SOURCE: Blueprint Ventures

April 20, 2006 07:00 ET

Entrepreneurs, Leading Corporations and Investors See Huge Potential in Early-Stage Corporate IP Spinouts

Blueprint Ventures Illustrates Success of Strategy Through LANDesk, Platform Solutions and Vidient Systems

SOUTH SAN FRANCISCO, CA -- (MARKET WIRE) -- April 20, 2006 -- As part of its ongoing strategic focus to fund promising technologies originally developed by leading technology companies, Blueprint Ventures continues to aggressively invest in early-stage corporate intellectual property (IP) spinouts.

Many leading companies, including Microsoft, NEC, Hewlett-Packard and IBM, are looking to monetize intellectual property that is outside their areas of core focus and has become "stranded" inside the corporation. In the last year alone, several companies, including Microsoft, have announced formal IP spinout programs. "We are looking to recoup a portion of our R&D investments and encourage new business investments," said David Hartnett, senior director of Microsoft's IP Ventures group. "Firms like Blueprint Ventures are helping us identify, spin out, and commercialize technologies that may no longer be core to Microsoft's business."

Blueprint Ventures, which has financed more than a dozen such spinouts in recent years, has developed significant expertise in these unique transactions. About two-thirds of Blueprint's deals have been early-stage corporate IP spinouts, including LANDesk Software (an Intel spinout in 2002), Platform Solutions (a Fujitsu spinout in 2003), and Vidient Systems (an NEC spinout in 2004). Blueprint-backed startups commonly use corporate IP and technical teams acquired from leading corporations as the foundation for their initial products.

"These deals provide a compelling value proposition for us as venture investors and for corporations looking to monetize their R&D," said Bart Schachter, a founding managing director of Blueprint Ventures. By leveraging prior corporate research and development, Schachter said, Blueprint is able to fund early-stage companies at a lower cost and at lower risk than typical "garage" startups that spend their first few years in initial technology development.

One Example of an R&D-rich spinout: LANDesk

As one example, LANDesk, a PC network software management company, spun out of Intel with about a decade of prior technology investment, resulting in immediate sales in the aftermath of the spinout and significant subsequent growth.

An increasing number of entrepreneurs are also attracted to the corporate IP spinout model. "The deal structure and reduced risk of the spinout were extremely attractive to me as an entrepreneur," said Michael Maulick, president and CEO of Platform Solutions (PSI). Maulick was recruited to PSI by George Hoyem, a Blueprint managing director, when Blueprint led the company's spinout from Fujitsu. "The value of the company's intellectual property was an important element in my decision to join PSI," Maulick said. "I knew that nobody else in the industry could match the level of innovation coming out of the gate."

Blueprint's Unique Relationship With Major Technology Companies

As a leading investor in this spinout model, Blueprint Ventures is unique in maintaining non-exclusive relationships with several dozen leading technology companies. "Many venture firms may invest opportunistically in corporate spinouts, but they won't make most of their investments in this area," Schachter said. "Others focus on two or three companies only. We consider it essential to rank each spinout opportunity against those from dozens of other corporations, ensuring that we back world-class projects that can compete effectively in the global marketplace."

Blueprint's investments in early-stage corporate IP spinout deals are typically pre-revenue and involve a small team of technical founders with relevant patents and know-how. A target market often has been identified, and a prototype often exists. Blueprint typically works to build the management team and leads a venture syndicate to jump-start the new venture.

Blueprint expects to close several additional deals this year before raising its third venture capital fund late in 2006.

About Blueprint Ventures

Blueprint Ventures is a seed- and early-stage venture capital firm focused on IT infrastructure start-ups, including systems, software, and components. Located in the San Francisco Bay Area, Blueprint specializes in funding early-stage corporate IP spinouts by partnering with high-tech companies to commercialize their intellectual property. The firm targets companies that deliver disruptive technologies to market in a timely, capital-efficient manner. Investments include LANDesk Software, Platform Solutions, Vidient Systems, and WiSpry. For more information, visit www.blueprintventures.com.

Contact Information

  • Contact:

    Steve Kaufman
    New Venture Communications
    (408) 436-0774
    Email Contact

    Bart Schachter
    Blueprint Ventures
    (415) 901-4004
    Email Contact