#616 AI Can Find Startups. It Still Cannot Get Into the Best Deals | Mike Collins

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Mehmet: Hello, and welcome back to a new episode of The CTO Show With Mehmet. Today, I'm very pleased joining me, Mike Collins. He's the CEO of Alumni Ventures. Of course, as you might guess from the title of Mike, he's, he's in, in, in investment and, uh, you know, we're gonna talk a lot about, you know, startups, and we're gonna talk also about what trends he's seeing currently.

Without further ado, Mike, something I do with all my guests, I keep, you know, their personal introduction to them because I have a theory no one can introduce someone else better than themselves. So just, like, little bit about, like, how you started and, you know, what you're currently up to, like, why you started Alumni Ventures, and maybe we can start the discussion from there.

So the floor is yours. 

Mike: Mehmet, thank you, and, um, I'm pleased to be here today. Um, yeah, I started in venture capital in 1986, um, in Boston, right out of college, and, uh, at [00:01:00] a firm called TA Associates, which is, you know, one of the top venture capital firms in the world. Um, I, uh, worked there and then went from there to Harvard Business School, where I- You know, met and became friends with a, a professor named Clayton Christensen, um, who is, uh, one of the great thinkers, I think, of all times when it comes to innovation and entrepreneurship, um, and was a huge influence on me.

And have really spent my entire career at the intersection of venture capital and entrepreneurship and investing. I was very fortunate to, you know, found what I liked to do and was relatively good at early. That was more luck, I think, than anything. Um, but in 2013, I, [00:02:00] uh, started Alumni Ventures really out of kind of a personal frustration like a lot of entrepreneurs, which is on one hand I'd learned how important venture capital and entrepreneurship and innovation is in the world economy- Mm-hmm

and how really it was very difficult for individuals to have a portfolio of high-quality venture investments. It was really a business that kind of evolved in the 1960s for institutions, and through a variety of reasons, um, even to this day it is very hard for individual investors to put together a portfolio that is appropriately large and diversified enough, and consists of enough high-quality [00:03:00] investments, um, to really reflect what they should have.

I mean, it's, it's, it's very clear, Mehmet, uh, about, you know, with, with SpaceX going public at a $1.7 trillion valuation, Anthropic's gonna, I think, go out here at a huge valuation. 

Mehmet: Right. 

Mike: It is just an... There is just so much value now created in the pub- private markets that it's... I think it's really hard to say you have a ven- you have an equity portfolio if it's just public companies anymore.

So it's, you know, we all want diversification, we all want to own the machinery of capitalism, which is equity. Um- Right ... but, you know, public stocks are really dominated by 20 companies. You know, you buy, you buy, you buy indexes and you think you're diversified. Well, you're not that diversified. And- Um, [00:04:00] but even more, just so much value now.

Companies are not going public, and they're either selling or they're waiting. And so you have, you know, 500 to 1,000 companies that, you know, early in my career, those all would be public companies. You could buy Apple at the IPO or even a little bit later and still, you know, kind of ride the growth of Apple or Amazon or Microsoft.

Now, you know, going public is kind of the last stop on the train. And so, um, you know, that's what we try to do at Alumni Ventures. We try to make Building a venture portfolio is something that regular people can do 

Mehmet: Right. Mike, you know, this is something which always, for me, I, I didn't see it until I start to learn more about, you know, uh, venture investment.

But if [00:05:00] I would be someone who is detail-oriented, I should see what you just mentioned because, you know, we know that the opportunity in investing very early on when the company's still maybe in a pre-seed stage or let's say- Yeah ... for people who are, like, still not that, uh, confident, maybe in a series A, uh- Yeah

stage where they have a product market fit, they're looking for growth. Yeah. But yet when we still talk, and I'm, I'm talking here globally, by the way, I still talk even- Yeah ... to people in, in the US, in North America, in Europe, they have this doubt about startups, and they think it's, like, a very high risk.

And you know, when I try to tell them, "But this is the whole thing"- Yeah ... because if, if you measure the time, like Apple maybe and, you know, I think the technology companies that came out in the late '70s, early '80s, they were little bit faster, and people, as you said, they start to see. But if we look at the valuation, Mike, like, if we compare, like, the era of the [00:06:00] Apple and the Microsoft and, you know, these great IPOs of the times also to what we are seeing now, are we seeing, like, more, you know, aggressive growth that is happening at the same pace?

Is it, like, faster? What's the opportunity that majority of the people are missing out here, in your opinion? 

Mike: So I, well, uh, let me come back to this, um, very natural reaction of, oh, you know, venture capital is risky, right? Yep. And, and, and that is a totally reasonable position to have, and I think most people who say, um...

And, and it is risky if you do what I'm gonna call a random deal once in a while. So- 

Mehmet: Right ... 

Mike: your, your friend shows you a, "Hey, here's a seed deal. You can invest in it," and, or your, your accountant sends you a deal, and you do a deal or two a year. I agree with you. That is [00:07:00] risky, and that's more like you wanna do that 'cause it's, you know, it's fun to gamble, and, and maybe you're helping out a family member or it's fun.

That, that's fine. Um, but there's a couple of things about venture capital that is really important to understand for your listeners, I think. Number one is really good ventures end up with really good venture capital firms as their lead investor Um, so companies like Khosla, Andreessen, Sequoia, Benchmark, Lightspeed, GV, USV, you know, there's 100 to 200 really top venture firms worldwide, and if you are running a good startup, you are very quickly, probably at your A or your B round of financing, are going [00:08:00] to be bringing in one of those top or more of those top-tier players.

So The, the challenge is for most individuals kind of doing this alone, they're not gonna get into a Sequoia A round as an individual with a 25, $50,000 check. One, they're probably not even gonna hear about the company. Right. Two, the company is not going to bring them in to their deal and deal with a stranger that owns a little bit of their company.

They don't need the 25 grand . They don't, you know, they don't need the potential hassle of an individual. So on one hand, they're right. If you just do venture capital kind of randomly, that is not the way we think it should be done. We think venture capital should be done with a big portfolio where you are investing alongside really strong lead investors.

And if you put together a portfolio of, you know, [00:09:00] 25, 50 companies and they're led by these kinds of venture capital firms, I don't think that that's frankly any riskier than investing in many, a basket of 50 public companies. So it's like the, the key is how do you get access to a portfolio of 50 to 100 top-tier venture capital deals?

And that's really kind of the secret sauce behind Alumni Ventures, is we've spent the last 12, 13 years pooling together individuals. So none of us can do this alone, but together by pooling our money and pooling our network, we're able to compete and to get into deals like Grok, like Aura, you know- 

Mehmet: Mm-hmm

Mike: in companies like Anthropic and SpaceX and Stripe through our, uh, our sister company that does more later stage stuff. But, you know, we have, [00:10:00] we have a tremendous portfolio and that's why we exist. We exist to let regular people who, in the United States you still have to be a- accredited- Good ... which, you know, which is, we can discuss, kind of a crazy rule, but it is the rule.

You know, you can go to Vegas or Kalshi and bet on anything, but you can't put $25,000 into, you know, a portfolio of tier one VC deals unless you're rich already. You know, kind of crazy, but you know, those are the rules we live by. So, you know, AV really is a business that serves accredited investors, but we, you know, we really try to educate We really try to help people develop their own strategy and plan, and then help them execute that plan by really helping them to build a large and diversified venture capital portfolio.

'Cause we just think it is so important [00:11:00] that more and more people... It's not just, you know, let's just take SpaceX goes public. The first 1.7 trillion went to guys like me and institutions and sovereign wealth funds and family offices, and you didn't have to get into the seed round of SpaceX to do well.

There you did obscenely well. 

Mehmet: Right. 

Mike: But even if you were in the series B or C or D, you know, you were in w- you know, versus going in at the IPO, right? And, and again, I love SpaceX. I think there's a great future for space, and Elon is a generational talent. Um, but it's a lot... You'd rather have been into SpaceX at a $50 billion valuation, um, than later.

So I actually even think that there's not just two markets, there's actually three [00:12:00] markets. There's public stocks, there's venture capital, which is our space, and then there's these late-stage private companies, the companies who could have been, could be public anytime they want, but they prefer to stay private.

I mean, more and more entrepreneurs are saying, "I don't need to be public. I can raise capital privately." If, if you've got a good business, that's not a problem. I can provide some liquidity to my employees through secondaries. So the ability to kind of, you know, let, let your teammates buy a house or take some of your early advisors or seed investors and give them some liquidity takes the time pressure of selling the company or going public off the table.

So, and, and frankly, it's just you have a lot more flexibility privately. You're not gonna get sued if you have a bad [00:13:00] quarter. You know? Yeah. You're not gonna have, you're not gonna have macroeconomics things driving your stock down by 20% and all of your employees freaking out because of it. So, you know, there's a, uh, there's a lot of very rational entrepreneurs who are saying, "I prefer to stay private, thank you very much.

I'm in no rush." 

Mehmet: Right. M- Mike, all what you said is something, you know, every single b- the past two, three years, you know, I, I, I tried to learn a lot about, you know, the business model of, uh, a VC firm. I enrolled even in some, in some courses to understand more. I read every single book possible. And to your point, like, you know, you have to do a lot of bets until you find, you know, the one that can return the whole fund.

Actually, this is what you aim for. Now, but still we see the people who argue like, "Hey, I can do this kind of diversification [00:14:00] by putting like small angel checks, like $1,000 even, maybe 5K- 

Mike: Yeah ... 

Mehmet: in, in, in a bunch of companies." Do you... Like, and usually I tell people, "Hey, like maybe you can start with this, but if you want to really see like the big, you know, returns, it's probably better that, you know, y- you, you need to, to, to be investing in a, in a, in a venture capital, uh, as an LP."

So now, and again, the discussions start to, to come up because people they say, "Hey, like now AI can help me in finding these, these, you know, promising companies and all this." Yeah. What's the role really for the general partners now to, you know, to, to, to tell people like, "No. Okay, you can write your own checks, that's fine, but if you want to see like the larger picture, the bigger picture, you still need to have these connections to the GPs who are managing these firms."

Mike: Yeah, I, [00:15:00] I, I, I think it is v- put yourself in the position of a really good startup, okay? Um- Why are you taking money from this person? 

Mehmet: Mm-hmm. 

Mike: Assumption is, is, "Oh, I need the money, and they're giving it to me." Well, that's not really... If you're a good startup, that's not really the problem, okay? You're having really good professional venture capital firms, um, kind of competing to be an investor in your company, right?

So it's, it's a, it... Getting into, getting a venture portfolio is easy. Getting a good venture portfolio is nearly impossible for an individual acting on their own. And I just... I'm, I've been doing this 40 years. I just... It is really, really hard 'cause, you know, um, you [00:16:00] have to know about the company, you have to convince them to take your money, you have to, you know, build a portfolio of 50 to 100 companies.

And oh, by the way, then you also have to file tax returns on every one of those investments. If, if- 

Mehmet: Right ... 

Mike: the, the math basically says, you were pointing it out, if you have a portfolio of 100 venture investments, probably you're going to lose money even if you're a top venture firm In half of them. 

Mehmet: Mm-hmm.

Mike: And maybe a quarter of them you're gonna, you know, lose a little, make a little money. And then maybe 10% of those companies, 10 of 100, are gonna provide all of the returns. The issue is just you don't know which 10. I mean it's just you can use AI all you want, but there are so many uncertainties. These are things that don't [00:17:00] exist yet, so, you know...

And then, oh, by the way, if you knew which 10 out of the 100 that Andreessen Horowitz was doing were gonna turn out to be the home runs, why are they taking your money, right? So it just- Yeah ... is, it just is... Here, here's what I can say that's constructive. One, it is free to get educated, so learn about venture capital.

Learn how it works. Learn the terms. Learn the good firms. Look at the technology trends, you know. We run free webinars every week, um, online, in person, we have videos. There is AI. You can learn about anything if you wanna put your mind to it, right? So one, start p- with getting educated. Two, I feel very strongly that if you're going to invest in venture capital, you [00:18:00] need to invest alongside really top venture firms.

You have to either get into their funds- Right ... which takes an enormous amount of money. You know, 10, $25 million minimums for a lot of these venture capital firms to invest in their funds. So I was talking to a large Korean conglomerate, um, and they were trying to get into a top-tier venture firm's most recent fund, and they had $100 million and they could not get in They did, you know, they, the, the, the venture firm said, "We will put you into our health tech fund, but you're not getting into our flagship fund."

Mm-hmm. So access to i- these top venture firms is very, very hard because they've had relationships with 30 years with organizations and people, and they've made enormous amount of money themselves, so [00:19:00] they're investing their own money. So again, they're not interested in taking your $25,000, frankly. So- 

Mehmet: Yeah

Mike: but the deals that you want to get into at the seed, series A, series B have those kinds of firms leading the round of financing. So one, get educated. Two, figure out how you can get into top-tier deals. And number three is, how do you develop a portfolio that has 50 to 100 companies in it? Right? 

Mehmet: Right.

Mike: Otherwise, otherwise it is gambling. Otherwise it is for fun. Yeah. Otherwise... But to, to really, you need to think about it in the same way that very rich people think about it, and, and endowments and pension funds and sovereign wealth funds. They own public stocks. They own late-stage private [00:20:00] stocks in a portfolio.

Um, and they're owning- Mm ... a broad swath of hundreds of venture deals. Right. And they're probably in five or six different venture funds. And so they, they own equities along the life cycle, along the journey. And so- Alumni Ventures exists to help individuals with a lot less money, 25, $50,000, develop a portfolio of venture capital deals, late stage private deals.

That's where we can help supplement what you have in the, in the, in the public markets. And we do that because we've built up a huge network of customers and we pool money together. So together you add up the 50, $100,000 from 15,000 different [00:21:00] people and all of a sudden it's a meaningful check. Right. And more importantly, like why does this really good company where they're having their A round led by NEA or Bessemer bring in money from Alumni Ventures?

It is because that network, all of those individuals and r- and, and 1,600 portfolio companies are valuable to the entrepreneur. So Alumni Ventures I think arguably has the best network in the industry. So it's like if you're the entrepreneur, "Okay, I've got Sequoia leading my A round. They're putting in $25 million and I'm gonna take $2.5 million from Alumni Ventures.

Great. And their g- and their network is fantastic and helps me with introductions, helps me with recruiting, helps me, [00:22:00] um, achieve my business goals. And oh by the way, their network is also somebody I wanna sell my product to or when I do go public w- they're-- I'm gonna have a built-in network of tens of thousands of people who might wanna buy my stock at retail."

So It is, it is a very different approach, but it's really, uh, that's our mission in life is to help the individual investor do what the big institutions do, which is to participate in the engine of a capitalist world. 

Mehmet: Right. At early stage so you can, you know, uh, figure out, I mean, to find out that you are able to get these big, uh, returns, which probably an IPO cannot guarantee because I think I, I read sometimes, like, I can't remember the, the exact number, but it's a large percentage where IPOs, even they are shiny, like, of course we will [00:23:00] exclude the big ones like SpaceX probably, Anthropic is coming, OpenAI would come.

Of course, like, I'm sure these will be successful ones. But I mean, you know, majority of the time if you look at the company, um, stock price after a while, actually it, it, it decrease. And as you said, the people who've, you know, like they, they, uh, they get the gains are the ones who sell at the time of IPO, right?

Who are, who are the early investors. Now, I want to discuss something very important nowadays, uh, which is, you know, I'm hearing a lot of opinions about it, which is the AI and the evaluation and the valuation for the AI companies, Mike. Um, sometimes we're hearing, you know, in, in the wire about companies with zero revenues.

They have just, you know, uh, maybe an MVP and they're raising like large amount of money with high valuation. And sometimes we're hearing about, you know, other companies which they have some, you know, [00:24:00] motion, but they're not able to raise the same, uh- Uh-huh ... amount of money, not the same valuation. And there's like a doom and gloom in the AI, and probably I can say the same thing in, in maybe fintech, in also health tech, but AI now is the dominant theme.

So what are you seeing, you know, happening here different from what used to happen in the SaaS era, let's say, or, you know, uh, in previous like these cloud computing, um- Yeah ... you know, waves? W- but why in, in, in the AI these valuation are going to the roof, Mike? And what, how we can separate what's real from what is just like, uh, yeah, it's just another AI company.

Mike: I guess I would encourage people to, um, avoid the extremes. So again, I just have the perspective having been doing this for 40 years that I've seen Um, technology disruptions before. And I truly believe that, um, [00:25:00] you know, AI and things going on in life sciences, things going on in energy, things going on in space are truly disruptive.

But I do think, you know, people who say, "Oh, AI is gonna replace all humans," or, "This is going to lead to 50% GDP growth in 2026," I think there are AI utopian people. There's AI doom and gloomers. And those things have always existed from, you know, the, the in- the discovery of electricity, the industrialization of the automobile, the, the personal computer, the smartphone.

These things tend to, um, disrupt things, but they take time, and the [00:26:00] extremes are, are really not the way to think about it. So there's nuance. Are-- Do I think AI is an enormous disruption in technology? Absolutely. Is it gonna change every career, every company, every society? Yes. 100% I believe that. Do I think there are individual companies that are incredibly overpriced and not worth investing in?

Also true. Do I think that there is going to be backlash? Do I think there is going to be AI companies who fail miserably? Absolutely. Do I think that there is going to be unanticipated startups that change the world? Yes. Do I-- Do we know what they even all are yet? No. I mean, it was six years after the smartphone that Uber got started.[00:27:00] 

And that many... You know, it-- not everything is in the first year. You know, I'm old enough to know that, you know, there was, um, there were 20 search engine companies. Google was one of them. They won and created one of the great business franchises of all time. In hindsight, that's like, oh, why didn't I inve- You know.

You- Would you have picked Google versus the 19 other ones? It's easy to say that in hindsight. It's very hard in the moment. So I do think we're likely to see all of those things be true. I will say, um, that's why having really good, disciplined people helping you create your venture portfolio is important.

You need to have You know, discipline. Um, but again, this extreme view of it's all hype, it's a bubble, that's just easy, that's easy, sloppy language. It [00:28:00] is also to say, "Oh, all spend is good. Every startup that is doing AI is, is something worthy of investing in" is equally nonsense. So it's really, you know, um, you have to do your work.

Creating businesses is hard. It takes a long time. People that want to kind of get rich quick in any form of life, investing or with their career, no. I mean, good things are hard. Hard things take a long time. You look at Nvidia, right? Yeah. It's been a 30, 40-year journey for Jensen and his team, that they've evolved, they've struggled, they've nearly went out of business.

You take Amazon, everybody was giving Bezos grief for years about, you know, "You're never, you don't ma- This is a crappy business. You're never gonna make any money." [00:29:00] You know, it's... I, again, I would just urge people to think about this strategically. Think about it for the long term. Think about how do I get rich slow?

You know, how do I invest prudently over time? And just kind of trying to day trade or find something that's hot and jump on, get in, get out, um, again, that's dopamine, that's gambling. Um, that's not the way to do it, and that's not true invent- or capital. A venture capital is you're investing in a company that's probably gonna take five or 10 years at least to create value.

Right. And, and so, you know, again, if you wanna day trade and you think you're smarter than the rest of the world and you wanna do that, good luck. Yeah. You're not. 

Mehmet: Absolutely. 

Mike: You're not, [00:30:00] and the only people making money for those people are the ones that are getting some kind of vig on the transaction and playing off of your dopamine addiction.

So it's like if your investments require you to look at your phone every day- Yeah, that's in the gambling bucket 

Mehmet: It is. It is indeed because, you know, I think it's a human nature. Sometimes we look for shortcuts. 

Mike: Yeah. 

Mehmet: Uh, uh, but I tell people like this asset class is the one that there are no shortcuts.

It's just, you know, uh, it's a game of waiting. 

Mike: Yeah. 

Mehmet: And you, you just, you know, you set and forget, as we say sometime technically. You, you, you, you decided that these guys, this team is worth investing in them, and you just trust your gut, you trust them, and then you just wait. And think about- And you have, 

Mike: you have enough of them- 

Mehmet: Yes

Mike: that are, that are vetted and you love every one of them, but you know you need to invest in 50 [00:31:00] or 100 of these things, and you want to invest not only just in 100 of them, but that's more like 25 this year, 25 different ones next year, 25 the year after that. I mean, the, even the great investors of all time, people like Warren Buffett, um They had a power law too.

Most of Warren's wealth was created because he's lived to be so old, frankly. And he's had- Yes ... decades and decades of compounding, and things going up, and things going down, and recession, and war, and, you know, he's just lived a long time. And then, you know, he's disciplined and he's made enough good investments.

But again, I think if you, and you can ask ChatGPT, a, not every Warren Buffett investment works out. And so- No ... he has his 10 or 20% of his [00:32:00] investments that have provided the great bulk of his returns as well. So he's picked a re- a handful of really good companies, and he's ridden them for decades. So it was...

And then Elon, who, you know, he's been building things for 30 years. You know? These things, these things are hard. They take time. And again, I would just urge people that that discipline is how you become wealthy, and it's, it's not, "Oh, I, I, I need more next month, so I gotta gamble." Yeah. The venture capital then is not for you.

Mehmet: Right. It, it, it doesn't work this way. Speaking about founders and teams, Mike, like, from, you know, your experience, and I'm sure you, you've met, you know, thousands maybe, and you've listened to a lot of pitches also as well. So what, for you, what makes you [00:33:00] think that this team gonna make it, like, a founder or founders?

And maybe also something, because some founders are a little bit special, let's say like Elon, let's say, but of course may- we, we don't have them every day. But still, you know, there are these founders that have the ability to create what we call it category defining companies. Like- Yeah ... and how, how, you know, usually you spot these teams and these founders?

Mike: Well, it's a lot of practice and it's a lot of pattern recognition, but you do develop a pretty good instinct. If I were to articulate it, I would say they have an enormous amount of grit, the ability to just be unreasonably committed to their idea, because there is going to be so many naysayers, so much adversity, so many people calling you crazy.

You need to be just insanely committed to your idea. And usually it's not really [00:34:00] even motivated by money, it is just an incessant belief that the world needs this thing that I'm building. I would also say I'm a big fan of Peter Thiel's- Perspective of really looking for entrepreneurs that think the world has something fundamentally wrong.

And that they think, um, they can almost create a reality distortion field of pulling the future forward. Like, the world needs to be on Mars, and people think that's crazy, people think that... But I am going to pull that into reality. So you, you look for entrepreneurs who just see things differently. And again, I think Steve Jobs was often described as this kind of personality that would just create a world and bring people into his [00:35:00] orbit around building Apple and the personal computer and, you know, the smartphone.

And so there's vision, there's salesmanship, there's vision, and just an enormous amount of grit. And so, you know, again, entrepreneurs that are in it 'cause, "Oh, I wanna make money, and I want the outcome of being a successful entrepreneur," um, usually are not the people to invest in, um, because it's too hard.

I mean, Jensen, I think pretty famously was asked in a, in a podcast, you know, "If you went back and talked to your 25-year-old self, what would you tell yourself?" And he answered, "Do not start Nvidia." And this is obviously one of the great entrepreneurs of our generation, built one of the most valuable [00:36:00] planet, uh, companies on the planet Um, but it was so hard, and it took so long, and there was so much adversity that he just had no idea how hard it was gonna be.

So it's like you're looking for somebody who's, who, who has the ability to do that, to weather it, and it, and, and it's just there's a depth of conviction, um, that you're, that you're looking for. 

Mehmet: Right. Mike, like you, you, I think, correct me if the number is, is not right, but I think you've raised like, uh, $1.5 billion, like it's asset- Yeah

under management. Um, this is not an easy, you know, easy thing to do- Yeah ... even in the US. Uh, and I'm sure growing the company, I mean, the firm to this level wasn't ever a straight line. So if you want to reflect and, you know, like what are [00:37:00] some of, you know, the toughest, you know, inflection points that you had to take like very tough decisions, um, to go through?

Mike: Yeah. 

Mehmet: Um, anything that you can share with us? 

Mike: I mean, uh, very early it was very clear that Alumni Ventures was solving a real problem. So we, we got kind of product market fit pretty quickly and were growing nicely, and then COVID hit. 

Mehmet: Oh. 

Mike: And, you know, and so like everybody, there was a very scary three to six-month period where it was like- You know, people forget, you know, we did not know how bad the disease was gonna be.

You know, people were dying. Businesses were being shut down. Um, you know, we were all working from home for the first time at Alumni Ventures. And so, you [00:38:00] know, we, we, you know, we reduced our staff by, I, I don't know, 20% pretty quickly. We kind of cut our expenses. We battened down the hatches. We, you know, really focused on investing, um, in our portfolio companies.

Um, and then it actually turned out to be a really good time for technology and for venture capital. Um, and we had kind of a really strong recovery, kind of very V-shaped. But yeah, I mean, that was, uh, you know, that was kind of a black swan event that nobody could predict. And it's like- 

Mehmet: Absolutely ... 

Mike: this is the, and this is what you need to expect if you're gonna be an entrepreneur, which is you just never know.

And the humility of being a good venture [00:39:00] capitalist, which is, you know, we've made investments in, I think, 1,800 companies, and, you know, our active portfolio today is probably 15, 1,600. Um- You know, some of those companies will pivot, some of those companies will, that we think are gonna be home runs will not turn out.

Some of those that, you know, have really struggled will turn it around and be enormous successes. It's like, you know, yeah, I mean, we, we got news yesterday of a company that kind of we th- didn't think was gonna, you know, make it and be successful. You know, all of a sudden now we had really good news on the company and, and, you know, it, it- being a venture capitalist is very humbling.

And, um, you know, you have to approach it, that, you know, just because you made one good investment and it turned out, you're not a genius, and everything [00:40:00] you touch is gonna turn into gold. It is, it is, it is way too hard, it is way too competitive. Um, but yeah, I mean, I think our company surviving COVID, we got stronger.

And, you know, we had kind of gone through our own journey of everything working out, and then having this thing happen to us and really having to go back to first principles of like, okay, what's important? What do we need to do? Um, and what can wait? Or what is really not necessary for our customers or our portfolio companies?

So yeah, that was kind of our, that was kind of one of our stress moments for sure. There's, there's been others. 

Mehmet: Yeah. M- Mike, you talk about also the community. We touched about the connections, but you know, you, you say like the community is, is being the new currency for venture investing. Um, how that looks in practice, [00:41:00] and is it like just for, for, you know, your own investors or is it like also for, for the founders?

Like how, how does that, you know, work in, in, in, uh, uh- Yeah ... from your perspective? It- 

Mike: I'll give you two examples. So first and foremost, our network helps us get access to the very best venture deals. So, you know, we're in there pitching for allocation into a venture deal, and usually it's a f- simple conversation of how can a really powerful global network help your company?

Well, maybe they need a board member. Maybe they need introductions to this type of customer. Maybe they need help recruiting. Um, you know, we're not their business development arm. We're not their recruiting department. But we have a really good network. And so we have a dedicated team at Alumni Ventures that [00:42:00] helps our portfolio companies m- get introductions to the people they wanna talk to, and that is really valuable to them.

Um-

The second part of it is for our customers. We really try to bring our network together physically to host events. Mm-hmm. So people enjoy getting together to learn. Talked a lot about learning on this podcast, meeting our portfolio companies. We actually have dozens of investing clubs that meet via Zoom once a month to talk about one of the deals we're doing.

So, you know, we believe strongly in AI and the power of this technology, but we also believe that humans still enjoy a lot of human-to-human stuff. They like physically getting out, getting together, talking to other [00:43:00] humans, hearing a good discussion about a technology, meeting an entrepreneur. So that's part of being part of the Alumni Ventures network, is having the opportunity to do some of this in real life stuff, and to learn and to be helpful.

Because, you know, it may be, it may be one of our portfolio companies from the Middle East that wants to raise money in Silicon Valley, but then they want introductions to, you know, Japanese corporations that might be interested in their product. So, you know, we try to help. We're like a favorite aunt or uncle.

We leave you alone, but if you want help, you know, we try to reach out and make connections for you 

Mehmet: And I think this is re- really it's the power of, of connections and introductions and, uh, you know, this is how everyone, it's a win-win for everyone. Like- Yeah, so- ... for your customers- Yeah ... [00:44:00] for the founders, and even for the community because they would be learning about, you know, i- uh, you know, how to do proper, um, you know, uh, I would say, uh, follow-up on, on the technology investment.

Like how to get into someone who have skin in the game like yourself, Mike. Um, and I'm sure like this is, you know, one of the main things why I was, uh, happy to have this podcast with you is to tell people like this is where when you have someone and, you know, a team of course who have done this for a long time, so you do with them, you know, the, the investment.

So and people they don't understand. Maybe you gave some examples about the taxes and the other things, but there's a lot of, you know, nitty-gritty stuff that, that goes in, in the background that people they see just, you know, the announcement. I was like this by the way. Like I didn't know a lot of the things that goes in the background from the moment you try to source the deals until you secure your spot and then [00:45:00] actually you, you go in negotiation and the whole stuff and then until the exits.

So there's a lot of, of work that goes in the background and I think people, you know, they, they, they need to understand that you are in safe hands, you know, when, when, when you do it with a proper venture firm. About 

Mike: 330 people that get up every day to serve our clients, to source investments, to be sure that they have a good investor portal, to be sure they get their tax information on time.

Again, I just think it is very, it's practically very, very hard for 99% of the people to do this the way that it should be done. And again- Right ... if you wanna just do a deal now and then for fun, that's fine. But again, I would just encourage people to visit av.vc and, you know, attend our webinars, start learning, do your research, due diligence, start looking at the deals we're doing And just say, [00:46:00] you know, "Do I have access to these kinds of deals?"

Uh, I'd say with a great bit of humility, no, you probably do not. Okay? So- Yeah ... you know, I know, I know, that's why I started the business because even, uh, though I had spent s- time in the ecosystem, I couldn't do it alone. Yeah. And I couldn't put together a portfolio myself that would be 1/100 as good as the AV deal access today.

We have built an enormous company and machine so each one of our investors can participate in a smart way. 

Mehmet: Great. I know we, we've said about, you know, you- people have to be accredited investors, but do you accept international investors also, Mike? 

Mike: Yeah, it depend, it depends. But yes, we have about five or 10% of our customers are international.

Again, there's different rules. Some of those people have, [00:47:00] um... We have set up kind of offshore investing mechanisms. Some international customers of ours already have kind of domestic US access. So my, my advice there is just reach out to our team. We have a whole set of people that just talk to prospects and investors and, um, uh, talk to us.

It's, it's very simple. That's just, again, I know it sounds old-fashioned, but that's the just the easiest and most efficient way is just get on the phone with one of our people and see if there's a way that we can help you. 

Mehmet: No, I'm, I'm, I agree with you, b- Mike. Maybe it looks like the boring old style way, but this is every single episode.

I ask, you know, my guests to tell us where they can be reached out from, and thank you for, for mentioning. You know, I'm gonna put the website in, in the show notes. Um, we, we really came to, to the end of this episode, Mike. Any final thing you want to say before [00:48:00] I do the closing? 

Mike: No, I'm just saying I think it's a really amazing time in technology.

So there's AI, there's incredible things going on with energy, nuclear fusion, fission, renewables. I think there's really exciting, promising opportunities in healthcare and drug discovery. I know most of us have been touched personally- You know, with family members that have had cancer or Alzheimer's or diabetes or heart disease.

I think we can all be really optimistic that there's gonna be great progress in healthcare and drug discovery in the next decade. I think there's really cool things going on in space, in logistics. I just think it is such a golden age. Just do not believe the people who are extreme, that think it's a cure for everything and it's all gonna be tomorrow.

And don't [00:49:00] believe the people who are doom and gloom and Luddites and wanting to kind of stop progress. Um, both of those things are really wrong. And so, you know, just take it slow, enjoy life, learn, grow, invest, get rich slow. 

Mehmet: Get rich slow. I like this approach, Mark. And e- to your point, yeah, it's not like the end of the world tomorrow, and of course, it's not like the brightest future also tomorrow.

So it's c- I, I call it it's business as usual, but we have, as you said, this golden opportunity. Uh, Mark, I really thank you a lot for the time. It's early morning for you when we were recording this, so I appreciate this. The link to the website will be in the show notes, you know, if you're listening on any of your favorite podcasting apps.

If you're watching this on YouTube, you'll find in the show notes. And this, I'm ending this time, this episode. So for the first time since four years, I'm [00:50:00] taking a break for, uh, this summer. So we're gonna air this in August. Of course, it's gonna be out in August. So coming back hopefully in September.

Still we do, we gotta decide the dates, but we're gonna come maybe probably with a, a better format and, you know, we're gonna change a few things as I received a lot of feedbacks from you, my listeners, and people who follow us. So thank you very much. And as I say always, thank you for the support. Uh, stay tuning for the next season.

Uh, I will announce it on my socials. So thank you very much and hope to see you again very soon. Thank you. Bye bye.