The Evolution of the OTC
description
Transcript of The Evolution of the OTC
The Evolution of the OTC
A comprehensive approach to technology commercialization
The Texas A&M University System
Research and Commercialization in Universities
FY 2007 Statistics• $48 billion in research at US universities• $3.4 billion in industry funded research, a 15%
increase over FY 2006• Almost 20,000 invention disclosures• 3,622 newly issued patents• 555 new start-ups based on university
technology• Approximately 13,000 active licenses
Overview at Texas A&M System
OTC Facts
Evolving Demands
The Three Paths to Commercialization• Direct Licensing• R&D Alliances• Start-Up Formation
Partnership
The Office of Technology Commercialization
Since its founding, the OTC has:• Processed more than 2,400 inventions created
by A&M System faculty and staff • Filed more than 2,700 patent applications• Completed more than 1,700 License
Agreements and Material Transfer Agreements • Generated revenues exceeding $60 million
related to intellectual property rights
The Office of Technology Commercialization
Revenues have gone to support:• More than $20 million in sponsored research• Retention of important faculty • Support for more than 800 faculty and staff
inventors• Sharing arrangements with co-developers like
USDA and other universities
The Office of Technology Commercialization
The OTC:• Became the youngest technology transfer office
in the top 25 in North America in revenues• Is in the top ten in the number of license
agreements producing income• Does two-thirds of its license agreements with
small businesses• Files a patent every other day • Completes a license agreement once a week
In 2005 OTC Defined Commercialization Broadly
Licensing alone has minimal impact on the mission of the university• Education• Research• Public Service/Public good
University commercialization must be broader than licensing• Industry-university partnerships are key to
commercialization success
Office of Technology Commercialization
OTC is a matchmaker between System members and commercial partners• Single point of contact for partners• OTC works across silos
OTC defines commercialization broadly• Licensing• New venture creation• Increased research flow• Assist with new research infrastructure
Evolving Demands
OTC’s strength has been direct licensing
This is one of three basic activities that any technology commercialization office must be proficient in
As Texas A&M becomes more sophisticated, the OTC is challenged to improve in other areas
The future of the OTC lies in improving our abilities in the other two sectors of activity
Scope of OTC Services
Direct Licensing
Research and Development Alliances• Industry• State/Federal
Start-Up Formation
Improving Direct Licensing
Triage and Assessment• Preliminary Reports• Interview Reports
Communication of Commercialization Plan• Intellectual Property Strategy• Marketing Strategy
Disciplined selection of opportunities
Follow-through
Transparency
Technology Evaluation Matrix
Quicklook Reports Help to Manage Risk
TAMUS OTC Licensing Metrics
FY 2009 - $8.7 million in license revenue
How is the money divided up?• $1 million for patent expense reimbursement• $1.9 million to run the OTC• $2.9 million to inventors• $2.9 million to TAMUS System Members
Start-Up Formation
Creating companies • to allow us to move disruptive technologies
forward• to allow us to get a greater return on new
technologies
In the past, reliance on entrepreneurial faculty to initiate these
Currently, have a dedicated team that focuses on formation of start-ups
OTC and Start-up Creation(Establishing New Business Entities)
Identify opportunities with start-up potential for equity investmentAssist with market research, business planning and partnering (Commercialization Services)Partnering with early stage capital funds, investors, and strategic partners• Focus on the relationship and be demand
driven
Provide incubation possibilities at Texas A&M or with partners• Be born big with international presence from
the beginning
TAMUS Approach
Inventor led spin-out vs. university led spin-out• Small equity stake vs large equity stake• No investment vs cash investment• No university business involvement vs university
board seats• Part time professor CEO vs full time CEO• Small university upside vs large university
upside
What Are Spin-Out Opportunities?
Goldilocks technologies• Not developed enough to attract licensees• Developed enough to attract angels
Next steps usually involve further research at the university
Value add step is relatively inexpensive
Large market – fundable, exit strategy
Opportunity Review Process
Opportunities identified by licensing staff• Internal review of opportunities• Internal pitches of the vision of a company• Internal analysis of “why a spin-out”?
Analyze the technology, market, intellectual property, and internal support for a spin-out
Start-up Development
Phase I – Project Screening
Work done by Licensing Staff
Invention Disclosure
Technology Assessment
Identification of Products and Services enabled by the technology
Engagement as Potential Start-Up Project• Determination of inventor interest• Determination of Member interest
Phase I – Project Screening
Work completed by New Ventures Team
Market Analysis • Size of market(s)• Size of market segment(s)
Competitive Analysis (per market segment)• Competitors (sales of products/services)• Research competitors
Integrate information to create Assessment Report on Start-Up Potential• Inventor and Member interest• Market Analysis• Competitive Analysis
Go/No Go Decision
Phase II – Company FormationBusiness Plan Development• Rationale• Milestones• Funding needed• Licensing Terms• Exit Strategy
Internal Fundraising (cash for equity)• OTC• Members• External parties
Team Formation• Scientific Advisory Board• Research Team (e.g. TAMUS researchers who will develop research proposals
and conduct the research)• Management (external)
Phase II – Company Formation
Creation of Start-Up Proposal• Business plan• Risk profile• Expected research and equity upside potential
Submission of start-up proposal for approval (must be approved by Chancellor)
Drafting corporate documents
Filing for incorporation of the new company
Founding investment made
CEO contract signed
Execution of license
Phase III – Business Plan Execution
Fundraising by management• Assistance from OTC• Short time line with specific goals
o $1,000,000 within 12 months
• Fundraising success leads to success fee for CEO
After funding
R&D as needed
Completion of milestones
Achievement of objectives of exit strategy / termination of license
Typical Deal Breakdown
Caveat is that all deals are different
Starting point is a total investment of $75,000• OTC invests $25,000• TAMUS member invests $25,000• Research Valley Angel Fund invests $25,000
Starting point for equity break down is:• OTC 5% set aside for commercialization services• Inventors 10% set aside to keep their interests• Each of the 3 investors receives 28.33%• CEO is compensated 5-20% equity upon funding
Industrial R&D Alliances
Finding corporate partners to bring technology development forward
In the past, reliance on faculty to initiate these
Currently, members of licensing staff dedicate time to pursuit of industry alliances
Scope of System Capabilities
11 Universities and the Health Science Center• Campuses in Texas and the Persian Gulf state of Qatar
7 state agencies27,000 faculty and staff • Performed $637 million in externally funded research
Physical and Program presence in all of the state’s 254 countiesIn 2008 the A&M System• educated 106,000 students in degree programs
o 22,888 degrees awarded* * More than 1 in 5 students enrolled in a public university in Texas is attending an
A&M System institution• Agencies trained hundreds of thousands more students through practical
extension programs
Single Point of Contact
The need is clear, but how?
The System was the only organization which spanned the Members• OTC’s business focus made it a natural fit for
the jobo Referred clients to appropriate Members/laboratorieso Worked across siloso Recognized synergies between industrial clients and
multiple Members
Initially organized under Business Development in OTC
OTC and Business Development(Philosophy of working with the Marketplace)
Understanding commercial needs and demands can uncover collaboration opportunities and potential funding• Offer need-driven research opportunities to the
researchers
Collaboration opportunities are an outcome of researchers gaining an understanding of commercialization
Long-term commercial partnerships lead to research funding opportunities
Start Small - Build Upon Success
Bio-energy efforts were greatly assisted by OTC
Worked closely with AgriLife Research and AgriLife researchers• Led to millions of dollars in sponsored research• Enabled AgriLife to pay for dedicated Corporate
Relations staff• Has led to many more deals in AgriLife with
large industrial partners
Model is Evolving
Moving towards a distributed Corporate Relations model• Multiple offices/people in each of the major
Member organizations
Created a new Associate Vice-Chancellor for Economic Development• Coordinates efforts and helps to create bridges
between organizations
Corporate Relations Benchmarks
University of Wisconsin, MadisonOffice of Corporate Relations, Wisconsin Alumni Research Foundation, Research Park, WiSys
Purdue UniversityOffice of Engagement, Office of Technology Commercialization, Research Park, PURE Database
University of MichiganAcademic and Corporate Relations Center
Operational Model
State and Federal R&D Alliances
Finding state and federal sponsors to bring technology development forward
These alliances may include industry partners as well
In the past, reliance on faculty to initiate these
Currently, senior staff dedicate time to pursuit of these alliances
Results of Defining Commercialization Broadly
$100 million + in new revenue since 2006◦ State – industry – university research institutes◦ State - industry – university partnerships to attract
star researchers◦ Industry – university multi-year research programs
Direct impact on the mission◦ Education, research, public good
Keys to SuccessTop administrator support for
commercializationKey staff are from industry and speak the
language of businessCommercialization becomes part of the
project designIndustry partners know their ultimate goal is
important to the university as wellThinking beyond licensing to other possible
business support◦ Development funding◦ New venture creation
Get Involved Early
Build a team of Trusted Technology Advisors for our two customer bases: • University researchers • industry/investment partners
Long-term commercial partnerships can lead to research opportunities
Collaboration opportunities are an outcome of researchers gaining an understanding of commercialization
“Our goal is not only to discoverknowledge, but to apply it,”
Chairman Bill Jones Board of Regents