The Ratio Club (TRC) borrows its name from an informal club consisting of the leading minds in post-war London, including Alan Turing, who came together to push the frontiers of cybernetics and the early notions of machine intelligence.
Much like the original group, TRC is a multidisciplinary group of experts with the intent of purpose-building startups that push the frontiers of machine learning, analytics and intelligence. The approach used is to couple the best elements of an accelerator, a think tank and a venture fund to incubate bespoke startups with a strict focus on data-driven applications.
The vision is to build capital-efficient startups with rapid time to market by leveraging the billions in R&D spend at government, university and corporate labs. To identify which stranded asset to commercialise, a network of end-users and potential strategic acquirers are engaged at the outset to identify and outline proven market needs. TRC founders in-residence stand up the new entities, each focused on matching a market need with the appropriate set of near commercial-ready technologies, creating an a-priori product-market fit at the time of inception. Stakeholders are aligned through a predefined founder-focused capital structure that mimics traditional institutional venture capital investors.
Market demand, and the critical element of product-market fit, for each startup is defined through exclusive access with various end-user-focused groups. For example, partnership with Enterprise Technology Research in New York provides access and technology demand information from a diverse network of more than 3,300 C-level executives from the leading private and public corporations across multiple sectors, including numerous Fortune 500 companies. This process effectively reverse-engineers the startup creation process, by beginning with market needs, and working backwards to identify, license and productise the key technologies required.
The Ratio Club strives to leverage as much existing knowledge as possible by commercialising proven technologies from either existing open-source projects or our research lab partners. The technologies already in the TRC pipeline are from leading institutions, including Xerox Parc, Sandia National Lab, Los Alamos National Lab, Johns Hopkins University – Applied Physics Lab, MIT Lincoln Lab, UC Berkeley and Stanford University, among many others in our network of research partners.
Having a starting point based on existing technologies and market access enables a capital-efficient startup process and capitalisation structure. The Ratio Club also aims to eliminate distractions for our founders by streamlining many non-core functions through a network of resources and mentors.
This speed and capital efficiency enables deep-technology focused product organisations to come to market and be ideal M&A candidates without the need to create billion-dollar exits. As a result, corporate acquirers can place these product-customer relationships directly into their own value chain much sooner and at a much lower cost than attempting such innovations internally.
The Ratio Club is focused on building data-centric technology companies in security, robotics, machine intelligence, internet of things and data infrastructure. The application domains of focus include digital cities and infrastructure, health and medicine, finance and banking, and business and commerce – analytics and cybersecurity. These are all large dynamic sectors, with an abundance of data and a strategic need for novel, data-centric applications.
The founding partners of TRC are experienced entrepreneurs, venture capitalists and government lab technology commercialisation experts. TRC has also recruited a large cohort of experienced product build founders with successful track records, and an adviser network to assist with technology and company value creation. While the fund is being raised, several companies are already in the initial build phase, including a cyber-focused analytics company, a secure content and messaging platform, an automated robot for smart infrastructure, and a data platform for risk management.
TRC will support the incubation of its portfolio companies through dedicated funds. Fund I has a target size of $50m, focused on a small number of corporate limited partners. A three-year investment horizon with a $4m average investment is anticipated. The goal is to create strategic, purpose-built M&A exits in a three-year timeframe, with a higher likelihood of success, and winning alignment for all stakeholders. TRC is creating a leveraged model for faster introduction and distribution of disruptive technologies to end-users and potential acquirers. The Ratio Club’s vision is to engineer innovation.
For additional information or detailed presentations, contact me: mike@newlineventures.com