Entrepreneurship: Commercialization of Ideas by N0hBP42w

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									   Entrepreneurship:
Commercialization of Ideas

              Michael J. Martin
   President TechTransfer Associates, Inc.
             September 21, 2010
                                 Mike Martin
• BChE, MBA and Certified Licensing
  Professional
• 15 years Business Development: DuPont,
  PPG, Ciba-Geigy
• 11 years Michigan State U.: Increase Small
  Business Presence on Campus, Research
  Consortium, Start-Ups, IP licensing.
• 10 years Virginia Tech: Commercialization
  of Research Results and IP in Research
  Contracts
 540-449-1173 miketechtransfer@comcast.net,
 Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   2
                         Entrepreneurship
• Difference between wealth and income?
• Creative Destruction:
  – Sufficient freedom to destroy the old business
    models
  – Sufficient law and regulation to manage risk of
    investors
• Starts with an Idea – Solve a Market Problem



   540-449-1173 miketechtransfer@comcast.net,
   Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   3
           How do you protect Ideas
             Intellectual Property
• Definition
  – USPTO, WIPO, EPO (US Constitution) :
    "To promote the progress of science and
    useful arts, by securing for limited times to
    authors and inventors the exclusive right to
    their respective writings and discoveries;"
  – Types of Legally Protected Intellectual
    Property: Copyrights, Patents, Plant Variety
    Certificates, Trade Secrets, Know How,
    Trademarks
  540-449-1173 miketechtransfer@comcast.net,
  Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   4
              How to Create Culture for
        Entrepreneurship: “Permission to Fail”

• University/Business Leadership:
   – Understand Risk
   – Do not punish failure: Recognize
     value of prior trials
   – Serial Entrepreneurs

• Access to: Patient Risk Capital; Business
  Start-up Services; Appropriate Risk
  Management.



       540-449-1173 miketechtransfer@comcast.net,
       Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   5
                                      Access to Capital:
                                 Technology Policy Framework
                  Source: Richard Palmer, National Institute of Standards and Technology, and AUTM Licensing Survey 2004.

                                                                 21% Friends and Family
                                                                19% Venture Capital
                                                                17% Angel Investors
Availability of Capital




                                                                12% Self Funded
                                                                8% State Funded
                                                                7% SBIR/STTR
                                                                6% Institutional

                                                                  The Valley
                                                                      Of
                                                                    Death



                              Basic                                      Development &                            Commercial
                             Research                                       Scale-up                               Operation

                          540-449-1173 miketechtransfer@comcast.net,                                                           6
                          Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP
                                                            Pre-Inc
                                                            •Early Business
                                                            Formation
                                                            •Repayment Expected
                                                            •Funding Range:
                                                            $125-300K




Research
•Applied Research
(No Gov. Funding)
•Grants, Gifts
(No Direct Repayment)                 POC/Prototype
•Funding Range:                       •Evaluate Commercial
 $25-200K                             Potential                                  Post-Inc
                                      •Rare Instance,                            •Business Formation
                                      Repayments Expected                        •ROI
                                      •Funding Range:                            •Funding Range:
                                       Average of $50K                           $50-700K, Angel



  Source Jacob Johnson U of MN Minding the Gap 2006
        540-449-1173 miketechtransfer@comcast.net,                                                     7
        Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP
                     THINK LIKE A VC
• Skimming the cream, not playing the margins
• First dollars in will want to own 40-60% of the
  company
• The perils of common shares and cram downs
• Perspectives on “investor hierarchy”
• Faculty role and grad student role in start-up
• When and what is the exit scenario?
• Technology is 5% of the start-up

   540-449-1173 miketechtransfer@comcast.net,
   Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   8
       Funding always takes longer
            than you think!
• Friends and Family: 2 – 6 months
• VC or Angels: 4 – 9 months
• IPO: 6 – 12 months
  (plus need good accountant and
  underwriter on board early)



  540-449-1173 miketechtransfer@comcast.net,
  Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   9
                   Valuation – Income Approach
               Risk Assessment for the Discount Rate
• R&D – Stage of Development, Time, $,
  Complexity
• Manufacture/Deliver Service – Scale up, Skill
  level, Repeatability
• Marketing – Resistance to Change, Innovators,
  Concentration, Distribution, Diffuse
• Competition - Barriers to entry, Existing Co.
• Management Team: Fit, Expertise, Core
  Competencies
• Legal – Regulation, Patents, Liability,
  Indemnification.
• Protection: Type, Breadth, Strength, Blocking




      540-449-1173 miketechtransfer@comcast.net,
      Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   10
           Evaluation of Start-up Opportunities
 • Triage
     –   Protectable
     –   Technical Merit
     –   Commercial Opportunity
     –   Management/Inventor Attitude



 BASIC/DISCOVERY                                                                       COMMERCIAL


                                                                                             BUSINESS
                                           UNIVERSITY/BUSINESS
UNIVERSITY/FED LAB


     540-449-1173 miketechtransfer@comcast.net,
     Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP              11
                Evaluation: Protectability

• Is there an invention?
• Disclosure: Complete,
  Inventors, Assignment
• Prior Art; esp. of inventor
• Potential Scope:
  – Broad v. Narrow
  – Freedom to Operate


    540-449-1173 miketechtransfer@comcast.net,
     Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   12
           Evaluation: Technical Merit

• Stage of Development

• Technical Development Resources
  and Feasibility

• “Robust Solution” to “Important
  Problem”

• Implementation Barriers

    540-449-1173 miketechtransfer@comcast.net,
    Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   13
  Evaluation: Commercial Opportunity

• Market Potential

• Market Trends

• Competitive Analysis

• Management Team




    540-449-1173 miketechtransfer@comcast.net,
    Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   14
          Evaluation: Start – up Team
Degree of Interest, Attitude and Motivation
• Interest: Lives with the problem and solution.

• Attitude: Willing to do what it takes

• Motivation: $ or move invention from lab to
  marketplace


   540-449-1173 miketechtransfer@comcast.net,
   Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   15
Business Case: University Spin-out
 • History
           ProGenetics
     – Joint Development Virginia Tech and Red Cross

     – Red Cross licensed to Pharming BV, went bankrupt

     – VT recovered technology and licensed to ProGenetics

 • Analysis
     – Technical Merit: Protein Production in Transgenic Animals

     – Market Opportunity: Global, Factor IX Hemophilia B, Protein C
       Sepsis

     – Product Pipeline: Factor IX, VIII, Protein C, Fibrinogen

     – Management: Strong team with Strategic Partners

     – IP Protection: World wide patent estate
                ProGenetics’ History

• $3M Angel Investment
• Founders: Bill Velander & Julian
  Cooper
• Key participation:
   – founder/pres of ResGen
   – former VP ING bank
   – the “pioneer of FVIII & FIX”

 540-449-1173 miketechtransfer@comcast.net,
 Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   17
                 Sales and Marketing

HemoCare                                        $
                                                            Pharma Partner
     – FIX and FVIII                                              – Clinical Validation
     – Management                                                 – Production
                                             Tech                 – Sales
 $                Tech                       Trans
                  Trans
                                                                  – Marketing

ProGenetics
     – Technology
     – IP Estate
 540-449-1173 miketechtransfer@comcast.net,
 Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP    18
             Lessons Learned in Start-ups
• WHY DO MOST START-UPS FAIL?
  – Poor planning.
  – Lack of management ability.
  – Insufficient capital.
  – Misreading the market.
  – Emotional rather than logical decisions.
  – Ego and greed.




   540-449-1173 miketechtransfer@comcast.net,
   Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   19
                                   Conclusions
• Entrepreneurship requires
  – Legal Framework: IP laws, contract law,
    bankruptcy law, business formation
  – Culture of protecting commercial viable research
    results
  – Legal, Technical, Business Service Expertise to
    provide infrastructure for business formation
  – Incentives for VC to participate in risky ventures
  – Ability to analyze and manage risk
  – Patience: Understanding this is long term
    investment
    540-449-1173 miketechtransfer@comcast.net,
    Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   20
           Thanks for your attention
               Questions ?????


                           Contact
                      Michael J. Martin
                        540-449-1173
                miketechtransfer@comcast.net



540-449-1173 miketechtransfer@comcast.net,
Your Certified Licensing Professional™ - Defining and Developing the Value of Your IP   21

								
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