Case Study 02: Blue Tech Ecosystem Fundraise
The Opportunity
Despite a plethora of innovation, the lack of connectivity among entities in a region hinders the acceleration of a self-sustaining innovation ecosystem. A State entity tasked with supporting, expanding, and accelerating regional innovation ecosystems contracted us to support developing a process for seeding ecosystem-level investment opportunities.
The funding model is intended to issue seed-stage capital to investment theses within an approved area of opportunity for use with ideation, ecosystem engagement, and early validation. The first area approved under this model was a Blue Tech Industry 4.0 adoption opportunity.
The Challenge
Without a historical track record of this type of financial investment, we needed to leverage the use-case of the Blue Tech opportunity not only as a real ecosystem investment, but as an applied means for designing and testing a repeatable process to present and evaluate ecosystem-level investment opportunities going forward.
Our Approach
We worked with our client and the organization selected to spearhead the initiative to develop and present the first investment thesis under the Blue Tech opportunity.
As part of the process, we unanimously agreed on the need to simultaneously establish a repeatable model for determining and evaluating opportunities, as well as a clear opportunity-to-investment thesis pathway— a subsequent process for translating core areas of opportunity into tangible investment theses to be spearheaded by a lead organization within the State.
We used the Blue Tech investment thesis to develop a repeatable process for assessing future investment opportunities, modelled after the investor pitch style used to fundraise capital in startup ecosystems.
Key Insights
Strong market forces make for a strong investment thesis. When seeking to catalyze ecosystem-wide impact, identify investable areas with significant market forces at play. This leverages existing traction as a multiplying effect to de-risk a single investment
The leader, in addition to the positioning of the organization selected to spearhead an investment thesis, matters for the success of the project. An effective investment thesis leader must possess both the facilitation skills and the established authority to drive ecosystem-wide collective engagement in large-scale solution building.
Developing and following a clear investment review process clarifies and de-risks investment opportunities. Having a clearly mapped out multi-stage investment review process is mutually beneficial for both the funding applicant and the Investment Committee. It provides time for the applicant to refine the scope of their solution and to clarify their ask –ensuring it is as impactful as possible– and it provides the Investment Committee with a more comprehensive perspective from which to conduct due diligence, thereby ensuring informed investment decisions.
The Outcome
We worked with the entity selected to spearhead the initiative to support their presentation of a tangible, investable solution for accelerating innovation within the rapidly expanding Blue Tech ecosystem. We then helped craft a clear investment thesis and a compelling investor story that was delivered to the Funding Organization’s Investment Committee.
Throughout the pitch development process, we also supported the funding organization to document their perspective; helping to refine the fund’s investment canvas and other assets used to guide the Investment Committee through the fundraise.