Plum Alley Investments Membership FAQ

Plum Alley Investments is a venture platform investing in disruptive innovation at the intersection of emerging technologies and frontier healthcare with a strong reputation for investing in category outperformers with gender diverse founding teams. Plum Alley invests in early stage companies creating generational impact with a thesis-driven approach in areas focusing on positive transformation in the environment, industry and human lives enabling prosperity and economic strength. Plum Alley’s primary stage focus is Series A with select opportunities in late seed to Series B, in addition to later stage follow-on opportunities

How can I invest with Plum Alley?

As a venture platform, Plum Alley currently offers two options for individuals, family offices and institutions who want to invest. The two options include i) Membership and Syndicate SPV Investments in individual companies and ii) the Plum Alley Venture Fund. We are likely to offer additional ways to invest going forward.

What can I expect on venture returns?

Investing in private companies is risky and there are no assurances that a particular company will produce a positive return. Plum Alley Investments seeks high potential companies with strong products and services and leadership teams; however, there is no guarantee of a financial return. When investing at a Series A stage, investors should anticipate a 5 to 10 year time horizon for each individual investment to mature and offer a liquidity event. We typically invest when companies are beyond the seed stage so these companies may have a shorter time to maturity or exit. We caution investors that there are no guarantees for a return so each investor should consult their advisors when making a decision to invest.

For an SPV investment, a financial return occurs when a company goes public, sells to another company, a tender offer, dividend or liquidation. If a company ceases operation you may have a loss for tax purposes that can potentially offset other investment gains. You are advised to consult your tax advisor. We recommend all investors consider a portfolio approach when allocating capital and build a portfolio of companies to diversify risk. Just as with public market securities, we recommend that investors diversify their portfolio with different companies.

For the Venture Fund, returns are distributed according to standard venture fund parameters. All details are set forth in the fund materials which can be shared upon request.

What is an accredited investor?

The Securities and Exchange Commission (the “SEC”) set the guidelines for what it means to be an accredited versus non-accredited investor. The SEC defines an accredited investor, in the context of a natural person, as anyone who has an earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, or has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence). The SEC sets these criteria to set parameters to protect investors.

Can I invest using IRA funds or DAF monies?

Yes. Plum Alley has created a DAF at Impact Assets into which members and LPs can invest using an existing DAF or create a new DAF. The Venture Fund has already been approved by Impact Assets, making it an efficient way to invest DAF dollars. Investors may also invest using IRA funds held by an alternative custodian. We have an existing relationship with Pacific Premiere which offers its customers the option to invest in alternative assets. Please contact us if you are interested in exploring either of these options.

How can I refer deals, investors or reach out as a founder?

Please reach out to us at info@plumalley.co or alicia@plumalley.co if you have information to share on companies or investors that fit our criteria.

What are the membership levels?

Information regarding membership levels and links to join are here.

What is a syndicate SPV?

Plum Alley members making investments into private companies do so via a Plum Alley syndicate, which is a Special Purpose Vehicle or a Limited Liability Company (LLC) (“Syndicate Company”) that the Plum Alley Management Company creates and manages. Each member investor purchases an ownership interest in the Syndicate Company, rather than directly buying the securities of the underlying private company (“Target Company”). The syndicate investment vehicle allows Plum Alley to pool capital among members and provide access to deals otherwise not open to individual investors. The Plum Alley Syndicate Company is the investor on the Target Company capitalization table. Plum Alley members own a pro rata stake in the Syndicate Company and share administrative and investment expenses on a pro rata basis. The Plum Alley Management Company serves as the Syndicate Manager for all syndicates.

What are syndicate expenses?

As a member, you have full discretion to pick and choose your investments. Member investors are able to leverage Plum Alley’s sourcing, analysis and expertise, but have final authority to make their own investment decisions. When member investors elect to participate in a Plum Alley SPV, there are syndicate expenses reserved upfront for each SPV. The syndicate expense amount covers the cost of deal sourcing, diligence and monitoring of syndicate company investments over the life of the SPV. It also covers out-of-pocket administrative expenses such as entity formation, legal counsel review of target company financing documents, syndicate bookkeeping and records, Carta Administrative services, K1s, tax returns and SPV dissolution.

The syndicate expense includes two components reserved upfront: a $60,000 flat fee for the out-of-pocket expenses and a Syndicate Manager Fee of 1.75% per annum for 5 years. Syndicate expenses are shared pro rata by SPV member investors.

SPV expenses shared above are effective as of August 2022.

How does Plum Alley oversee its SPV investment opportunities?

Each time Plum Alley Investments provides access to an opportunity to invest in a private company, we form a new legal entity to hold the securities of that private company. Each investor purchases an ownership interest in that syndicate company SPV, rather than holding the shares of the private company. This allows investors the benefit of pooling their dollars and simplifies the process with one name on the company’s cap table. Each new syndicate is a Delaware limited liability company (an "LLC"). Each LLC is managed by Plum Alley Management Company. The investors are the “Prospective Investor Members” of the LLC. The relationship between the Syndicate Manager and the investor members is defined by the LLC's “Operating Agreement.”

What reporting should I expect?

Plum Alley Investments will provide all investor members of its syndicates with K1 filings via Carta, an outside and independent reporting firm. We also share periodic material information and announcements of each investment opportunity via Carta.

Is there a minimum investment amount?

The minimum investment amount for participation in a syndicate SPV is typically $10,000, however. the average investment size ranges from $50,000 to upwards of $250,000.

What is the size of Plum Alley’s Venture Fund?

Plum Alley’s Venture Fund has a core investment thesis focused on advanced technologies and medical breakthroughs that are future-proofing health, climate, sustainable industry, and equitable economies. The target Fund size is $50M with a target final close by the end of 2022 with an estimated deployment period of 2021 - 2023.

What’s the Fund’s target portfolio construction?

Plum Alley's Venture Fund invests in advanced technologies and medical breakthroughs. Thematic focus areas include next generation infrastructure and industry, environment, frontier health, and equitable economies. The fund is targeting 60-70% investments in technology and 30-40% in healthcare with 100% of portfolio companies having gender diversity in the founding team.

What’s the minimum investment for the Fund?

Plum Alley’s standard minimum investment for the Venture Fund is $1M for entities and $500k for individuals. Plum Alley offers existing and former Plum Alley members the opportunity to invest in the Venture Fund at a lower minimum. This is a special benefit for those that have been early supporters and backers of Plum Alley and our mission to invest in gender diverse, disruptive innovators. We are also committed to opening access for a broader base of accredited investors while also maintaining sustainable and scalable operations.

What are the Fund fees and expenses?

Plum Alley GPs charges 20% investment carry on all syndicate investments which is in line with the Plum Alley Venture Fund and the overall venture industry. Carry is only charged at the time the private company has a liquidity event and only charged on capital on top of the initial investment amount (i.e. any returns above the original investment are shared 80% to the investor and 20% to Plum Alley).

There is a management fee, which averages 2% over the life of the fund with 2.5% during the investment period, and then ratcheted down by 0.25% per year after year 4.

What is the Fund reporting and how do I track my investment?

Plum Alley will issue standard quarterly reports to LPs in the Plum Alley Venture Fund in partnership with the Fund Administrator Carta.