Unicorn Hunting

The Art and Science of Spotting the Game-Changing Startups

Michael Collins is Founder, CEO, and Board Chair of Alumni Ventures, America’s largest venture capital firm for individual accredited investors. Mike founded AV in 2014 and served as Managing Partner of the firm’s first alumni fund, Green D Ventures (for the Dartmouth community). Green D is now one of 40+ AV foundational and focused funds. Under Mike’s leadership, AV has raised $1.3+ billion from 10,000+ investors and backed 1,400+ portfolio companies. Mike holds an undergraduate degree in Engineering Science from Dartmouth and an MBA from Harvard Business School.

In the world of venture capital, one of the most sought-after challenges is finding that rare unicorn — the startup that defies odds, disrupts industries, and delivers massive returns. But contrary to popular belief, identifying unicorns isn’t about waiting for the obvious. It’s about spotting the signal in the noise, often long before others do.

In the early stages — when product-market fit is just a hope and metrics are sparse — what do seasoned investors really look for? How do they separate potential breakthrough companies from the rest?

As Mike Collins, Founder and CEO of Alumni Ventures, puts it:

“What we’re really hunting for is the next team, idea, or founder with the potential to reshape an entire industry — years before the market sees it.”

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Challenging Problems: The Source of Real Value

The startups that become unicorns don’t shy away from complexity. On the contrary, they take on the most challenging problems others avoid because they require deep expertise and long-term commitment. “In an age where quick wins are glorified, we value founders willing to wrestle with tough, technical challenges,” Mike says. “If it’s easy, it won’t be sustainable.”

Many of today’s unicorns emerged from technical innovation and domain expertise that created moats — strategic advantages that competitors struggle to cross. Whether it’s network effects, proprietary technology, or first-mover advantage, these differentiators often aren’t obvious in the early days. “Even Amazon started small, focusing on books, before expanding into the global retail giant it is today,” Mike notes.

Timing and Patience: The Fine Line Between Early and Too Early

Timing is everything in venture capital. Sometimes, the right idea comes before the market or infrastructure is ready to support it. For example, think of Apple’s Newton in the 1990s. Other times, founders who are slightly ahead of the curve need the patience and capital to wait for the market to catch up.

Mike explains, “When innovation builds on prior infrastructure, ideas often come to market simultaneously. We’re seeing that now in sectors like space and clean energy, where earlier investments have laid the foundation for future breakthroughs.”

The challenge for investors is determining whether the startup’s timing aligns with market readiness and being prepared to stick with the investment over the long haul. Successful venture capital often requires patience and capital reserves to chase winners as they mature.

The Power of Process Over Outcome

Mike emphasizes the importance of focusing on the process, not the outcome. “In venture investing, you’ll be wrong more often than right. Some startups will fail, even with the right team and idea. But the winners — the unicorns — will make up for the losses.”*

He likens it to being a defensive player in sports: you can’t win every time, and losses are part of the game. “The key is staying disciplined, working with the right people, and maintaining a long-term view. Success in venture capital isn’t about quick wins but consistent, thoughtful bets over time.”

Alumni Ventures offers accredited individuals access to professional-grade venture capital, a key asset class missing from the portfolios of many sophisticated investors. Since 2014, AV has raised $1.3+ billion from 10,000+ investors and backed 1,400+ unique portfolio companies. AV is a top 20 venture firm in North America according to CB Insights, as well as the #1 most active venture firm in the U.S., and #3 most active in the world, according to PitchBook’s 2022 and 2023 rankings. AV has won awards from Inc. Magazine, Fast Company, Benzinga, and the US FinTech Awards.

*Venture capital investing involves substantial risk, including risk of loss of all capital invested. Achievement of investment objectives, including any pattern of successful investment, cannot be guaranteed.

This communication is from Alumni Ventures, a for-profit venture capital company that is not affiliated with or endorsed by any school. It is not personalized advice, and AV only provides advice to its client funds. This communication is neither an offer to sell, nor a solicitation of an offer to purchase, any security. Such offers are made only pursuant to the formal offering documents for the fund(s) concerned, and describe significant risks and other material information that should be carefully considered before investing. For additional information, please see here.

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