The Blockchain Fund

Ventures innovating through blockchain tech

Open through October 31, 2021

The Fund's Investment Thesis

The potential of blockchain goes far beyond Bitcoin and other cryptocurrencies. Our Blockchain Fund is focused on the universe of opportunities opened up by blockchain technology. It’s a chance to invest in a diversified portfolio of ~20-30 venture investments that use blockchain technology to change how business is conducted. As we continue to evolve to a mobile and digital-first society, we believe blockchain will become critical for the coordination of resources and activities providing ways to record, store, share information about, and exchange assets.

In its simplest explanation, a blockchain is a type of database or distributed ledger where transactions can be recorded, memorialized, and protected in the cloud. It is like a giant world computer.

  • Blockchains are decentralized because they are stored over many computers in a network as opposed to a single master computer or one company, bank, or organization.
  • This communal nature of blockchain means that a copy of the same ledger is distributed to multiple people or computers (also called nodes), making it immutable.
  • The technology can be applied to a variety of sectors: finance, insurance, pharma, hospitality, gaming, communications, identity, supply chain logistics, healthcare, education, travel, research, clean tech, waste management, law enforcement, and more.
 

Alumni Ventures is in an excellent position to identify, access, and create a portfolio of such investments. Powered by a global network, Alumni Ventures is one of the most active venture firms in the U.S., routinely co-investing with other established VCs with experience in a wide variety of sectors, stages, and regions. In addition, we can invest in follow-on rounds of some of the ~600 companies in our existing portfolio—in ventures that fit the focus of this fund. Finally, we have experience sourcing, evaluating, and completing blockchain investments.

 

Why This Is a Compelling Sector

Many of our current economic, legal, and political systems—transactions, records, and contracts—aren’t well adapted for the modern digital world. Blockchain is a powerful foundational technology, providing immediate, shared, and transparent information that is accessed only by permissioned network members. These unique characteristics—and others—provide a framework for the transformation of multiple industries.

  • Multiple advantages of blockchain. Blockchain provides enhanced security by creating an immutable record that prevents fraud, protects privacy, and anonymizes data. It also allows greater transparency by giving all participants across the network the same information and documenting the journey of an asset. Finally, it increases efficiency through automations, smart contracts, and decentralized distribution of control across users.
  • Broad applications. While blockchain has been most well-known for the cryptocurrency revolution, as noted above, it can be applied to many sectors. For example, governments are experimenting with using blockchains to store property records and votes, banks are using it to make services more efficient, and companies are building blockchains to track supply chain.
  • Global market. The global blockchain market, which is divided into blockchain platforms and Blockchain-as-a-Service (Baas), is projected to reach $69B in 2027. This growth is expected to be largely be driven by the application of blockchain in the fintech, retail, and ICT (Information and Communications Technology) sectors.
  • Investment potential. Venture investing in blockchain is seeing a maturation of initial investments made in companies like Ripple and Coinbase over a decade ago. These successes have resulted in a sharp increase of venture interest in blockchain over the last three to four years, with increase in the number and size of the deals made in this sector.

Special Benefit: The Blockchain Fund Venture Club & Syndications

Every investor in the AVG Blockchain Fund will automatically become a member of our Blockchain Venture Club. The Club offers the following benefits:

  • Optional Syndication venture investment opportunities. Increase your commitment in an investment in your Blockchain Fund that you particularly like. Syndication investment minimums are just $10K minimum per deal
  • Ability to score deals and share your opinions with Club members if you wish
  • Educational opportunities, invitations to virtual events, and the ability to personally support portfolio companies
  • Updates on your fund and portfolio
SAMPLE SYNDICATION

Fintech company providing diversified financial services for cryptoassets. BlockFi sets itself apart from other cryptoasset service providers by pairing market-leading rates with institutional-quality benefits. The company is the only independent lender with institutional backing from investors that include Valar Ventures, Galaxy Digital, Fidelity, Akuna Capital, SoFi and Coinbase Ventures.

Co-investors: Morgan Creek, Valar Ventures

SAMPLE SYNDICATION

Developer of videogame engine designed for player-owned economies, using blockchain tech to build games where players can own the assets they develop or acquire in the game. Mythical Games believes that true ownership of digital assets, verifiable scarcity, and integrated secondary markets will spawn a new generation of games.

Co-investors: Griffin Gaming Partners & LPs, Galaxy Digital, Javelin Venture Partners

OPENS AUGUST 2021

This fund will invest in ventures that are focusing on solutions using blockchain technology in innovative ways, as well as potentially some other cryptoassets. Investments will be diversified by blockchain sector, stage, geography, and lead investor.

Here’s how we’ll assemble the portfolio:

  • Our full-time, dedicated team will source, vet, and fund deals.
  • Investments will be reviewed and approved by our fund investment committee and Alumni Ventures investment committee.
  • Our fund will look to invest in ~80%+ venture deals and up to 20% in tokens and/or other cryptoassets.
  • We’ll look to diversify the fund over the term of investment, reserving 20% for follow-on investments.

I'm interested in the Blockchain Fund


How It Works

Data-driven and process-based investors

AVG Deal Sourcing and Diligence

  • ~50 investment professionals sourcing deals, working from five venture hubs and tapping alumni connections
  • Data-rich and process-driven diligence and decision making with rigorous deal scoring
  • Co-investing with other established lead venture investors who are experienced in the sector and can help validate the business model

Portfolio Construction

  • Every deal sourced by our two-person investment team is screened for fit with our standard criteria.
  • The portfolio is constructed over ~12-18 months, with an eye to diversification across stage, sector, geography, and lead investor.
  • We keep reserves of 20% for follow-on investing.

Smart, Simple Venture Investing

Open to All Accredited Investors

Smart

  • Portfolio consists of ~20-30 companies within the investment mandate, diversified by stage, sector, geography, and lead investor, as well as some cryptoassets
  • Co-invest alongside other established lead venture investors with sector expertise
  • Venture portfolio professionally managed by our experienced investment professionals

Simple

  • $25K minimum investment; $3M maximum investment
  • Online signing process typically takes just minutes
  • White-glove support from our Investor Relations team

To see additional risk factors and investment considerations, visit avg-funds.com/Disclosures

Blockchain Fund Example Deals

Here are portfolio companies in the Alumni Ventures portfolio that help illustrate the types of ventures we might invest in.*

*For sample purposes only.

Our Secret Sauce

Our 550k+ subscribers and community members

550k

COMMUNITY

550k subscribers and community members help source deals, evaluate, and assist portfolio companies

#1

THE MOST ACTIVE VC FIRM IN THE US

Alumni Ventures was recognized by Pitchbook as the most active VC firm in the U.S. in 2020.

~600

PORTFOLIO COMPANIES

Invest in deals most individuals never know about or get access to.