How Flagship generates returns on early stage, disruptive platform plays
Venture investment models come and go out of fashion, but Flagship Ventures has stuck with its thesis that novel, early stage platform companies with significant disruptive potential are the way to go. And rather than relying only on ideas coming out of academia, Flagship builds a company around many of its own ideas.
Public investors are rewarding that model in the current IPO window. In the past four years, nine Flagship portfolio companies have gone public. Five of the seven IPOs since the start of the current window in 2013 are in the black; four of those five are up over 50% from their IPO price.
For comparison, of 102 IPOs on NASDAQ since the start of 2013, 56 are in the black and 30 of those are up over 50% from their IPO price. These figures exclude three companies that sold units in their IPOs.
"At Flagship, we believe that everything we do - whether we invest and develop, or innovate and found and then invest and develop - is based on breakthrough technology," said Noubar Afeyan, managing partner and CEO. "The only way we think you can get paid long term for this kind of risk is to have a product platform."