Welcome to the 20s! To my ears, 2020 sounds very futuristic – but we are living it. The pace of technological change continues to accelerate and have profound impact on all of us. VIC’s motto is Technology Solutions for a Better World and the choices VIC makes in licensing new technologies reflect that motto. We are proud to create and develop companies that can make a substantial positive impact on the world, while providing our investors extremely high upside by developing the companies within VIC’s risk-mitigated innovation ecosystem.
We are presently in the process of preparing our 2019 annual report, a non-confidential summary which will be included in our February newsletter. However, here in our first newsletter of the year, let me offer a glimpse of the great progress made across the VIC ecosystem in 2019 and give you a quick preview of our plans for 2020.
Throughout 2019, there were exciting achievements across the VIC portfolio of companies, including regulatory clearances, major product development milestones, substantial new funding, sales growth, and acquisition negotiations. Importantly, the VIC Investor Network (VIN) which was formed in 2013, had its first exit. Those members who participated in the exit and all the VIN funding rounds from 2013-2018 had most of their total invested capital returned while still holding a portfolio of VIN investments where every single invested company presently appears to be tracking toward success. While we cannot guarantee that all of the invested companies will be successful, the combined rate of return estimated by share prices established by outside investors in subsequent investment rounds averages close to 80% per year. Inspired by this positive trend, we launched a major expansion of the VIC Investor Network in 2019 so that VIN now formally can participate in follow-on investment rounds, as well as providing the founding capital into newly formed VIC companies.
We also expanded the VIC ecosystem in 2019 by launching the VIC Foundry and executing the first licensing deal into this new entity. The VIC Foundry serves as an incubator for exceptionally promising technologies, with very high commercial upside, but which need further de-risking before private investment from the VIC Investor Network is placed into a new company formed to commercialize the given technology. Government grant funding is the primary source of the funding for validating the technologies. This approach allows us to pursue potential home run technologies that we previously opted to pass on as there were too many uncertainties to be able to recommend them for VIN funding.
Looking ahead, we anticipate multiple major milestones will be reached by VIC in 2020. For example, one of our portfolio companies is expecting acquisition term sheets to be tendered before the end of January. We have a second company expecting an acquisition term sheet in the first quarter and several other companies that have preliminary acquisition discussions underway. While it’s not possible to say with certainty what will happen in any of these instances since the terms are not in place yet, we do anticipate at least one and possibly multiple exits in 2020.
Last year, we laid the groundwork for establishing a new branch office in Atlanta. We expect to ramp-up operations in Atlanta quickly as it has a strong intellectual property base (including major research institutions like Emory and Georgia Tech), with significant potential to grow our investor base regionally. Also, the life science startup ecosystem in Atlanta is presently substantially underserved by venture development and investment professionals – a vacuum that VIC and the VIC Investor Network are perfectly positioned to fill. We have established strong partners and traction already and will be formally launching our search this month for the regional Managing Director based in Atlanta.
An additional element of the VIC ecosystem—the VIC Fellows program—also is being launched in January, which will further strengthen our access to talent and top intellectual property. Finally, we have a sizeable pipeline of new technologies that we established in 2019 that should provide exceptional intellectual property foundations for new VIC startup companies in 2020.
We have set our goals high for 2020 and we expect it to be a very strong year for VIC and the VIC Investor Network.
Calvin Goforth, PhD
Chief Executive Officer | VIC Technology Venture Development
Co-Manager | VIC Investor Network