| IP Advancement Labs | | Methodology for Accelerating the Commercialization of Technology
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Due Diligence
Ramp conducts a systematic evaluation of promising opportunities that is designed to validate in several dimensions. Depending on the phase of development of the technology and company, Ramp deploys initiatives to:
- Solidify the technology and intellectual property. This helps consolidate the value of the investment opportunity.
- Define the products to be developed. This focuses capital budgets on the highest value applications.
- Identify the markets for the technology and its application. This clarifies the commercialization opportunity.
- Identify the critical acceleration programs needed. This is the tactical step to accomplish the strategic march to early revenue.
- Outline the milestones to be achieved within a given investment. This checks progress against the expected plan.
- Plan the overall capitalization structure to fund the growth. This comprehends alternative monetization opportunities and is the best tool to apply non-debt leverage to amplify a potential return.
Investment guidelines, methodology, valuation, structure, and monetization strategies are agreed upon prior to a given series of milestone investments being made.
Investment Methodology – Milestone Investing
Ramp provides investment capital to support the achievement of clearly defined milestones. Measuring each investment's success against the mutually agreed upon, predetermined milestones allows Ramp to assess the investment's progress at every step. It is important to constantly ask the question: How likely is an investment to achieve its potential within the time and capital budgeted? When the technology is demonstrating clear market adoption and revenue potential is rising, milestone investing continues and moves closer to Series A financing. Whether such investment comes from Ramp's affiliates or externally, we believe that this discipline is the best fundamental way to lower portfolio risk in early stage investing.
Milestone investing also should act to maximize returns to Ramp by eliminating further investments in companies that do not demonstrate progress toward defined milestones. In these unfortunate but inevitable situations, our hands-on investment style also promises to give us a quicker handle on the best early exit paths. While they may not materialize the returns as originally expected, quick exits and reinvestment back into Ramp corpus does salvage some capital but more importantly, frees the Company to cleanly cut time losses to failed investments and move on to more profitable endeavors. This progressive style of investing reduces overall risk by pruning the portfolio along the way allowing the strong branches to prosper.
Ramp strives to provide ongoing continuity of financial support based on measurable market and technical progress. Ramp will direct the portfolio company's executives to stay focused on execution and delivery, not procuring the next round of financing. This methodology aligns the interests of Ramp with that of the entrepreneurs, minimizes capital spend and sets the expectation that the most important goal is constantly moving toward increasingly clear revenue opportunities.
Revenue & Acceleration Programs
Ramp guides raw technology and early stage applications into successful market opportunities. The goal is to accelerate the generation of revenue which helps cut the amount of capital necessary for success, validates the company's value and positions it for market leadership and profitability. Revenue growth is the cheapest form of equity capital and the most effective proxy for rising enterprise value.
Ramp will bring all of its investments through a common core process of revenue development. Ramp make investments that are appropriate for each step of a portfolio company's growth, whether it be to refine and execute on the technology, product, or market programs. To this end, Ramp has created three proprietary acceleration programs to help guide companies through critical early growth stages. They will do most often administered by one or more of our team of executive mentors or leading specialists. The programs include:
- Technology Acceleration (for Phase 1 investments) – Incorporates peer reviews, professional labs, and scientific rigor to insure the technology can match its representations and that its nature is truly revolutionary or valuable to a known market. Additional steps are taken to strengthen IP, and patent filings are created to protect the technology's position and capital expended to date.
- Product Acceleration (Phase 2) - This stage includes intense market research, customer and channel interviews, product and architectural planning, and documentation. Once multiple markets are identified, Ramp will help the company define strategies and tactical plans for each market opportunity worth pursuing. If there is a visible product performance or support gap the changes are made prior to launch. This leads to a keener focus on the value of licensing versus that of launching a fully built-out company. It also assures that the management team understands the value contributed by early customers and channel partners.
- Market Acceleration (Phase 3) – As a company begins to gain traction on revenue, Ramp will begin a structured process that educates and enables management to build scale with control. As opposed to getting to market as fast as possible, this stage builds on the marketing and development processes installed in Phase 2 and institutionalizes the support needed for further, smooth growth. Fundamentally, Ramp will act to help management move the company from marketing strategies to execution tactics.
Ramp focuses on building the management matrix that tie marketing, budgeting and sales together. These are the critical attributes of managing scale that create value to their investors in the form of higher equity values and make the company attractive to additional financiers. Finally Ramp actively cultivates partnerships and revenue opportunities that keep a company tracking toward profitability and market leadership.
Ramp's acceleration programs will address head-on the need for functional process and planning. As markets begin to adopt a technology, Ramp's assistance will point the company on a path to scale to best meet the growing demand. These programs mentor managers in a positive way and build good habits and processes for planning and executing operations, technology, marketing and sales. In the end, these methodologies become the culture of the company, positioning it for timely investor exits while preserving stakeholders' value.
Network of Resources & Professional Services
Highly specialized professional services, administered by experienced, hands-on management, is Ramp's approach. Our teams bring the necessary knowledge, methods, and people to an investment in a way that truly makes a difference in ROI. Early stage technology entrepreneurs often have good engineering talent, but due to lack of structure, personal preferences, or financial constraints, companies usually lack all of the resources necessary to attract the right talent in order to grow. This usually includes a seasoned CEO, marketing executive, or corporate development and sales specialists.
Ramp believes it has a solution to the problem. Our partners all contribute their relationships to maintain a rich roster of executives with razor-sharp experience who seek temporary but pivotal assignments in young companies. These are seasoned and highly motivated executive partners, industry experts, and advisors who strive to work with these well-funded companies such as exist in the Ramp portfolio. These executives include experienced CEOs, technology and marketing experts, and others who have built successful emerging technology businesses and in many cases served at senior positions with large industry leaders such as Microsoft, Real Networks, IBM, and Xerox. These individuals are paid by Ramp and have a direct upside equity option based on the business value they help create and monetize.
Through these individuals, Ramp provides the range of management services to its portfolio companies. Ramp's investment agreements will typically guarantee that its portfolio companies will access our network and acceleration processes in solving their training and management challenges. This gives everyone confidence that the best talent, specifically tailored for the circumstances, will be available and eager to help. It is also done in a way consistent with the budgeting and control processes Ramp will strives to install within their culture.
Exits
Ramp's approach is designed to attract royalties, licensing fees, and other partnership revenues in addition to conventional liquidity paths. This is in contrast to traditional venture investment models that rely primarily or exclusively on IPO or large M&A activity to achieve positive cash returns. Ramp believes that this added flexibility will allow the Company to fundamentally lower the portfolio risks inherent in early stage equity investing. By sub-licensing a given technology to multiple markets or applications, we multiply the payoff opportunities for that technology investment. In addition, licensing the technology does not rule out other options, i.e., a production revenue option or outright equity sale. With solid management teams, hardened technology, and clean capital structures, Ramp's graduate companies are designed to be positioned as prime candidates for venture capital firms seeking to make later stage investments.
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07.16.2008