In our last post, we explored the concept of alumni syndicates and how the trend is on the rise in Europe. These syndicates are based on the mafias emerging from successful companies where former employees embark on their own journey, leveraging the lessons learned, networks built, and knowledge acquired during their tenure. The PayPal mafia is the most notable example, with many world-famous companies and leaders spinning out. We’re confident this behavior will emerge in investing as access gets democratized.
Alumni syndicates include, but are not limited to, ex-startuppers. While former founders and startup operators are great candidates for angel and early-stage investing, there are plenty of other alumni networks that can provide meaningful collaboration and capital allocation. The most obvious, and likely the most relevant, are university alumni networks.
They say that some of your strongest personal bonds form at university. According to a paper titled Alumni Networks in Venture Capital Financing, those personal bonds lead to professional benefits. Based on 19 years of PitchBook data, the researchers found that in ⅓ of VC investments, founder and investor share the same university. It’s not surprising that individuals sharing an alma mater end up doing business together. But it does reinforce the fact that alumni share a special connection that fosters trust, familiarity, and cooperation.
Most business schools offer investment clubs, allowing aspiring investors to explore market dynamics. These training grounds provide the chance to build investing habits alongside peers. Many top-tier universities extend this community-oriented investing scheme beyond graduation. To highlight alumni’s startups and provide value to their alumni community, many institutions create co-investment platforms. For instance, INSEAD has a co-investment platform to invest in startups around the world alongside professional investors. In the United States, Columbia University operates a non-profit group called Columbia Angel Network bringing together alumni angel investors and high-potential university-affiliated projects.
Historically, these universities had to be the middlemen due to the sheer infrastructure required. Nowadays, university alumni networks will remain strong, but alternative investment vehicles and platforms (ahem, Roundtable!) will allow for new and creative ways for these groups to pool and deploy capital!
The world’s biggest companies maintain some of the most powerful alumni networks. Sure, these Fortune 500 giants behave differently than your typical tech startup. But they offer perks and access to their alumni for good reasons: future partnerships, opportunities to lock in vendor contracts, maintain good public relations, or attract former employees to come back into the fold with their newly-acquired knowledge from “the outside.” It’s increasingly popular to develop online tools to engage these networks.
Companies like McKinsey & Co. (and other consulting firms), Procter & Gamble (among other massive, multinational consumer goods companies), Nestlé (food) and CitiBank (banking) have famously active communities of ex-employees.
In “Big Tech” this holds true as well. Brands like LinkedIn and Google have also curated strong networks of former employees. Some will host events, others will provide continued access to company resources, and others still may provide opportunities to co-invest. Without access to these private spaces, it’s hard to tell exactly how they operate. But one thing is clear: the appetite for connection and collaboration under a shared identity (having worked at company X) provides the opportunity to make magic. In the future, these alumni connections will pool together the expertise and relevant experience to bring a new angle to the angel category.
Last but certainly not least, it’s hard not to mention startup alumni, despite covering them in our last post.
From the PayPal mafia to the AirAngels (ex-AirBnB alumni syndicate), this cohort is closest to the “front lines” of company building and fundraising.
As startups scale and mature in Europe, notable exits and ambitious operators will lead to some of the most innovative and organized early-stage investing groups.
In the US, former Google employees manage a syndicate, as do Uber, Lyft, Square, and Pinterest alumni. Good entrepreneurs can make good investors and 2 heads (or 3 or 20) are better than one!
It’s only a matter of time before it’s common in the European market for ex-Alan employees to fund the next generational health-tech startups and former Qonto operators to drive innovation in Fintech.
Success breeds success and successful employees create opportunities for new ideas, funding strategies, and collective growth.
If you’re an alumni syndicate leader, we want to hear from you! Let’s talk about how you can partner with us to invest in the best up-and-coming startups in your sector!
Roundtable EuVECA Manager Lux S.à.r.l. is registered with the Commission de Surveillance du Secteur Financier (CSSF) under number A3650 as manager of collective investment undertakings that wish to use the designation‘EuVECA’ as per article 14 of EU Regulation n° 345/2013 of the EU Parliament and of the Council of 17 April 2023 on European venture capital funds.
Roundtable EuVECA Manager Lux S.à.r.l. is also registered as manager of alternative investment funds under article 3 (3) of the Act of 12 July 2013 on alternative investment funds managers.