Building and Scaling High-Growth Ventures from Valuable, Potentially Stranded MNC Assets with Innventure CEO Bill Haskell
Innventure is in the business of company building. Make no mistake though, it is not a venture capital company. Instead, Innventure launches lucrative businesses in a whole new way by leveraging novel technologies that multinational corporations (MNCs) have spent millions of dollars researching and developing, but then ended up deciding that the smartest path to commercialization lay outside their walls.
After evaluating these stranded assets for disruptive market potential and profitability, Innventure forms new companies to tap their commercial potential. Innventure’s team of experienced business leaders fund, run, and scale these new enterprises, ultimately taking them public.
“In 1993, when we first started the very first instantiation of what is now Innventure, we studied the DNA of losing companies and winning companies,” said Bill Haskell, CEO of Innventure. “That enabled us to systemize a process for what I would call the science of company building.”
Why companies shelve profitable technologies
MNCs can spend tens or hundreds of millions of dollars — and cumulatively into the billions of dollars — in pursuit of new technologies to drive their businesses. Yet, even after achieving technical success, they sometimes determine that bringing the technology to commercial success – i.e. establishing whole new enterprises around their discoveries – lies outside their core mission. To remain true to their corporate strategies, they may have to choose between shelving these assets or seeking an experienced external partner. Enter Innventure.
“It used to be that many of these companies would try to do these sorts of innovative things within their four walls,” Haskell said, “but now they recognize that outsourcing to a more agile company like Innventure may generate profits faster. In this kind of scenario, we are positioned to commercialize more readily, and we don’t ask them for any funding.”
Innventure’s partnership with Procter & Gamble, which resulted in the company PureCycle Technologies, presents one example.
“Procter & Gamble wanted to have access to high-quality recycled polypropylene resin for their sustainability requirements. So, after searching in vain for an acceptable existing solution, they had the determination and foresight to invent a technology to recycle polypropylene that could meet their needs as well as the needs of countless other companies,” Haskell explained. “After significant investment in time, talent and money, they achieved a breakthrough and got it to the proof-of-concept stage. They then wisely recognized that they weren’t the appropriate company to commercialize the technology since they wanted to buy high-quality recycled resin, not be in the recycling business. That’s when they reached out to Innventure, and we started a company called PureCycle Technologies, which has now grown into a public company, which has now built commercial capacity that is about to come on-line in Ohio and in other sites around the world. Procter & Gamble now has access to that resin — the product that they wanted all along.”
New revenue for MNCs
In addition to preserving MNCs’ strategic focus, partnering with Innventure provides other benefits. Depending on the character of the partnership, the MNC may get favorable pricing, a royalty, or equity in the new company. Ideally, the MNC becomes a channel to the market, either becoming a customer or selling the product to others.
“They can end up with tens or even hundreds of millions of dollars annually from royalties, improved product pricing, equity, or some combination thereof,” said Haskell. “That’s a much larger benefit than just selling the technology to someone else for a half million or a million dollars, which would return pennies on the invested dollars. One successful Innventure company can provide value that is literally hundreds of times more valuable than a one-time sale.”
By collaborating with Innventure, MNCs can increase their revenue, not just once or for a single quarter, but for decades in a continual passive stream.
Successful business creation with less risk
Innventure’s innovative business model is also designed to reduce risk in a number of ways. First, the team analyzes extensive data to identify what the market wants, as well as the product specifications that would meet that demand.
“Typically, inventors invent what they are interested in, which is different from what the market may actually need,” Haskell said. “This is partly why over 90% of all intellectual property ends up lying fallow someplace. The top 100 R&D companies spend approximately $500 billion on R&D annually, yet only a single-digit fraction ends up in commercial products.”
By targeting an existing demand, Innventure ensures a sufficiently large audience for its companies’ products.
“We only work on projects that can achieve at least $1 billion dollars in value,” Haskell said. “Having done this for literally three decades, I can tell you that it’s no more difficult to build a billion-dollar company than it is a $10 million company. You just have to pick the right product into the right market at the right time, so we concentrate on things that can create real value.”
Second, while many — if not most — new businesses rely on aspiring entrepreneurs who are growing into their role, the Innventure team of “serial CXOs,” as Haskell calls them, enjoys 30 years of experience operating and building companies. These business veterans, combined with specialists recruited from the relevant industries, run the new enterprises until they achieve commercial viability.
Third, Innventure does not need to raise outside financing, since it has a dedicated fund for the companies it creates. “This takes the capital risk off the table,” Haskell said.
Innventure innovates
Innventure builds the businesses of the future. By meeting market demand, commercializing valuable technology at risk of becoming stranded, and eliminating risk, they aren’t just entrepreneurs, and they aren’t just investors. Rather, Innventure belongs in a category of its own; it is a “smart capital” company, a “more-than-just equity” firm. Whatever one calls them, though, this team of titans can offer a markedly better choice for MNCs looking to commercialize their disruptive technology.
