In cer­tain cir­cum­s­tances, expan­ding a busi­ness in the tra­di­tio­nal sense can actually limit value for a com­pany whose technology’s grea­test poten­tial is as an enabler. An enab­ling tech­no­logy is a tech­no­logy that may have dif­fi­culty suc­cee­ding in the mar­ket­place on a stan­da­lone basis, but can signi­fi­cantly increase the per­for­mance of ano­ther tech­no­logy or com­pany when combined.

Com­pa­nies pos­ses­sing enab­ling tech­no­lo­gies must, of course, prove their tech­no­logy is effec­tive, per­haps through cli­ni­cal tri­als, beta cus­to­mers, or tech­no­logy part­ner­ships. For these com­pa­nies, inves­t­ing hea­vily in sales efforts or gro­wing their geo­gra­phic foot­print may even be coun­ter­pro­duc­tive. Often these com­pa­nies are well advi­sed to focus the majo­rity of their efforts on fur­ther deve­lo­ping their core tech­no­logy and incre­asing its attrac­ti­ve­ness for inte­gra­tion into exis­ting pro­ducts as oppo­sed to buil­ding out a stan­da­lone business.

We believe that there is an inher­ent foun­der and inves­tor bias toward “com­pany buil­ding”, lar­gely because that kind of pro­gress is more easily mea­su­red (sales, cus­to­mers, employees), and both foun­ders and inves­tors can find it dif­fi­cult to reco­gnize and pro­perly assess pro­gress that is less easily mea­su­red (patents, new dis­co­veries, advan­ced know-how, lear­nings from a test). At bm|t, we reco­gnize this bias and work clo­sely with foun­ders to pro­perly eva­luate their uni­que oppor­tu­nity set to col­la­bo­ra­tively reach an opti­mal out­come. This requi­res that the foun­ders and inves­tors share a vision and estab­lish a trust that allows for pur­suing paths that might be less mea­sura­ble but more value crea­ting.

Our app­re­cia­tion for com­pa­nies with less mea­sura­ble paths was recently rein­forced, because two of our most suc­cessful inves­tee-part­ners did not gene­rate sub­stan­tial reve­nues but pos­s­es­sed tech­no­logy that was so uni­que and highly pro­tec­ta­ble that the com­pa­nies dra­ma­ti­cally increased their value wit­hout signi­fi­cantly expan­ding their busi­ness in the tra­di­tio­nal sense.

With our under­ly­ing goal of cata­ly­zing Thüringen’s eco­nomy, bm|t invests across the full spec­trum of inno­va­tions – those that should indeed be the basis for large, stan­da­lone enter­pri­ses as well as enab­ling tech­no­lo­gies. Wha­te­ver each company’s opti­mal path may be, we look for­ward to the shared journey.

Your bm|t Team

* Our use of the term value in this news­let­ter is inten­ded to be inter­pre­ted more broadly than sim­ply share­hol­der value, as we app­re­ciate that there are many aspects to value creation.