Frequently Asked Questions
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How does it work?
Our investment team is in-market reviewing hundreds of opportunities per year and we utilize our expertise, the power of your alumni network, and technology to filter through the noise. Our investment team of PhDs, MDs, and MBAs focus on identifying promising small to medium-sized opportunities with significant growth potential.
As opportunities are identified, they are posted to the platform where select members have the opportunity to invest. There are no membership fees, no hassles, and no pressure to invest.
If an eligible member would like to invest, they may do so at the click of a button from the convenience of their desktop or smartphone.
How does Alumshares choose which opportunities make it onto the platform?
We focus on opportunities where intelligent and determined teams are making things people want around defensible business models. We are particularly interested in teams with the potential to positively shape the world around us.
Although we apply a rigorous selection process before posting opportunities to the platform, this process is not intended to serve as a replacement for individual due diligence. Neither Alumshares nor its affiliates or agents endorse or recommend any investment opportunity. It is the sole responsibility of every investor to carefully consider investment opportunities and to perform their own due diligence of the relevant investment opportunity. In short: We provide content and context, you make your own investment decisions.
How often will new investment opportunities be introduced?
Great investments tend to be rare and valuable things. So we don’t force action when it doesn’t exist, and the frequency of investment offerings is dictated by available opportunities. There will be times when opportunities appear abundant, and other times where you don’t hear from us periodically. Don’t be alarmed if you don’t hear from us for a while; this is normal.
What is the minimum investment?
Alumshares has some of the lowest investment minimums and fees in the industry; our standardized terms and in-house team of accountants and attorneys handle all back-office functions, ensuring that the average minimum check size for any Alumshares investment will typically be $5,000-$10,000 for accredited investors.
However, investment minimums are set on a deal-by-deal basis. To allow more broad participation, Alumshares is focused on ensuring that each investment opportunity has as small of an investment minimum as possible.
What are the costs of investing?
We charge a 1% annual servicing fee to cover distribution costs, regulatory expenses, tax filings, and other ongoing administrative expenses. We may also be reimbursed for certain entity formation costs. Additionally, where we lead the syndicate and provide more than just administrative support, we also charge between 10% to 20% of the profit through carried interest if the investment increases in value.
Carried Interest: A carried interest is a share of the profit from any investment opportunity that is paid to the manager of the special purpose vehicle. This sharing only exists in situations where we are providing more than just administrative support and only to the extent profits are realized. The purpose of carried interest is to align interests and serve as a key incentive to realize the best exit possible of the investment. A carried interest will be determined on a deal-by-deal.
Servicing Fee: A servicing fee is a monthly or quarterly fee added onto an investment opportunity, meant to reimburse the manager of the special purpose fund for all ongoing administrative expenses incurred. A servicing fee will be determined on a deal-by-deal basis.
For each investment opportunity transacted, the estimated lifetime total servicing fee is collected upfront and drawn down by the manager of the special purpose fund over time. If there is an exit before the entire servicing fee is drawn, undrawn capital is returned to the syndicated investors.
How are Alumshares investments structured?
Alumshares offers syndicated investment opportunities on a deal-by-deal basis to accredited investors through its investment platform. A syndicate allows investors to invest together in investment opportunities on a deal-by-deal basis. Syndicated investments opportunities are typically structured as limited liability companies. Each syndicated investment opportunity is treated as a private placement (i.e., not publicly traded) and exempt from registration under Section 506 of Regulation D of the Federal Securities Regulations.
Syndicated investors do not invest directly in an investment opportunity. Instead, they invest in to a special purpose vehicle (SPV), which acts as a holding company that is created specifically to invest in a specific investment opportunity. The special purpose vehicle is typically structured as a limited liability company (LLC).
The manager for each special purpose fund will be an affiliate of Alumshares. The manager will be responsible for day-to-day management of the special purpose vehicle. In exchange, the manager will receive a servicing fee, reimbursement of formation costs, and/or carried interest.
What are the risks of investing in these offerings?
Investing in early stage companies is inherently highly speculative and involves significant risk. You should invest only if you are comfortable with risk and willing to potentially lose your entire investment without complaint.
What are the tax consequences of investing?
For each syndicate deal, investors become members of a special purpose vehicle (SPV) (i.e., a limited liability company), which is a holding company formed specifically to make the investment at hand. That SPV will purchase instruments issued by the company. Certain taxable events may result in income or losses flowing through the special purpose fund to its investors. Investors with taxable income or loss will receive a Schedule K-1.
How do I monetize my investment?
Our investments are meant to be long-term, illiquid investments. Your returns will be based on the change in value of the investment over time and realized upon a successful liquidation event.
Our goal is to provide liquidity in the future to our investors, including a means by which they can sell their shares to other investors, however we cannot assure you when or if such liquidity option will be available. Accordingly, you should be prepared to hold the investment indefinitely until such time as a liquidation event (if any) is reached.
Even if and when you are able to monetize your investment, there is no assurance that you will receive more than you paid for it.
Who can see an investment opportunity?
An investment opportunity is typically only visible to investors with the same university affiliation as the investment opportunity. Additionally, depending on the reliance of certain securities exemptions, investment access may be further limited to accredited investors and/or account holders residing in the United States only.
Who can invest in a syndicated investment opportunity?
Any accredited investor can apply to invest in a syndicated investment opportunity. Such accredited investors must be located or residing in the United States. Investors can choose whether they invest into a specific deal on a deal-by-deal basis.
What is an accredited investor?
A person in the U.S. is accredited if he or she meets either of these two criteria:
- $200,000 in annual income for each of the past two years (or $300,000 with a spouse), with the expectation of similar earnings this year; or
- $1 million in net assets, excluding the primary residence.
Accredited investors must meet standards defined by the U.S. Securities and Exchange Commission, which allow them to invest in certain private securities offerings.
Can an accredited investor invest if they do not live in the United States?
No, only accredited investors located or residing in the United States may invest in a syndicated investment opportunity.
Can I invest via an entity?
Yes, we do permit investments through domestic entities including most trusts, LLCs, partnerships, and corporations.
Can an investor add a spouse to his or her investment?
Yes, we typically allow joint investments provided you have created a joint investment account.
Can I invest via my self-directed IRA?
Unfortunately, we do not currently support investments from self-directed IRAs although this may be subject to change in the future.
How do I change my password?
To change your password, go to the “Settings” menu in the Alumshares platform (alumshares.com/settings). Choose password from the left-hand menu to create a new password.
What if I forgot my password?
If you forgot your password, go to alumshares.com/login and click “Forgot Password.” Enter your email address and we'll send you a link to reset your password.
How do I delete my account?
To delete your account and close your user profile, please email us at firstname.lastname@example.org. Please note, deleting your account does not delete any information associated with an investment opportunity in which you invested.
Have more questions?
Whether you have a question about our services, need assistance or just want to talk, we want to hear from you. Contact us at email@example.com