Page 65 - FON Spring Issue

FON MEMBER FEATURE
AV is strictly a co-investor, so we’re also looking for an established VC with experience in the stage or sector who is leading the deal. We’re very pleased with our co-investor set. Many are household names, like Sequoia, NEA, Andreessen Horowitz, General Catalyst, Y Combinator, Bessemer, etc. Additionally, within firms, there are top-performing partners; it’s our job to know that and seek them out.
The value of our network is the other real differentiator that gets us into deals. Our team assists portfolio companies, tapping AV’s network of over 550,000 community members and subscribers for assistance as needed. That might be an intro to a sales lead, a consulting call, sourcing a team member, etc. We can also bring multiple funding sources to bear. Several of our funds might participate in an opportunity. Or we might offer investors the ability to increase exposure to the opportunity by investing in a single asset fund alongside an AV fund.
3: What is your process for selecting deals?
Rigorous diligence processes, clear evaluation criteria, and experience matter.
At AV, we first ensure that the deal has an established lead investor in place, with terms already negotiated. Then, if after preliminary scrutiny, the deal seems of interest and fits fund thesis and diversification targets, we run a disciplined process to vet for risk-reward. This involves reviewing company material, speaking to experts in the industry, talking to the CEO, conducting our own due diligence, scoring the deal, and having multiple AV team members review it. We use the same process and scorecard across all deals, so our standards don’t vary.
4: FON: What do you offer that family offices couldn’t do on their own?
Venture capital is a high-risk, high-reward investment. So to ensure you maximize your potential for gain while minimizing risks, you should ask what is the manager’s unique value add and explore options. I think AV checks the boxes as a good asset manager partner as I’ve defined it. We look at a much wider range of venture opportunities than most family offices or individual investors can access and thoroughly vet themselves. We’ve built a very efficient engine for deal sourcing and evaluation that we put to work for our investors in every fund and every deal.
CASE STUDIES IN DEAL ACCESS FROM AV
We challenged Collins to provide examples of how his fund managers get AV into deals. He offered these three case studies.
FRESHLY: Monitoring & Cold Calling
Freshly delivers fresh, gourmet, ready-to-heat meals to your door. Nestlé acquired Freshly in October 2020 for ~$1.5B. The opportunity was sourced via direct outreach to Freshly CEO Michael Wystrach. Having just seen the announcement of a large Series C, AV reached out with an introduction of our funds. Michael promptly responded, informing us that one of his early investors was interested in some liquidity. We connected the
next day with the investor and purchased a portion of preferred equity from BrandProject at the Series C valuation. Investors in the round included Insight Venture Partners (HelloFresh, DeliveryHero) and Highland Capital Partners (Harry’s, Glasses Direct, Rent The Runway).
OURA: Connecting the Dots
Oura produces a smart ring that tracks sleep and monitors biometrics. Its rings have been used to try to detect early physiological signs of COVID-19, even being employed by the NBA to track player and staff health. AV Managing Partner David Shapiro was inspired by a book on sleep to search for sleep-related venture companies. Discovering Oura, he tested the ring for himself and was impressed by the product and company. That led him to connect with the CEO via a former colleague, leverage a reference from a portfolio company, and finally secure a last-minute spot in their Series B, which included Forerunner, Gradient Ventures (Google), and Square.
RIGETTI: Leveraging Our Alumni Network
We connected to Rigetti Computing, a full-stack, turn-key quantum computing solution, by working AV’s vast alumni network. Our Yale alumni and friends fund, Blue Ivy Ventures, connected with a Yale acquaintance to get an intro to CEO Chad Rigetti, also a Yale alum. We joined an extension to the company’s Series B, led by Andreessen Horowitz and with strong support from existing investors including Peter Thiel’s Founders Fund, Sutter Hill Ventures, Y Combinator, Data Collective, and others. We then followed that with an investment in their Series C, following David Cowan of Bessemer Ventures.
To learn more about how Alumni Ventures creates diversified venture portfolios to help family offices and accredited investors achieve their financial goals, please reach out to FamilyOffice@AVGFunds.com
*AV was rated by PitchBook as the most active venture investor in the U.S. in Q3 2020.
FON MAGAZINE / SPRING ISSUE 2021 / FONMagazine.com 65