Our investment strategy is Finding, Funding, and Scaling technology companies with breakthrough innovations that enable greener, more sustainable, and more efficient and effective manufacturing and use of products in an industry that can benefit humanity and bring manufacturing and IP back to America. We select technology companies with innovations that hold the potential to bring transformative economic value and impact in the world through broad adoption, and that will deliver cash flows to the IP Capital Fund with a low correlation to the ups and downs of stock markets and the state of the economy.
For more than two decades, our team has been successfully investing in the breakthrough innovations—the IP—of technology companies that created American industries and prosperity, from the wireless industry (WiFi, 4G, and 5G) to the biotech industry (PCR), and beyond, by scaling broad adoption of their IP to make a lasting impact in the world.
In that same time, we have witnessed the offshoring of America’s manufacturing and IP to low cost labor markets trading higher profits for American jobs and unlocking fierce global competition today. We have also witnessed our society become more and more focused on short-term results and incremental improvements rather than investing in the long-term growth required to maintain our global leadership.
Without fundamental change in how we invest in our future and a return of the immigrant mindset that built this country, we cannot sustain our prosperity long-term in the face of global competition, nor will our freedoms endure, putting our nation’s future at grave risk.
Over the next 10 years, COTE will invest billions of dollars in this new generation of technology companies in a better way—a new paradigm—to inspire the entrepreneurs and the innovations that will build a better world for humanity and ensure our nation is not left behind.
We provide capital for scaling a breakthrough technology company’s manufacturing and operations to meet customer demand as they enter markets and beyond, backed by their “brick and mortar” IP assets, including new product designs, know-how, and proprietary manufacturing equipment and contracts.
We receive a percentage of a company's revenues ("IP royalty" or "revenue share") to provide our investors with an annual cash yield, paid quarterly, plus a percentage of a future company exit (IPO, sale) to buyout the royalty, leaving equity ownership and control in the hands of the entrepreneurs building it.
We provide IP management, technology, and operations support to protect, optimize, and scale the use of a company's IP assets, and we bring a shared technology platform for integrating smart manufacturing into the company's operations to optimize performance, profitability, and quality.
Our process and our model drive the success of our investment strategy and mission: Finding, Funding, and Scaling a new generation of technology companies with breakthrough IP that can deliver greener, more sustainable, more efficient and effective manufacturing and use of products in an industry that will benefit humanity when broadly adopted and bring manufacturing and IP back to America. Investing in the future of America in this way is driven by a core belief and faith — demonstrated time and time again throughout the course of our nation’s history — that the more value we create in the world for others through broad adoption of breakthrough innovations, the more value we create for our nation, our people, and our investors.
We, therefore, look for technology companies that have developed breakthrough IP that holds the potential to deliver transformative economic value and impact in the world through broad adoption, and that will deliver IP royalties (cash flows) to the IP Capital Fund with a low correlation to the ups and downs of stock markets and the state of the economy.
We look for breakthrough IP assets that also hold the potential to produce immeasurable ripple effects in the world when broadly adopted that will bring new opportunities to businesses and people everywhere — unlimited potential to benefit humanity — and that will inspire entrepreneurs to develop cascades of new innovations in applying these breakthrough IP assets to meet local needs, globally, and in other applications.
America's prosperity, its freedoms, and its global leadership — the light that it shines on the world — have resulted from exactly this approach in ways that are unparalleled in history: in scaling broad adoption of breakthrough innovations in manufacturing new physical products, from planes, trains and automobiles to the telephone lines that connect our world, to the cellphones and smartphones in our pockets, to the computers and electronics in our homes and offices, to new medicines that save lives, to the Coca Cola that the world drinks.
investing in scaling the manufacturing capacity and operations of companies with new physical products based on breakthrough IP, with the investment strategy to make a lasting impact in the world for humanity through broad adoption and bring manufacturing and IP back to America.
High barriers to competitors developing competing solutions (breakthrough IP involves deep science and engineering based breakthroughs and enabling IP assets for making new physical products that require many years to develop and commercialize, and large capital investments).
Investing in the broader business plan needs of companies with new digital products in high growth markets based on software IP, with the investment strategy to drive higher equity valuations over a series of financing rounds in the hope of achieving target returns in an exit for investors.
Low barriers to competitors developing competing solutions (software IP mostly involves incremental improvements that enable existing businesses and new business models to operate over the internet, i.e., online, through software apps and services on smartphones and computers)
Investment secured by the company's breakthrough IP and IP assets (new product designs, know-how, and proprietary manufacturing equipment) and (ii) contracts with customers, suppliers, and partners that enable its business to operate.
No losses expected.
Investment unsecured with venture capital relying on the promise of a company's business plan projections to support higher equity valuations and paper returns at each financing round that are unlikely to be realized in a future company exit.
We receive a % of company revenues that enables us to pay dividends ("revenue share" or "IP royalty").
% of company equity ownership and no dividends ("equity ownership").
We provide IP management, technology, and operations support, along with a shared technology platform for integrating smart manufacturing.
Monitor investments with the promise of sharing access to a network of human resources for growth, the value of which is difficult to predict or determine.
We receive an IP royalty buyout % in a future company exit (IPO, sale) that buys out our revenue share OR a fund exit that sells the revenue share.
Equity ownership % in a future company exit (IPO, sale) only, with the exit and its value at high risk due to competitors with competing software solutions.
12%-15% annual cash yield, paid quarterly.
Average annual cash yield over 5 years, ramping up with revenues, from a target low of 5% in early years to 20% or more in later years.
5 years to a future company exit (IPO, sale) OR a fund exit that sells the revenue share.
5-10 years to a future company exit (IPO, sale) to grow equity value.
Greater than a 2x net multiple, 20% IRR.
Minimum return for each fund investment because of the differences of the IP Capital investment model.
There is unlimited potential upside in each investment beyond the minimum because the capital and services of the IP Capital model are focused on scaling broad adoption of breakthrough IP.
Less than a 2x net multiple, 20% IRR.
Total return for all fund investments because of the high risk and high losses of the venture capital model.
To make up for the high losses of the venture capital model, the total return targeted in each investment is a 5-10x multiple, 100% IRR, which requires taxing each company with high equity ownership.
No Management Fee.
20% management fee.
Management fee is paid out of fund capital at 2% per year for 10 years for monitoring the progress of fund investments, regardless of performance.
5% transaction fee.
Transaction fee is paid one-time upfront on top of Fund capital for the added disciplines of the IP Capital investment model and process and to support building the mission and community.
20% of fund profits.
Fund profits from the revenue share and from the IP royalty buyout in a future company exit, or a fund exit that sells the revenue share.
20% of fund profits.
Fund profits from the equity ownership in a future company exit.
Growing company revenues.
Real value. Low correlation to the ups and downs of stock markets and the state of the economy.
Growing company equity value.
Speculative value. Highly correlated with the ups and downs of stock markets and the state of the economy.
A proven team, model, and process, mission driven, for investing in companies with breakthrough IP having a low correlation to the ups and downs of stock markets and the state of the economy, that is asset backed, and that provides a cash yield and the potential for exponential growth in returns in a future company exit (IPO, sale).
Access to capital for building out manufacturing capacity and operations to meet customer demand and secure contracts, a shared technology platform for integrating smart manufacturing, and IP services to protect, optimize, and scale use of the IP assets, without giving up equity ownership or control or being forced to exit.
Broad adoption of breakthrough innovations that can build a better world for humanity and produce long-term growth in jobs and higher wages for people and their communities, and lay a foundation for bringing manufacturing and IP back to America to ensure our nation is not left behind in the face of fierce global competition.