Innovation through acquisition

Years before it dazzled the marketplace with world-beating products like the iPod and iPhone — and many market cycles before it would become the world’s first trillion-dollar company — Apple staked its ground as the company that thinks different.

While Apple’s Cupertino-based R&D team is justly celebrated for their pathfinding, paradigm-shifting breakthroughs, a less heralded part of the company’s success — and one of the ways it thinks different — boils down to knowing a great idea when it sees one.

Apple, it turns out, contains a lot of little seeds. That’s because many marquee, company-defining technologies like iPhone’s multi-touch, Siri and flash storage were enabled or given a big boost thanks to acquisition — Apple’s purchase of entrepreneurial startup firms and their products, patents and talent.

That innovation-through-acquisition model isn’t unique to Apple — or even the tech industry. And if Mike Bechtel, general partner at Chicago-based venture capital firm Ringleader Ventures, has his way, it will be more prevalent and more profitable for large, established companies as time goes on.

Connecting oaks with acorns.

Founded in 2013, Ringleader Ventures set out to uncover, establish and invest in profitable partnerships between established enterprises and fast-thinking entrepreneurs. The firm sees itself as a conduit of sorts between Russell 3000 companies that recognize the need for fresh thinking and startups offering the solutions these big companies seek who have been unsuccessful in attracting big-time attention.

“Most venture capital firms take a supply-side approach,” Bechtel says. “They spray money around at startups and hope they land on something great. We start by talking with C-suite executives at Russell 3000 companies to see where they’re feeling stuck — what their pain points are. Then we go looking for early-stage startups who’ve intentionally or unwittingly solved their problems.”

After painstaking due diligence, Bechtel says, Ringleader will take an investment in the startup and make an introduction to the corporation with the need.

“People think it’s counterintuitive to invest first,” Bechtel says. “But it’s a sign of seriousness. Our corporate partner looks and says, ‘it’d be a real shame if I didn’t profit off of this good idea, too.’”

Corporate partners can invest in a startup alongside Ringleader, but they might also choose to acquire it outright or simply engage with the startup commercially.

“We’re looking for acorns, not oaks,” Bechtel says. “The acorns are where you get the superior growth trajectory and profitability. Ringleader’s beating the bushes to uncover them.”

McGuffin helps startups put their best face forward.

McGuffin Creative Group is a partner in Ringleader Ventures, as well as its go-to for marketing and creative services to help its startups define and refine their stories. During its relationship with Ringleader, McGuffin has helped several small, ambitious companies craft compelling, breakthrough communications designed not just to attract potential customers but to entice potential suitors, as well.

“McGuffin plays a huge role in what we do,” Bechtel says. “Startup founders are often too close to their own business to effectively explain it to others. McGuffin comes in with fresh eyes, the gift of artistry, language and design. To the founder, McGuffin’s work is sweet ambrosia: Founders take great pleasure seeing McGuffins bring their business messages so vividly to life.”

In recent years, McGuffin has worked with a number of Ringleader prospects, helping these fledgling businesses craft narratives that bring energy and excitement to their mission stories. Here are a few examples of the ways McGuffin works alongside entrepreneurs to develop the communications that allow these startups to stand out and stand apart: