Eric Satz is the co-founder, president and CEO of Alto, developer of an alternative asset investment platform intended to connect everyday investors to alternative investment opportunities. Satz and his team raised $39.94 million of Series B venture funding in 2022, putting the company's pre-money valuation at $250 million. Previously, Alto raised $17 million through a combination of Series A-1 and Series A-2 venture funding.
As a former venture capitalist and serial entrepreneur, Satz has founded or co-founded nearly a dozen companies. He jokes that he’s a recovering investment banker, so raising capital is nothing new to him.
He says his new company is democratizing access to alternative assets. The mission is to enable individual investors to access their retirement savings in a cost-effective way, and to make investments in alternate assets — private equity or venture capital opportunities, real estate, artwork, farmland, securitized collectibles and crypto.
They started the company in 2016, and it’s been nothing but success since.
“We've got north of a billion dollars in assets under administration,” Satz says. “We have more than 26,000 customers; I sort of feel like we crested the tipping point, if you will.”
Satz considers Alto’s ability to raise such significant amounts of capital as twofold.
“One, is it's really good to be lucky and I think the role that luck plays in any entrepreneur’s journey or any startup founder’s journey is probably too often underestimated,” Satz says.
The other part is positioning yourself for success.
“You have to be on the field to make plays," he says. "Part of being on the field and part of making plays is understanding where the defense is. If you're on offense, understanding where the defense is and directing your business to play through the gaps and into the holes so that you can make big strides. We've been fortunate in that we've chosen well, and our business has been growing incredibly. We grew 15x from 2020 to 2021, and when you grow 15x, you're fortunate enough to attract some investor capital.”
Another rule to follow for Satz is to trust those you’re doing business with.
“Make sure that you're getting into business with people you like and respect because the fact of the matter is that we all hit bumps in the road — we all kind of run into walls — and sometimes you got to find a way around and you want to know that you have people in your corner who you can trust and absolutely be transparent and honest with," he says. "And if you don't feel like you can, then that's probably not someone you should take money from.”
Having a good nose for when something is off can be helpful. He pointed to an example of when he was the one investing and he missed all the signs that should have told him to get out.
“There were red flags to getting the transaction done,” Satz says. “I was early in my investing career and I made the mistake of believing I had all these sunk costs — legal fees and all this other stuff. Maybe it was just the intensity of the negotiation or whatever it was. Really those all should have been signals for me to stop right then and not get into business with that particular entrepreneur.”
How did it turn out?
“It was a complete disaster,” Satz says. “A complete disaster; everybody lost their money.”
That will not be the case with Alto, he reassures.
“The investor base at Alto is absolutely stellar,” he says. “There’s not a single investor that I don’t like and don’t respect.”
Satz spoke on the Smart Business Dealmakers Podcast about Alto’s approach to investing and raising capital.
