Acquisition strengthens position of pioneering venture builder studio, brings new companies under its LIFECYCLE planning approach
CHICAGO--(BUSINESS WIRE)--11.2 Ventures ( www.11-2ventures.com) one of only a handful of venture builder studios (VBS) in the U.S., has recently acquired the assets of Chicago-based K8 Ventures for $9.65 million. This acquisition enables 11.2 Ventures to apply K8’s assets across multiple portfolio companies, speeding those companies’ development and validating 11.2 Ventures’ unique LIFECYCLE approach.
The VBS model emerged to address the high failure rate of early stage technology companies and the ensuing capital flight out of the technology space. Distinct from models like the startup incubator, accelerator, or factory, all of which depend on attracting entrepreneurs and offering them varying degrees of support, the venture builder studio model maintains control over each portfolio company from concept to exit. 11.2 Ventures has capitalized on this control to pioneer a unique risk management approach to its companies’ returns on investment. Based on proven laddered bond portfolio management techniques, its LIFECYCLE approach plans for the building, scaling, and exiting of its companies in parallel, with each stage of the LIFECYCLE valued as an individual security.
“Early stage venture is increasingly undercapitalized. Flight from early stage venture is not only a missed opportunity for investors, but it hinders a vital driver of our country’s economic growth,” said Kurt Johnson, 11.2 Co-founder, CEO and Managing Partner. “Thriving in this space is more than a thesis. Success requires world-class leaders and operators aligning their respective vision, experience, and capabilities around building, scaling, and exiting meaningful early stage businesses.”
Greg Williamson, 11.2 executive board member and Head of Strategy at Pluribus Labs added, “the laddered LIFECYCLE drives diversification while improving cash flow management and portfolio company investment decisions. It’s one of the most exciting recent developments in venture capital risk management, and I’m thrilled to be part of it.”
The recent acquisition comprises four companies created by K8, including a first-of-its-kind AI-driven business model forecasting tool for executives. Other acquired assets include three additional companies, two joint ventures, and numerous investments in strategic enterprises. Both K8’s and 11.2’s ventures are largely driven by AI, specifically AI focused on natural language processing/understanding and computer vision. This technology is designed from the outset to be scalable and applicable across various portfolio ventures. This guiding principle, as well the fact that 11.2 is not a stakeholder in its portfolio ventures but rather their operator, means that it can use platforms developed for agriculture, energy, fintech, life sciences, and smart manufacturing to enhance or inform its other portfolio companies. As with its optimization of investor returns through its LIFECYCLE strategy, this version of the venture builder studio maximizes the value of a technological breakthrough by extending or retraining it for multiple applications.
As an operating company that seeds and grows its own technologies, a venture builder studio requires a diversified team with expertise and success in various industries. It is critical that this team have on-the-ground operator experience as well. According to Richard Rice, CEO of March Capital Corporation, “11.2 Ventures is led by a management team with deep industry and functional experience as well as diversified expertise, particularly in data science and general business management. This leadership is part of the reason I signed on to be an executive board member.” In addition to Greg Williamson and Richard Rice, Muhammad Azfar, CEO and Managing Partner of Auctus Capital Partners, has also joined the executive board of 11.2 Ventures to assist in growing and guiding the venture.
About 11.2 Ventures
11.2 is disrupting the traditional venture capital model by building its companies internally, maintaining control and consistency throughout the growth process and exiting opportunistically. 11.2 Ventures builds, scales, and exits companies by conducting these activities in parallel to increase deal quality and shorten typical venture “idea-to-exit” duration. Through this Lifecycle approach, 11.2 Ventures offers accredited investors end-to-end access to venture, encompassing early stage startup creation through its studio model and high quality, difficult-to-access mid and late-stage opportunities. 11.2 invests the majority of its capital in creating, building, and growing products/companies. As such it is structured as an operating LLC rather than an investment fund. Learn more at www.11-2ventures.com
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