For a long time, a select group of firms controlled the venture capital industry, handling billions of dollars for institutional investors and operating essentially as an exclusive club. Sovereign wealth funds, pension funds, and university endowments dictated the flow of capital, not smaller investors.
Today, the industry is changing. Individuals are able to invest in startups more easily thanks to new investment models such as rolling funds, private syndicates, and equity crowdfunding platforms.
Throughout this democratization of venture capital, one company has made its own significant impact: Alumni Ventures (AV). In fact, it has quietly worked its way to becoming a top-three most-active U.S. venture firm every year between 2018 and 2024 and the #1 most-active firm in ‘22 and ‘23 during the venture reset (per PitchBook).
Mike Collins, founder and CEO of Alumni Ventures, acknowledges the contradiction. “Yes, we’re a very active VC. Yet we’re still a new name to many outside the industry. That’s starting to change as more individuals learn about us and what we offer — professional, diversified funds where we build portfolios on behalf of our investors, or deal-by-deal opportunities for those who want to make their own decisions and invest alongside AV and other top VC firms.”
The concept of democratization is at the heart of AV. In 2014, when Collins started the company, he began with the unorthodox but straightforward premise that ordinary investors should have access to the same excellent opportunities as institutions. After working in venture capital and as an entrepreneur for decades, Collins saw firsthand how challenging it was for accredited investors to enter the market.
“Even I struggled, and I was well-connected. If you weren’t an institutional investor writing multimillion-dollar checks, you were shut out of the best deals,” he recalls.
Inspired by that realization, he launched Alumni Ventures with a single fund for fellow Dartmouth grads. He thought that alumni and professional affiliations were a strong attraction for investors and might also appeal to premium startups seeking funding. This strategy has recently been reinforced by a PitchBook study that found strong networks significantly increase the likelihood of success for startups (PitchBook Research 2025).
Industry insiders had their doubts about the concept; some wrote it off as a niche experiment that would never catch on. Collins notes, “People in VC that I respected told me we were crazy. They said retail investors were a hassle and that this model wouldn’t work beyond a small alumni group.”
But Alumni Ventures disproved its skeptics in a matter of years. Collins successfully spread the approach to Stanford, Harvard, MIT, Yale, and 25 other alumni ecosystems before expanding beyond alumni-based funds to include sector-specific investments such as strategic tech, AI, and health tech. Today, over 11,000 accredited investors have invested more than $1.5 billion with Alumni Ventures.
The same unorthodox thinking that worked with investors applies to Alumni Ventures’s investing strategy. The company does not lead fundraising rounds or take board seats like traditional VCs. Instead, it uses a co-investment approach, supporting businesses alongside other top venture firms such as Sequoia, Bessemer, and Khosla. Many startups are seeking investors to complement their lead VCs in order to secure important contacts, connections, and customers. With its thousands of investors and 850,000 members in its supporter community, AV offers those connections in abundance.
“Startups choose their lead investor carefully — it’s like a marriage,” says Collins. “But they also care who else is in the round. That’s where we come in as an excellent option. We try to provide a disproportionate amount of value to our portfolio company founders by helping them tap into the large and powerful network that serves as the foundation of our firm.”
This supportive, non-controlling approach has established Alumni Ventures as a reliable partner for entrepreneurs seeking funding without giving up strategic decision-making authority. Due to its vast network — composed of entrepreneurs, executives, and industry experts — the company has become especially appealing to high-growth startups like Oura, Cohere, and Rigetti Computing and helped Alumni Ventures secure a portfolio of 1,600 past and active companies. It seems to be working, as Inc. Magazine named Alumni Ventures to its 2024 list of “Most Founder-Friendly Venture Investors.”
“Venture capital isn’t just about writing checks — it’s about making the right introductions,” says Collins. “We get into great deals because of our network. And the bigger our network, the more valuable we are to startups.”
For investors, the impact of Alumni Ventures’ approach is tangible. That’s where AV’s Yellow Envelope tradition comes in. When an investment pays off, Alumni Ventures sends investors their returns in a bright yellow envelope. As Collins observes, “Our job is to distribute returns to our investors. The simple act of putting those distributions in a recognizable yellow envelope helps to keep everyone focused on what’s most important: accessing highly competitive deals and making our investors money.”
Just a little over ten years into their journey, Alumni Ventures has already proven that venture capital doesn’t have to be exclusive. By breaking down barriers and leveraging networks, the firm is opening doors for more investors — one yellow envelope at a time.
VentureBeat newsroom and editorial staff were not involved in the creation of this content.
