Following the success of its first venture fund for Dartmouth College alumni, Boston firm Launch Angels is creating more opportunities for alumni at New England colleges to raise venture capital. And it doesn’t plan to stop there, with an eye on expanding funds to up to 20 colleges and universities in the next 10 years.
Launch Angels said Thursday it’s launching new venture funds for Yale College and University of New Hampshire alumni, and that it’s also creating a second Green D Angels fund for Dartmouth alumni due to high interest. The limited partners in every fund are alumni from their respective schools. The first Green D Angels fund, launched earlier this year, closed with $1.5 million raised from 44 alumni, and over 50 percent of that so far has been invested into 10 early-stage companies with Dartmouth connections, including Cambridge biotech firm Compass Therapeutics and Claremont, N.H., health firm Recover Together.
Michael Collins, lead manager for the Green D Angels, told BostInno that these kinds of alumni-backed venture funds — which are private, for-profit and not affiliated or endorsed by the schools — should serve as a future model in how alumni can support each other.
“I want a national network of alumni funds. I think it’s an important part of the fabric of actually what it means to go to school today: entrepreneurial thinking,” he said. “Not everyone can be Sergey Brin or Mark Zuckerberg, but we move society forward with innovators. A lot of colleges are trying to catch up with that and part of the equation is alumni who want to invest in the next generation of entrepreneurs.”
Due to high interest from Dartmouth alumni, the second Green D Angels fund for college alumni is going to be larger than the first, Collins said. Whereas the first fund only targeted up to 50 investors and averaged about $100,000 per investment, the second will target 150 and average about $200,000 to $400,000 per investment. (The Green D Angels fund was previously referred to as the Green D Founders Fund.)
The funds for UNH and Yale alumni will be called Blue Cat Angels and Blue Ivy Ventures, respectively, and Collins said they will be closer to the first Green D Angels fund in size, targeting around 50 investors each. The Blue Cat Angel Fund will be led by Tom "TK" Kuegler and Mark Kaplan while Blue Ivy Ventures will be led by Orlando Mendoza.
The second Green D Angels fund and the Blue Cat Angels fund have been in active fundraising mode and are expected to close within the next three to six months. Blue Ivy Ventures, on the other hand, is just starting to fundraise, with an anticipated Q1 2016 close. Each fund is expected to invest in about 15 to 20 companies within the next two to three years.
"People have seen alumni funds work at Dartmouth and Stanford and are saying, 'It's our turn.'"
“We have already gained tremendous interest in the fund," Mendoza said in a statement. "People have seen alumni funds work at Dartmouth and Stanford and are saying, 'It's our turn.'"
Collins, who is also on Launch Angels’ board of directors, said the firm has plans to add funds for three to four colleges and universities every year for the foreseeable future, with an expectation to have funds established at 15 to 20 schools within the next 10 years.
So what’s next on Launch Angels’ list? The firm said its currently targeting Harvard, Princeton and MIT, but added that funds won’t be set up until it can find the right lead manager, which helps explain why we never heard anything else about the firm’s Maroon & Gold Fund for Boston College alumni that was announced last year.
Collins said after the BC fund was announced, Launch Angels didn’t have a lead manager in place for the fund, leading it to postpone the whole thing. He said the firm would like to eventually launch the BC fund after the initial misfire, but it needs to find a lead manager first, which can take three to six months for the search process.
Images provided.
