Maybe if medical experts had evaluated Theranos' technology, it wouldn't have raised hundreds of millions in venture capital – which was all lost, with the CEO and president sentenced to prison.
And maybe those experts could have directed investors to tech that works.
Cyrannus, a platform set to launch with test users this spring, aims to connect investors, founders and experts to remove the barriers each group encounters in the investing world – and help the best ideas get funding, founder Lee Mosbacker said.
"I don’t see us competing with traditional VC – I see us as reinventing the asset class," Mosbacker said.
The Columbus company has $100 million "under influence" – basically the combined funds and individuals using the platform to vet deals so far, he said. That would grow as members sign up. Eventually the startup could raise its own investment fund.
"I definitely have been in the venture ecosystem for 20 years – I’ve seen the good and the bad," the serial entrepreneur said. "We just built a system that really addressed the customer needs."
For founders, that means a fairer shot, he said. Each pitch gets a score from relevant industry and academic experts, so the best ideas rise to the top – without "who-you-know" bias.
"One of the things we’re really offering founders is the ability to get a check in weeks vs. months or years," he said.
For the experts, it's a way to influence the future of technology in their fields without having to raise a massive fund. They'll get credits to invest based on their activity vetting pitches.
"There’s a lot of brilliant people behind the scenes – they feel disenfranchised," Mosbacker said.
For investors, who must be accredited by the SEC, the network addresses three main problems that keep a lot of wealthy individuals from dipping their toe in VC, he said.
"They want better due diligence and transparency around deals, they want better data and they definitely want liquidity," he said. "They don’t want to be locked up for 15 years around hypothetical valuations."
That doesn't mean the startups are expected to mature and generate returns faster. The liquidity will come from a form of swap in special purpose investment vehicles.
A serial entrepreneur's path
Mosbacker grew up in rural Ohio and started his first online business as a teenager. He sold that in 2001 after graduating from Ohio University, then went to Ohio State and earned a doctorate in physics.
He spun out terahertz imaging technology from Ohio State as co-founder and CTO of Traycer Diagnostic Systems, which moved to the San Francisco area in 2014 to be closer to a VC investor and an engineering team.
Mosbacker stayed for a decade in the Bay Area, but moved back to New Albany during the pandemic and plans to stay.
Central Ohio's entrepreneurial and investing community was "nonexistent" when he left, he said. He returned to a more vibrant scene built with "really difficult work" by those who stayed.
"It’s much better," he said. "I love the passion. Cyrannus is here to amplify the passions."
After Traycer, Mosbacker also founded a company generating predictive data for handicapping sports bets, then a second company with a client buying that data.
His partner in the sports analytics venture, Michael Sampoerna, is the youngest son in an Indonesian family that made a fortune in tobacco and now is CEO of the family's strategic investment group.
Based in Singapore, Sampoerna also joined Mosbacker as a partner in Kobol Fund, a Columbus pre-seed investment firm; they are the only investors. Kobol in turn funded half of the $10 million Ohio Gateway Tech Fund, with the rest coming from Ohio Third Frontier.
The first users of the Cyrannus expert network are Sampoerna and Sherry Witter, chief investment officer of the Witter Family Office and a previous general partner in multiple hedge funds.
Cyrannus also was the 2023 presenting sponsor of CodeLaunch, a hackathon and pitch competition that takes place in several cities, including in Columbus last year. Two of the winners from the year's events are slated for investments that aren't yet finalized.
How does Cyrannus work?
Cyrannus' tech and app were built by Columbus-based BigKittyLabs Inc., a custom software, web and mobile developer.
"Our intelligence doesn’t infer from data to come up with a prediction," Mosbacker said. "Our intelligence manages the group collective. ... The point of the technology is to find the best people in the world, around very narrow clusters, and allow investors who want to invest in those areas to have access to them."
It's a process akin to peer review for a scientific journal. The platform will track how well startups do and the experts' accuracy will determine how they are rewarded or if they have to leave the network.
About 10,000 have expressed interest; the goal is to sign about 1,000 experts over the coming months, many from Ohio's colleges and universities. The platform would add new investors after the expert network is built out.
Cyrannus is named for a fictional galaxy in Battlestar Galactica – the sci-fi show's glossary is Mosbacker's source for naming his other companies.
The company's revenue would come from subscriptions to access deals and experts, as well as management fees for the investments and any eventual fund. It has 10 employees so far.
"Let's fast-forward 10 years," he said. "This is where the investment market is headed.
"I want to have a lot of influence with our network – a lot of people who will be in Ohio who will help shape the future of technology," he said. "If we pull that off, that cements Ohio as a keystone in the venture economy."
