University Startup Best Practices Presentation for Technology Transfer Tactics April 15 th, 2009.

University Startup Best Practices

www.innovatetech.com

Presentation for Technology Transfer Tactics April 15th, 2009

About Us


InnovateTech Ventures specializes in technology transfer services including venture creation

The company identifies technologies at research institutions, spins them out into startup companies and holds equity until a liquidity event

InnovateTech focuses on Information Technology, Software and Electronics opportunities particularly in the Mid-Atlantic Region

The company assist clients with technology transfer strategy and execution

University Startups


The National Council on Entrepreneurial Tech Transfer web site contains the following statistics:

20 year returns for Early/Seed VCs was 20.6%, compared to 13.8% for Later Stage VCs and 8.2% for the S&P 500

8 percent of all university startups go public, in comparison to a "going public rate" of only 0.07 percent for other U.S. enterprises - a 114x difference

More than 400 university startups are created nationally each year based on federally funded R&D, which included Google, Netscape, Genentech, Lycos, Sun Microsystems, Silicon Graphics, and Cisco Systems

68% of university startups created between 1980 to 2000 remained in business in 2001, while regular startups experienced a 90% failure rate during that same time period

Key Variables


Key factors in predicting success

Market and product opportunity

Management

Funding

Startup categories

Lifestyle

Bootstrap

Venture Capital track

Hypothetical Companies


Greenway Education

Bluezuke Software

InotexTechNanobine Pharma

Limited IP

Professor company

Services

Lifestyle business

Valuable issued patents

Inventor less critical

Options to license to large companies

Multiple patent applications

Inventor critical

High risk

Will need venture capital

One patent filed

External entrepreneur

Bootstrap startup

Day 1 – Opportunity Knocks


Greenway Education

Bluezuke Software


Assessing the opportunity

Walk in opportunities vs. recruiting an entrepreneur?

What are the odds of success?

What are your alternatives?

Day 1 – Opportunity Knocks


Greenway Education

Bluezuke Software


Helping the startup

Finding management

Business planning and advice

Funding

Day 60 – Negotiating


Greenway Education

Bluezuke Software


Key considerations

OTT goals

Cash, equity growth, university support?

Inventor role?

Day 60 – Negotiating


Greenway Education

Bluezuke Software


Deal terms

Issues with cash drains

Equity provisions and board positions

Challenging terms

Antidilution

Threat of revocation

Assignment constraints

Day 90 on – Post deal


Greenway Education

Bluezuke Software


Considerations

Let investors lose sleep

How to keep helping the startup

Term revisions

When the startup is failing

Exits

Summary


University startups can be a valuable part of your commercialization portfolio

Key take-aways:

Understand the different types of startups and their needs

Push for the appropriate management experience level for the type of startup

Think of the investors perspective on licensing terms

Let professional investors lose sleep over the startup

University Startup Best Practices Presentation for Technology Transfer Tactics April 15 th, 2009.

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Transcript of University Startup Best Practices Presentation for Technology Transfer Tactics April 15 th, 2009.