America’s Frontier Fund has raised the first $100 million in a $500 million campaign, part of which will be used to create a venture studio in New Mexico to tap into the deep technology developed at the state’s national laboratories and universities.
The State Investment Council stepped forward Nov. 22 with up to $100 million over 10 years for America’s Frontier Fund’s quest to create an ecosystem of startup tech companies in New Mexico, particularly in the areas of microelectronics, artificial intelligence, advanced manufacturing, quantum sciences, 5G/6G communications, new energy and synthetic biology.
“It’s a very difficult process to commercialize new technologies,” said Norman Winarsky, a general partner at America’s Frontier Fund, a new investment platform focused on identifying new technologies best suited for the commercial market.Winarsky believes the fund has the initial players in place and with the state funding can now build a team to enable more research at the labs and universities to reach the market through startup companies.
AFF would collaborate with and invest in entrepreneurs seeking to spin off technology from the labs and universities.
The State Investment Council funding would be used to recruit a team and also develop a physical venture lab, which could mean acquiring or leasing an existing building, likely in Albuquerque, or building a venture studio, Winarsky said.
“We believe over 10 years they will help this ecosystem come together and create new companies and, hopefully, keep them here,” said Charles Wollman, the investment council’s spokesman. “Their group individually and as partnerships has come up with success. They have the tools and ideas to make this a success.”
America’s Frontier Fund CEO Gilman Louie through his other company, Alsop Louie Partners, invested in Meow Wolf in 2018 as the Santa Fe-based immersive entertainment juggernaut explored expanding to other states.
“We believe New Mexico should be a global leader in frontier tech because New Mexico is at the center of many of America’s new scientific research and discoveries,” Louie told the State Investment Council at its Nov. 22 meeting. “New Mexico has the highest concentration of scientific talent per capita. It has untapped world-class research and development and patents.”
The investment council seeks monetary returns on its $100 million investment, but the job creation expected from the companies created through the venture studio is also a return on the investment.
“One of the goals has been economic development,” Wollman said.
Up to 11 percent of the State Investment Council’s $6.5 billion Severance and Permanent Tax Fund paid for by the oil and natural gas industry can be dedicated to the fund’s New Mexico Private Equity Investment Program created by the Legislature in the early 1990s.
The $100 million invested in America’s Frontier Fund will be the largest investment yet from the private equity investment program, Wollman said.
“They are raising $500 million,” Wollman said. “We are the launch pad. We are the first institutional investor.”
Overall the State investment Council, overseen by an 11-member board, manages $38 billion, including the Land Grant Permanent Fund. The council distributes about $1.3 billion a year, primarily to the education sector, Wollman said.
America’s Frontier Fund general partner Steve Weinstein has had initial meetings with technology transfer and licensing entities at Los Alamos and Sandia national laboratories and at the University of New Mexico, New Mexico State University and New Mexico Tech as well as the Air Force Research Laboratory New Mexico Maker Lab.
“I think they were resoundingly excited,” Weinstein said. “They have been waiting for an organization that wants to create companies around their technology.”
Weinstein met with leaders at LANL’s Feynman Center for Innovation in mid-October.
“It was a high-level introductory meeting discussing feasibility,” LANL spokeswoman Tricia Ware said in an email. “The potential collaboration is in very early stages.”
Ware said LANL had no statement at the moment about the America’s Frontier Fund proposal.
Weinstein believes the venture studios can create two or three companies a year spawned from the 11,000-plus patents created in New Mexico in the past 30 years.
“It only takes one,” said Weinstein, referencing how Microsoft redefined Seattle, Dell in Austin, Texas, Qualcomm in San Diego and the legendary home run patent Gatorade at the University of Florida.
“Our feeling is we can build one or two,” he said.
Winarsky said the return on the state’s $100 million investment will come from the sale of spinoff companies to bigger companies and spinoff companies going public and issuing stock.