | Fission MIT Alums | Castor Stanford Alums | Spike Wisconsin Alums | Bascom
Cornell Alums | Triphammer Northwestern Alums | Purple Arch UCLA Alums | Westwood Yale Alums | Blue Ivy
Dartmouth Alums | Green D
DraftIndex behind-like ourSelect alumni Fund funds Drafting on deals from Alumni Funds
Select | Diversified, index-like portfolio of select AVG deals 13 ALUMNI VENTURES GROUP AVG PRODUCT LINE SAMPLE SYNDICATION DEALS
COMPANY SECTOR NOTABLE RAISE/EXIT
Immune system drugs $132M raised July 2018, led by Fidelity, …Add Syndications Theil
Consumer credit $17M raised August 2018, led by Sallie Mae • Offered to our top 5% of customers
• Normally requires $250K investment minimum Financial services for $34.5M raised March 2019, with women MarchRethink Impact, PSP Growth, across AVG Funds to access Syndications Salesforce Ventures, Khosla Ventures,
• ~8-10 AVG Syndication deals a year 14 Food delivery $77M raised Aug 2017, led by Nestle subscription • All deals have been invested in by AVG fund and
scored well Industrial safety $20M raised Sept 2018, led by RTP technology Ventures • Syndication members simply opt into what interests them 3D micro-location $24M raised Feb 2018, led by Fontinalis technology Partners • Standard 2/20 fee structure applies Holographic display $28M raised August 2019, led by Bosch Venture, Taiwania Capital
Personal loans $32M raised Feb 2017, led by Rakuten
14 ALUMNI VENTURES GROUP HOW IT WORKS FOR YOUR CLIENTS
Terms & Process
• Investment size $50K to $10M • 10-year funds, largely invested in 1-2 years, with some reserves TERMS • 2% annual management fee x 10 years; fee discounts for capital commitments of $1M+ • 20% carry after 100% of committed capital (including mgmt. fees) are returned to investor; AVG shares in 20% of profits
• White glove customer service • Investor proves accreditation, signs documents ONBOARDING • We build a portfolio of 30+ diverse companies PROCESS • 24/7 on portal, regular statements, newsletters and other info sharing • When companies are acquired or IPO, our investors receive a check
15 ALUMNI VENTURES GROUP READY ACCESS TO INFORMATION
Investor Reporting
• Transparency, with timely and open accounting and reporting
• 24/7 access to online Investor Portal • Semi-annual statements
• Single K-1 per fund (delivered by end of March) 16 • Consistent mark-to-market price • Gains generally distributed upon liquidity event
• Highly responsive Investor Relations Team
16 ALUMNI VENTURES GROUP Working with Investment Advisers
Benefits to You and Your Clients
17 ALUMNI VENTURES GROUP 17 Totals reflect sum of your client commitments—not what any single client invests AVG INVESTOR TIERS
$50K Benefits for All $1M+ Benefits for minimum Investors minimum Investors Who Commit More
• Smart, simple venture portfolios • At $1M+ commitment, 1.9% management fee on all investments
• First shot at next year’s fund • At $3M+ commitment, 1.8% management fee on all investments
• K-1 sent in March • At $10M+ commitment, 1.6% management feel on all investments
• Investor Portal & updates
• Investor onboarding package
• Access to Syndications
18 ALUMNI VENTURES GROUP SMART MONEY INVESTING IN VENTURE Endowments’ VC Allocation
19% Yale University
The best-performing 14.2% Princeton University endowments access alternative investments
15.7% Bowdoin College
19 ALUMNI VENTURES GROUP
Source: Investopedia NEXT STEPS
Interested?
• Contact us if you’re interested in learning more about how we can work together AVG is a good fit for • If you want to move forward, we’ll provide marketing 10-20% of your clients materials
• Select your most suitable prospects and introduce them to venture capital
• For those interested, schedule a 1x1 with AVG: call, dinner, webinar
Email us at [email protected]
20 ALUMNI VENTURES GROUP IMPORTANT DISCLOSURE
Each of the various funds of Alumni Ventures Group is a different series of Launch Angels Funds, LLC, doing business as Alumni Ventures Group Funds (AVG Funds). Each of the funds involves a different investment portfolio and risk-return profile. The manager of each fund is Launch Angels Management Company, LLC, doing business as Alumni Ventures Group (AVG), a Massachusetts-based venture capital firm. AVG is a for-profit company that is not affiliated with or officially sanctioned by any school. This summary document is for preliminary informational purposes, and no offering of securities is made with this document. Offers are made only pursuant to formal offering documents, which describe risks (which are significant), terms, and other important information that must be considered before an investment decision is made. Contact [email protected] with questions, or requests for additional information on AVG or AVG funds.
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and this fund involves substantial risk of loss, including loss of all capital invested. Moreover, you should not assume that any of the above content serves as the receipt of, or as a substitute for, personalized advice about investments.
All documents referred to in this material are available upon request from eligible investors and should be reviewed by you and your advisors for a complete understanding of their provisions. Early-stage companies are risky investments, not suitable for all investors.
21 ALUMNI VENTURES GROUP Appendix
Why Venture Capital Recent Investments Co-Investors Team
22 ALUMNI VENTURES GROUP TAILWINDS FOR VC
In less than a Increasingly, Value Created by decade, VC exit Private Ventures proceeds up 330%
• Companies are staying private longer
• IPOs becoming less compelling; more M&A & PE purchases VC EXIT PROCEEDS IN BILLIONS
350 GROWTH OF US PRIVATE/PUBLIC COMPANIES AVERAGE ANNUAL NUMBER OF IPOS 300 300
Public companies Private companies 500 451 250 450
400 200 350
300 150 250
200 100
150 70 108 100 50
50
0 0 1993-2000 2000-2016 2010 2018
23 ALUMNI VENTURES GROUP Confidential
Recent Investments RECENT INVESTMENTS September 16, 2019 AVG DEAL FLOW Company Stage Industry Location Co-Investors Description
San Calibrate Ventures, Developer of farming robots designed to facilitate Growth AgTech Investing in 250- farmwise.io Francisco Playground autonomous cultivation and organic farming. Taiwania Capital, Bosch Developer of a light field-based holographic displays Early Augmented Reality San Jose Capital, Khosla Ventures, intended to build a TV set capable of projecting 3D 300 Deals/Year lightfieldlab.com Sherpa Capital holograms into one’s living room.
Coefficient Capital, Provider of subscription-based dog food service Early E-Commerce Oakland intended to deliver customized meals and portion e.Ventures • Each Fund closes ~1-2 deals nomnomnow.com sizes. per month Washington, The Syndicate Fund, AOL Developer of applications designed for geolocation Early Big Data data marketing. • Look at 30+ deals for every one xmode.io D.C. Fishbowl Labs
we do True Ventures, Rise of the Early TMT Denver Developer of a global lens for technology signature. aurorainsight.com Rest, Promus Ventures • Diversified by sector, stage, M13, Vulcan, LG Tech Marina del Developer of a virtual reality device designed to region, lead investors Early Virtual Reality Ventures, Rey redefine the concept of teleportation. emergenow.io SK Telecom
Advanced UPS, Drive Capital, Jump Developer of an on-demand production platform Growth Chicago fastradius.com Manufacturing Capital, SkyDeck Capital designed to offer end-use parts.
San PeakSpan Capital, USVP, Cisco Developer of a cloud-based platform designed to Early HealthTech empower healthcare providers with HIPAA-compliant lumahealth.io Francisco Investments communication tools.
Mark Cuban, Revolution Developer of a medical platform intended to solve Seed HealthTech Los Angeles critical gaps by connecting the maternal health mahmee.com Ventures, Serena Williams industry.
Developer of a DME supply ordering platform Growth HealthTech New York Insight Venture Partners intended to improve patient care. parachutehealth.com 1 24 ALUMNI VENTURES GROUP Summary of AVG Pricing Events
SUMMARY OF AVG INVESTMENTS AVG UNIQUE INVESTMENTS As of 6/30/19 As of 6/30/19 Current Value $-Weighted # of Original Capital IPO = 6 Category Remaining Value (Capital Returned Time Since 339 Investments Investment Returned + Remaining Value) Investment Exit = 13
Up-Round / IPO 6 $6,691,515 $1,619,003 $1,970,214 $3,589,217 2.1 Yrs Converted Note = 67 Exit 13 $4,067,494 $7,364,063 $928,051 $8,292,081 2.2 Yrs Down-Round = 3 Full Write-Down = 7 Up-Round / 67 $24,402,099 $0 $39,716,726 $39,716,726 1.9 Yrs Converted Note
Down-Round 3 $400,000 $0 $139,737 $139,737 2.2 Yrs
No Change = 243 Full Write-Down 7 $702,000 $0 $0 $0 3.5 Yrs
Sub-Total 96 $36,263,108 $8,983,033 $42,754,728 $51,737,761 2.0 Yrs
No Change 243 $93,192,446 $0 $93,688,531 $93,688,531 0.9 Yrs
Total 339 $129,455,554 $8,983,033 $136,443,259 $145,426,292 1.2 Yrs
Unique Investments
Note: Current Value is based either on (i) cost + accrued interest (indicated as “No Change”), (ii) the pricing and dilution effects of down-round and up-round financings, (iii) the third party valuation or amount received in the case of an exit (such as an acquisition by an acquirer) or an initial public offering (IPO), (iv) a full write-down, or (v) similar determinations depending on the specific circumstances. An up-round generally means the further financing has occurred at a higher valuation (more favorable for an earlier investor), and a down-round generally means the further financing has occurred at a lower valuation (less favorable for an earlier investor), than the original investment valuation. Except for an exit or an IPO in which value was realized, there is no assurance that any particular value can be attained upon further financings, exits, IPOs, or otherwise. $-Weighted Time Since Investment is based on the sum of the following for all deals: each deal’s original investment amount multiplied by the time since investment, divided by the aggregate investment amounts.
25 ALUMNI VENTURES GROUP AVG CO-INVESTMENT MODEL
Accessing Top-Quartile Deals
• Co-investing with the best
• Bringing our own rigorous process: scorecards, investment committee, voting, hard floors, and caps
AVG TOP CO-INVESTORS
• Accel Partners • Madrona Venture Group • General Catalyst Partners • Goldman Sachs Ventures • Andreessen Horowitz • Menlo Ventures • Google Ventures • Battery Ventures • New Enterprise Associates (NEA) • Greylock Partners • Benchmark • Norwest Venture Partners • GGV Capital • Bessemer Venture Partners • Qualcomm Ventures • Intel Capital • Bezos Expeditions • Sequoia Capital • Khosla Ventures • Blockchain Capital • SV Angel • Kleiner Perkins • Dorm Room Fund • Thiel Capital • Lightspeed Venture Partners • Founder Collective • Union Square Ventures • Lux Capital • Founders Fund • Venrock • M13 • F-Prime Capital (Fidelity) • Y Combinator
26 ALUMNI VENTURES GROUP TRACK RECORD
Top-Quartile Returns
% Invested Year # Investments MOIC (Q2 2019)* Capital Returned
2014 12 47% 2.74x 27 2015 14 45% 1.73x
2016 25 30% 1.26x
2017 80 16% 1.20x
2018 148 0% 1.08x
*Total Value of a Fund’s Holdings (realized and unrealized) divided by Total Invested Capital (excluding the effect of fees)
27 ALUMNI VENTURES GROUP DEEP POOL OF INVESTING TALENT JUST A FEW OF OUR INVESTING PROFESSIONALS
45+ Investing Professionals
• Hundreds of years of VC investing and Mike Collins Anton Simunovic Andre de Baubigny Michael Madden company-building experience Founder, Chairman, CEO Chief Investment Officer Managing Partner Managing Partner • Raised hundreds of millions of dollars, Spike Ventures The Yard Ventures built dozens of businesses Trinity BA | Boston U JD | Harvard BA | Stanford MBA Stanford MBA • We’ve worn all the hats—and this is the culmination of our experience
Laura B. Rippy David Shapiro Ludwig P. Schulze Catherine Lu
Managing Partner Managing Partner Managing Partner Principal Green D Ventures Blue Ivy Ventures Waterman Ventures Spike Ventures Dartmouth AB | Harvard MBA Yale BA | Dartmouth MBA Brown BA | Columbia MBA Stanford BS & MS 28 ALUMNI VENTURES GROUP