Based on the favorable Granta investment and return experience, ASM is now evaluating the deployment and operation of a standing materials innovation venture enterprise. The final determination on this evaluation will be made later this year by our Board.
Deploying such an enterprise could lead to a variety of member, market, and financial benefits to ASM. Regarding membership, it would likely attract new members from younger, entrepreneurial, innovation-oriented segments. It could create a new relationship between ASM and universities, their researchers, and technology transfer offices. By providing access to capital, which is traditionally difficult for materials-related companies, ASM would provide a new and unique category of member benefit.
From a market standpoint, a materials-dedicated venture enterprise would further position ASM as a relevant contributor to the leading edge of the materials community. Along with our Digital-first information offerings, and our Materials Solutions Network, the venture enterprise would complete a trifecta enabling ASM to advance its scientific, technical, and educational mission in a completely differentiated fashion within the materials marketspace.
Financially, a venture enterprise presents a more systematic, lower-cost, and lower-risk path to replicating the Granta returns. Investment priority would be given to companies with offerings re-sellable by ASM, as Granta was. However, we would also be able to invest smaller amounts in a variety of companies in materials-centric markets beyond our traditional information segments, such as sustainability, medical and biological applications, sensors, software, and novel processes.
Beyond the Granta experience, ASM can also emulate the non-profit applied R&D company that I led prior to ASM. That company deployed and operated a highly successful technology venture enterprise, still operational today, based in South Carolina. In the 11 years of my tenure, that company invested in 82 startups and secured 12 exits, five of which were advanced materials companies. Eleven of those exits were cash-in, cash-out for an average internal rate of return of 28.5%. The last exit was a roll-up of two invested startups within an Israeli landing party for a cash-in, stockout 6x appreciation.
To operate a venture enterprise for materials of this nature, we are calling upon members who have technical expertise and insights into the products and processes of investment target companies to assist with due diligence. If you are interested in playing this important role, which will be very comparable to the role played by member instructors in our education offerings, please contact me. I am looking forward to your feedback.
William T. Mahoney, CEO, ASM International
[email protected]
This excerpt is from the April issue of Advanced Materials & Processes (AM&P)
