At a time when deal volume for most transactions is anemic, spinouts of intellectual property from established corporations are soaring. So says Bart Schachter (pictured), whose firm Blueprint Ventures helps companies spin out unwanted or noncore IP.
It's not the multibillion dollar, transformational deals we've seen from corporates such as Tyco International Ltd. (NYSE:TYC), which
spun off of its healthcare and electronics businesses, or Motorola Inc.'s (NYSE:MOT)
planned spinout of its handset business (on hold until at least 2010) that are on the rise. The spinouts Schachter is referring to are smaller -- valued in the $50 million to $100 million range -- and often don't get much attention outside their corporate parents and the venture capital community. The main driver behind these deals, says Schachter, is the need to streamline businesses by shedding noncore assets.
"Since the middle of last year and the collapse of the economy, we've seen nearly every corporation, tech and nontech, looking at opportunities such as spinouts to generate cash and keep focused on their core, go-forward strategies," says Schachter.
Business has been good at Blueprint, with deal volume doubling over the past 12 months. Most recently, Blueprint helped the Swedish technology firm Anoto Group AB spin out
Livescribe Inc., maker of the Pulse smartpen, which Blueprint continues to back along with co-investors Aeris Capital, Vantage Point Venture Partners and Lionhart Investments Ltd., among others.
With established customers and revenue streams, and led by proven management and technology teams, corporate spinouts are easier to get funded than your average startup, says Schachter. But, in this environment, financing remains the biggest challenge.
"Since the beginning of the year, there's been a freeze in syndication because people are more concerned about their own portfolios."
At the same time, though, companies are much more eager to get deals done quickly. "When we started evangelizing this model six or seven years ago, we went through a process of convincing sellers this was the right thing to do. Transactions would sometimes take a year," says Schachter. "Now, sellers are much more motivated." - Suzanne Stevens
At a time when deal volume for most transactions is anemic, spinouts of intellectual property from established corporations are soaring. So says Bart Schachter (pictured), whose firm Blueprint Ventures helps companies spin out unwanted or noncore IP. 
Juergen Lasowski
And the winners are...
I was under the impression that Blueprint Ventures was shutting down and each partner was raising money for their own new funds?