Alumni Ventures: Understanding the Opportunity of Venture Capital for Accredited Investors
MANCHESTER, NH / ACCESSWIRE / December 22, 2022 / As individual investors look for high-return opportunities in a rapidly changing investment landscape, the world of venture capital investing has become increasingly popular. In fact, younger and wealthier investors continue to look beyond the stock market for above-average returns, with 80% turning to alternative investments according to a Bank of America Private Bank study in June 2022. Alongside this increased interest, many VC-backed startups have seen significant growth which has added to investor interest in these amazing new companies. The potential for impressive financial returns from investing in private companies augments the portfolio diversification of an asset class with a different risk-return profile than traditional investment options.
While venture capital investing has historically been inaccessible to most individual investors, with the rise of firms like Alumni Ventures, this is no longer the case. Alumni Ventures is a groundbreaking new venture capital firm founded in 2014 with over 8,000 investors and $1 billion in capital raised that offers diversified venture portfolios specifically designed for accredited investors.
Following the passage of the Jobs Act of 2012, accredited individual investors now have increased opportunities to invest in alternative asset classes that were previously available almost exclusively to institutional investors, endowments, and the ultra-wealthy. Alumni Ventures has been a pioneer in offering smart, simple venture capital funds for accredited investors. The SEC has set guidelines that define who accredited investors are and therefore who can access these new opportunities. An individual accredited investor: :
(a) has income that exceeds $200,000 (or $300,000 with a spouse) in each of the last two years, and expects the same for the current year
(b) has a net worth of over $1 million, either alone or with a spouse when excluding the value of the primary residence
(c) holds certain professional designations approved by the SEC
Accredited investors can now access a more diverse set of investment opportunities than previously available, but few firms have worked to make this simple. Investing in individual start-ups can be risky and it would be very difficult for an individual investor to source and invest directly in a portfolio of the most promising startups. Alumni Ventures was founded to solve this problem by offering smart, simple venture capital funds to accredited investors. By following lead investors and offering diversified portfolios with a small minimum investment, Alumni Ventures funds make it easy to help investors mitigate risk and participate in the potential rewards of the asset class with a single investment.
The Value of VC Investing
Venture capital is an essential form of financing for many of the most promising startups and small businesses. By investing alongside established venture capital firms, Alumni Ventures can help their portfolio companies expand and succeed through its community of experts, innovators, and investors. This new ability to access promising, high-growth startups makes venture capital an attractive option for investors who may be looking to diversify their portfolio.
″ Alumni Ventures helps investors diversify their portfolio by investing in highly competitive venture capital deals that historically have only been open to institutional investors, family offices, and the ultra-wealthy.”, states Luke Antal, Co-Founder & Chief Community Officer of Alumni Ventures. “As an accredited investor, you decide which of our funds work best for you, your level of investment, and the amount of your engagement in our investing community. Our funds based on the innovation found in many university alumni communities offer an attractive entry point for many of our investors.”
Recently executives from Alumni Ventures outlined three benefits of venture capital investing and opportunities for accredited investors:
- Gaining access to highly competitive, pre-IPO investment opportunities. Over the last two decades, startups have been staying private for longer and therefore much of the value creation is occurring before they IPO (BCG, 2022). Investing in private companies offers the opportunity to participate in that upside at an attractive entry point. Venture capital investing provides access to private, pre-IPO opportunities when valuations are lower and the performance has the potential to outpace investing only in public companies.
- Diversifying your investment portfolio. Investors often cite diversification as one of the key reasons for wanting to invest in venture capital. Many of the world’s most sophisticated institutional investors embrace a sizable allocation to venture capital in their portfolios for good reason. It is a longer-term private investment that typically doesn’t fluctuate with public market volatility like a short-term stock portfolio and offers the potential for outsized returns.
- Aligning your investment strategy with your values and passions. Different individuals have different values and interests, so it makes sense that there would be a wide range of options when it comes to investing. This is where targeted thematic funds come in handy, allowing investors to explore avenues that represent their own personal values. Whether it’s blockchain, AI, health tech, or seed-stage investing, there are funds that align with the passions of each investor.
The investment landscape is changing rapidly, with economic conditions, new regulations, and the rise of artificial intelligence (AI) all having a major impact. This is resulting in a paradigm shift for the industry as a whole and has highlighted the growing importance of portfolio diversification. Among the various new investment options that are now open to individual investors, venture capital can be an innovative way for accredited investors to diversify their portfolios, participate in exciting new growth categories for the economy as a whole, and earn attractive returns.
About Alumni Ventures
Alumni Ventures offers accredited individuals access to network-powered venture capital - a key asset class missing from the portfolios of many sophisticated investors.
SOURCE: Alumni Ventures
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