Accelerator Fund

Many of the anticipated investments will be technology transfer commercialization projects related to biomedical and other life sciences developments. This represents an area often over-looked by the increasingly short-term interests of venture capital funds.

An Accelerator Fund is a capital investment pool that is a selective hybrid of: ⁽¹⁾ The traditional venture capital fund and ⁽²⁾ The newer genre of technology incubator, the business commercialization accelerator. It takes many of the positive attributes of each genre, while mitigating their shortcomings with respect to certain types of biomedical technology developments.

1) It is noteworthy that this is not a world-wide trend. The governments of Australia, China, Singapore and Taiwan, for example, have launched expansive programs of aggressive government-based financial and infrastructure support to capitalize on the financing difficulties occurring in the U.S.

2) Refer to Accelerator Fund schematic at the end of this section.

Over the past 40 years, institutional venture capital has developed an effective model for due diligence, oversight, governance and investment liquidation that can be applied to successful management of an Accelerator Fund. This way, investors in long-term biomedical financings can expect to achieve financial returns approximately equal to venture capital rates of return.

Expectations for developing/commercializing life extension technologies and providing strong financial returns to investors can be enhanced even further by applying key processes deployed by successful business accelerators, such as those that have been used in Texas and Florida.

These business development accelerators provide intensive hands-on participation with portfolio technologies and companies. This involves a structured role in portfolio selection, development of intellectual properties, organizational and personnel development, financial oversight and product and service commercialization. It also involves continuous participation of specialty professional service providers that work with the portfolio companies throughout their life cycle.

The Problem(s) and the Need

Historically, significant financing for biomedical technologies in the U.S. has come from government-related and other private non-profit sources. Over time, the changing political economy has led to a shortfall of these traditional funding sources . This is especially true for life extension technologies targeted at maximizing longevity while maintaining a high quality of living.

For a while, private equity venture capital fund managers perceived this trend as an opportunity for venture capital placements. Some prominent successes have been achieved. However, this biomedical sector generally could not keep pace with the high returns obtained in ever decreasing time periods in other non-regulated (or less regulated) technology sectors.

Most venture funds, for example, have become increasingly impatient to harvest returns from their investments, many expecting an “exit” within only 2-4 years. This trend has been adverse for many biomedical technologies, since they generally have a much longer gestation cycle than communications, electronics or information technologies. In addition, many biomedical technologies require regulatory approvals, which further increases development costs and lengthens the investment cycle.

Other forms of non-currency financial underpinnings have also begun to dry-up for the biomedical sector. The 1990’s were marked by a rapid expansion of technology incubators (both public and private) that provided infrastructure and mentoring to technologists. Many of these incubators evolved into real estate projects, whereby a building or business park is developed to be inhabited by promising technology companies. Too frequently, the incubator primarily simply became a vehicle for cheap subsidized rent for entrepreneurial ventures without sufficient process or controls to direct successful outcomes. And, many incubators found it was very difficult to fill their projects with clients, or to evict those clients that weren’t making progress. The incubator managers have been under continuous economic pressure to fill space in their project buildings, and consequently many end-up lowering selection criteria to increase occupancy. As a result, incubator outcomes generally have failed to produce many successful enterprises.

As a result of the preceding events, a clear picture of needs has begun to develop:

Provision of long-term “patient” capital to promising biomedical technologies
Supplemental backing in terms of a developmental infrastructure provided by premium services providers and managerial oversight
Reasonable assurance of a good financial returns to investors

The MaxLife Accelerator Fund

MaxLife addresses the needs in the financing marketplace by:

Having Fund Management comprised of Managing Directors with ca. 100 person-years of venture capital experience in “finding and minding” successful opportunities that achieve prominence in their marketplaces, as well as healthy financial returns to investors
Associating with Consortium Innovation Centers (CIC) in Southern California, which has been derived from two of the pre-eminent technology accelerators in the U.S. CIC has contracted with premium service providers such as PriceWaterhouse Coopers, Marsh McLennan, Blaine Group, Staubach Realty Advisors, etc. to mitigate problems before capital is invested
Developing a proprietary methodology of funds management that:
- insures the principal of investors
- provides an annual return of ca. 5%
- and still provides the high potential of a venture capital return in addition to these exceptional features

This Fund has established an investment strategy with supporting tactics that emphasizes the following criteria:

Industry emphasis will incorporate a focus on proprietary technologies that have potential for meeting optimum life extension objectives
A tech-transfer emphasis, leveraging the Manager's global network to identify the best qualifying opportunities, and then to relocate their central operations to appropriate sites
A preference for companies that can demonstrate existence of working proof- of-concept product(s) or process(s) that guide their R&D and/or commercialization
Preliminary screening and on-going grooming of investment opportunities by referral to CIC’s Success Formulas® process. This augments each opportunity with a virtual team of prominent management expertise by its pro bono sponsors in the areas of Big-4 accounting, legal services and governance, executive recruitment, risk management, etc… with a focus on optimizing portfolio selections as the highest-value "investable" opportunities
Initial individual investments ranging from $1.5 - $10 million with co- investment objectives to provide up to an additional $10 million in capital availability (some of which will be derived from members of CIC’s Capitalist Club)
Provision for follow-on investing for up to 8 years, provided predetermined progress benchmarks are achieved
A requirement that all investees have, or will establish, an administrative headquarters located in the U.S. within 2 hours commuting time of a Fund (or affiliate) office