Our
Mission | Investing in the "Innovation Economy"
Investment
Strategy | Enhanced Returns at Exit
Our Mission
Echelon Ventures’ mission is to maximize shareholder returns by funding companies, guided by competent management, whose potential breakthrough technology can create multiples of value on relatively small amounts of invested capital. It is Echelon Ventures’ view that the technological breakthrough to drive such value creation is more likely to occur through the innovative combinations of technologies or disciplines than within a single technology sector. We believe that Echelon Ventures is the first venture firm designed specifically to identify, evaluate, and manage investments in companies of this nature.
Investing in the “Innovation Economy”
Many observers feel that the pace of technological innovation has picked up so dramatically in recent years that we now live in the “Innovation Economy”. Innovation ought to fuel venture capital investment and return. Nevertheless, some observers of the venture capital industry have expressed concerns that returns may be suppressed because of an “over-grazing” effect brought about by the concentration of capital in traditional investment sectors and a preponderance of investment along traditional technology lines without regard for the winds of change. From the invention of the telephone to “genes-on-a-chip”, major technological breakthroughs with measurable market impact have developed at the intersection of disciplines. Just as university research has long sought technological breakthrough at the intersection of disciplines, increasingly innovation in the economy stems from the intertwining of technologies. Rather than shrinking, we expect the Innovation Economy to provide significant growth in opportunities to invest in breakthrough technology for those who know where to seek, and how to manage these opportunities.
Our strategy rests on our ability to capture the innovation that cuts across technologies or disciplines. Rather than having specialists in the firm’s one or two areas of expertise, Echelon Ventures brings the expertise, experience, and extensive networks of a multi-disciplinary team to find, analyze, evaluate, and manage opportunities that promise true technological leaps and enduring value propositions. The core team (see Team section) has technological expertise in information technology, communications networks, life sciences, materials, semiconductor electronics, and the disciplines surrounding nanotechnology, as well as extensive large corporation and entrepreneurial management experience. We seek relatively young companies – but not start-ups – led by capable management, with technology that has demonstrated a relevant proof of concept, has defensible intellectual property protection, and a compelling value proposition for a large current or potential market. These companies need not fit easily within a sector of expertise as at many traditional venture firms. Because there are few places on Earth where so many technological industries are so tightly packed and have the opportunity to “cross-fertilize” innovation, we tend to concentrate our investment efforts in New England.
Enhanced Returns at Exit
The value of a venture investment is realized at its exit. We believe that our investment strategy has the potential to maximize cash-on-cash returns of portfolio investments. Truly innovative products built on a combination of technologies are not “me-too” products: they are highly differentiated. While the potential exists for an IPO in the right circumstances, this type of investment generally offers performance enhancements that potential acquirers come to regard as “can’t make, must buy”. As a result, there is less need to fund major ramp-ups for marketing, sales and support. Investments of this type can, therefore, potentially exit earlier on less capital invested, thereby generating higher cash-on-cash returns and diminished investor risk.