America’s Frontier Fund aim to re-build US tech leadership

A broad group of some of the nation’s top scientific, business and policy leaders have united in the newly formed venture firm America’s Frontier Fund to begin re-building U.S. global technology leadership, and they’ve chosen New Mexico as their launching pad.

To kickstart the initiative, the State Investment Council approved a $100 million investment in a first $500 million fund that AFF is now raising to pull emerging, cutting-edge technologies out of national labs and research universities and take those innovations to market through new startup companies backed by AFF capital and expertise. The SIC is the first public entity in the nation to directly commit money to the AFF fund, and it’s the largest single investment in a venture fund to date made through the council’s private equity program, which pumps money from New Mexico’s Severance Tax Permanent Fund into venture firms that invest in local startups.

Over time, AFF expects to raise a lot more public and private capital for its nationwide initiative. But SIC’s commitment right out of the starting gate puts New Mexico front and center in what could become a major catalyst for critical, high-tech development across the country, with New Mexico positioned smack in the center.

AFF is the brainchild of some of the nation’s top leaders, who want to stem the decades-long decline in U.S. technical and industrial superiority that’s made the nation vulnerable to emerging challenges from competitor nations, especially China. The pandemic clearly exposed those vulnerabilities, throwing supply chains into chaos and undermining critical industries. And this year, the war in Ukraine further displayed the difficulties caused by U.S. and world dependence on key natural resources like oil and gas from aggressive, hostile nations like Russia.

The crux of the problem, according to AFF leaders, is the erosion in homegrown development of emerging, 21st-century technologies that feed today’s high-tech industries and that, going forward, will enable the social, economic and political progress needed to cement U.S. leadership and national defense in the future. That includes everything from microelectronics, artificial intelligence, and advanced manufacturing to quantum sciences, advanced communications, new energy generation and synthetic biology.

In his address to the SIC on Tuesday, AFF CEO Gilman Louie called those things “frontier technologies” that will define the future. Taken together, they represent the “dawn of a new technology revolution,” Louie told council members, and the U.S. can’t afford to be left behind.

“Leadership in these technologies will not only guarantee economic prosperity, but also national security,” Louie said. “These technologies will impact every facet of life, from health care, food production, energy and the environment to education, entertainment, work, commerce, defense and scientific discovery.”

The federal government made a major, first step to begin rebuilding the nation’s technology leadership in August when the U.S. Congress approved the bipartisan CHIPS and Science Act, which authorizes $280 billion in funding to expand domestic semiconductor manufacturing, research and development of new technology, and workforce training. And now, the public and private sectors must come together to build on that initiative, pumping a lot more money and talent into technology development at every level, Louie said.

A national strategy

To do that requires a scientific approach to investing that combines the expertise of leading scientists, technologists and policy leaders with the seasoned acumen of experienced investors and business executives.

And to facilitate those efforts, AFF has developed a process it calls “Frontiercast,” which uses advanced data analytics to help produce technology roadmaps.

“Frontiercast informs us as to what to invest in, and our Frontierscape provides us with mapping that helps us define where and who to invest in,” Louie said.

That process brought AFF to New Mexico, given its extensive scientific infrastructure. That includes the state’s national labs and three top-tier research universities.

“New Mexico has the highest concentration of scientific talent per capita,” Louie said. “It has untapped world-class research and development and patents.”

To tap into that mass of emerging discovery and innovation, AFF plans to build a network of “venture studios” around New Mexico — dubbed Roadrunner Studios — that will be located next to key research centers and headquartered in Albuquerque. AFF will staff Roadrunner Studios with scientists, technologists and businesspeople who together will comb the labs to sniff out the most-promising technologies that can be brought to market through homegrown startups backed by AFF investment and wrap-around support services.

That will make New Mexico the launching pad for AFF’s national strategy, converting the Albuquerque venture studio into the firm’s central headquarters for a chain of studios that AFF will build in key locations around the U.S. The studios will virtually connect local and national teams in a collaborative effort to unlock technology innovation in targeted communities — particularly in places traditionally overlooked by venture investors — to potentially unleash a wave of new frontier-tech development.

The goal is to bring national and local talent together in the nation’s heartland — outside of traditional bastions of venture capital on the East and West Coasts — to build frontier innovation centers that could benefit from AFF financial backing while also attracting investment from other national venture funds.

“Roadrunner Studios will serve as the hub of a nationwide virtual Silicon Valley connecting other centers of scientific, technical and business excellence across the U.S., networking new and growing technology ecosystems throughout the country that (AFF) will also invest in,” Louie said.

It starts in NM

With the SIC’s new $100 million commitment, AFF will immediately begin constructing the Roadrunner Studios network, said AFF general partner Norman Winarsky, a longtime venture investor based in California.

“We’ll create a series of hubs with New Mexico as the headquarters backed by technical resources and talent, venture investors, entrepreneurial advisers, coaches and legal systems for business development,” Winarsky told the Journal. “In today’s world, it can all be done at a distance, with New Mexico being the central hub for Silicon Valley 2.0. I live in Palo Alto, and I believe this is the time.”

The AFF network will target transformative technologies that require “patient investment” with significant funding to build them into large, successful ventures over time, Winarsky added.

“We want to build transformative ventures, ones that create technology breakthroughs,” Winarsky said. “We’ll go for royalty.”

Roadrunner Studios will ferret out promising technology at the state’s national labs and universities, said general partner Steve Weinstein.

“We’ll find the technology and the people and create a company around them,” Weinstein told the Journal. “That’s our core talent. We’ve already done it many times in many other places.”

New Mexico’s time is now, Louie said.

“It has the talent, the leadership and the science,” he said. “(AFF wants) to harness the talent, drive, and communities of New Mexico to help the U.S. lead the world in the next technology revolution.”