Presentation to ASQ/INCOSE Duncan Stewart President/CEO January 14, 2009

1. Presentation toASQ/INCOSEDuncan StewartPresident/CEOJanuary 14, 2009 High Tech High Growth High Impact

2. 501(c)3 nonprofit organization with a mission to provide resources and advice to innovative entrepreneurs, allowing them to successfully grow their companies. Our clients create high-wage jobs, commercialize cutting-edge technologies, and play a vital role in the economic development of the region. Resources Furnished Office Space Printer/Fax/Copier Phone/Internet Conference Rooms Advice Business Planning Executive Coaching Research & Analysis Investor Relations

4. Gary Markle Vice President Econ Dev Corp Board of Directors Executive Chairman Brian Binn President, MAC Chamber of Commerce Alan Steiner Retired Executive Hewlett Packard Dr. Dan Dapani Dean Engineering College UCCS Dr. Venkat Reddy Dean Business College UCCS Ex Officio Chairman Emeritus Ex Officio Ex Officio Jeff Cooper Managing Director New Venture Resources Jan Horsfall CEO Gelazzi Laura McGuire CEO Qgenisys Chris Blees CEO BiggsKofford Chris Odell Executive Chairman Fluke Networks Secretary Duncan Stewart Chief Executive Officer Staff President/Treasurer Mary Fox Operations Director Dr. Roger Neeland Program Director Heather Brown Business Analyst Paul Byer Senior Advisor Al Brown Senior Advisor Kris Everett Technical Analyst

5. Emerging Focus Areas Biomedical & Sports Technologies (BST) Security & Defense Technologies (SDT) Energy & Environmental Technologies (EET) Information & Communication Technologies (ICT)

6. TM Current Clients ProAutus

7. Programs/Initiatives • Colorado Homeland Defense Alliance • National Security Innovation Competition • CU Technology Transfer Office support contract • Riyadh Technology Incubation Center (Saudi) support contract • Internships (UCCS, AFA, CSU) • High Altitude Investors angel club • Emerging Tech Day at Homeland Defense Symposium • Technology Development Fund • New World Class Incubator Facility

8. Technology Transfer Fundamentals:Spinouts, Startups, and Licensing

9. NeoClassical Economics • Markets move predictably toward equilibrium where supply = demand • Assumes many buyers and sellers, rational decisions, prices set by the market transaction process, commodity-like products/services, and transparency (all transactions are known) • Wealth is created when suppliers hire workers and this income is used to drive demand • Large firms dominate due to economies of scale and scope • Ignores the origin of new demand • Depicts the market as static

10. Entrepreneurial Economics • Markets are chaotic and largely unpredictable • Innovation (use of inventions to create new products/services) is the driving force behind new demand • Entrepreneurs use innovations to destroy the structure of existing markets (“creative destruction”) • In free market economies, job creation, innovation, and economic growth are dominated by small firms • Depicts the market as dynamic “Anything genuinely new creates markets that nobody before even imagined.”--Drucker

11. Innovator’s Dilemma(Christensen) • One of the most consistent patterns in business is the failure of leading companies to stay on top • This is largely due to the belief in staying close to current customers (sustaining technologies) • This focus often prevents organizations from recognizing and exploiting radically new opportunities (disruptive technologies) • They look too small and different and take too long

12. Corporate Options to Thrive in a Fast-Paced Knowledge-Based Economy • Internal “skunkworks” • “Intrapreneurship” • Spinouts • Corporate venture capital (startups) • Teaming • Acquisitions • Sponsored university research • Licensing (government, university, small biz, inventors)

13. University Research & DevelopmentVirtuous Life Cycle Products/Processes for Consumers/Businesses Industry Funding Development Process Government Funding Research Proposal Scientific Discovery Patent University Funding Technology Transfer Attract faculty/students Publication Reputation License Typical University Research Process Royalties Commercialization Income & Wealth Taxes Jobs for Employees Profit for Owners Products/Processes for Consumers/Businesses

14. Technology Transfer Commercializing government/university research • Benefits to society/economy • Development of industrial capabilities • Development of economic base (jobs/taxes) • Royalties to fund future government research • Benefits to universities/government labs • Royalties to fund research/other activities • Justification for future government grants • Improved reputation (attract faculty, students & donors) • Benefits to industry partners • Access to world class facilities and talent • Ability to exploit research without upfront investment • Often includes eager customer Bayh-Dole Act of 1980 gave universities title to patents gained from federally-funded research & allowed exclusive licensing 700 Federal laboratories employ more than 100,000 scientists & engineers

15. Cooperative R&D Agreements(CRADA) • Contract between R&D organizations • University, government, industry • Cross-border • Shared objective • Shared resources • Shared ownership of intellectual property Because the government does not provide funding, acquisition regulations do not apply

16. Licensing Fundamentals • Intellectual Property • Patent required to validate ownership • Level of Exclusivity • Exclusive: single license • Co-exclusive: multiple but limited number • Term-based: exclusive for first X years • Field-of-use: only some uses/markets • Geographic: limited territory • Nonexclusive: anyone • Royalties • Compensate organization for supporting R&D • Compensate inventors for effort/initiative • MIT Licensing Office (2007) • 282 Patents Filed • 147 Patents Issued • 117 Licenses Issued • $68.8 M Gross Income 90% of research funding at U.S. universities is provided by the federal government

17. Learn More • Association of University Technology Managers www.autm.org • Federal Laboratory Consortium www.federallabs.org • National Business Incubator Association www.nbia.org

18. www.cstionline.org