Agenda

1. Agenda • Class schedule update & Presentation Forums (5’) • Commercialization Checklist (20’) • Team prep and updates: Commercialization Plan & Customer Value Proposition (30’) • Preparation and arrangements for Bill Newman Visit (5’) • Revenue and Cost Projection- Example (30’) • Team work time- Questions for Bill Newman, revenue and cost projections (30’)

2. Schedule Update • Only 7 more class meetings till presentations and competition!! • Teams meet with Bill Newman (NW Tech Ventures) next Wed, April 4th • Teams present at SWOT (Corvallis business leader forum) on Tue, April 24th • Commercialization plans judged by Portland Business Round Table panel on Wed, April 25th • Written commercialization plans due- Mon, April 30th • Top two commercialization teams present at AEP Signature event in Portland- Thu, May 3rd ($$$)

3. Technology Commercialization Checklist • Patent or IP selection • Understanding of IP scope, status, limitations • First Pass Market Survey • Commercialization optionbrainstorming • Product form and commercialization approach selection • Customer Value Proposition • Revenue, Staffing & Costs- Second Pass Market Survey • Startup Timeline • Cash Flow, Funding Needs, and Break even point • Funding Strategy • Next Steps and Outstanding Issues

4. Team Breakout Session • From your work to date, spend 10’ in your group preparing responses to these questions to the best of your ability (and be ready to defend your answers!). If you don’t know, explain follow up work or research you have planned to get the answers • The exact form of the product or service you will sell • Your exact position in the value chain and your competitors • Why your product or service is superior to your competitors • Your choice of a start-up and licensing approach and why • If multiple products are planned, which will be pursued first and why • Your exact customer profile (consumer or business) • Specify the problem solved that your customer will pay for • Estimate how much your customer will pay for this product or service and why • Each team gets 5’ to present their answers and respond to questions

5. Venture Capital Visit (Wed) • Bill Newman is a managing partner of NW Tech Ventures “ NTV’s charter is to provide early-stage funding, management assistance, and business development support for new companies.  NTV’s priority is to provide the early-stage capital to commercialize technology developed at Oregon’s public and private universities and research institutions - medical, public funded, and corporate.” “ NTV is a $14 million fund addressing the “capital gap” between conventional early-stage venture funds and research discoveries and technologies.  Our goal is to create and build businesses and commercialize the knowledge created in Oregon’s scientific and research institutions.  “

6. Preparations for Bill’s visit • Verify your assigned time for Bill. Meeting place is Weatherford Hall Library on 5th floor. Take elevator underneath the arch to 5th floor. • Please prepare a 150-200 word executive summary for Bill describing the technology, your market research completed so far and details on product form, commercialization option, and customer value proposition: • The exact form of the product or service you will sell • Your exact position in the value chain and your competitors • Your choice of a start-up and licensing approach and why • If multiple products are planned, which will be pursued first and why • Your exact customer profile (consumer or business) • Specify the problem solved that your customer will pay for • Estimate how much your customer will pay for this product or service and why • Also prepare specific questions for him about your next steps in developing your commercialization plan • Also bring additional work you’ve done from my feedback or recommendations of your mentors.

7. Bill Newman Discussions All discussions will be held in the Weatherford Library- 5th floor, access by elevator under the arch • 2:00-2:30 Photonic Funnel • 2:30-3:00 Novel Tablet • 3:00-3:30 Avian Flu Antibodies • 3:30-4:00 Printable Electronics • 4:00-4:30 BREAK • 4:30-5:00 Expander/Compressor

8. Next Step in Commercialization Plans: Estimating Revenue and Start Up Costs The following assumes the following information has been collected and decisions have been made on a) Overall commercialization approach, b) Market research and product positioning c) Product or service definition, and potential customer cost d) Position in the value chain- suppliers and customers are known

9. Revenue and Cost Projections Various financial tools are available for tracking costs for a start up. For simplicity, we suggest a cash flow model. A simple tool for this method is available from the Small Business Administration at http://www.sba.gov/library/cfbudget.xls To use this tool, you will need estimates on the following Step 1: Projected revenue vs time Step 2: Projected development and start up costs Step 3: Projected manufacturing costs vs time

10. Revenue/Sales Projections- Example • “Nano-reactor Systems” is a start-up company which plans to manufacture microchannel reactors for pharmaceutical applications. • Market research has shown that there are approximately 50 tools of similar function are purchased worldwide each year. • An analysis of the pharmaceutical companies costs, suggests that they would still realize a quick return on their investment if the reactors were priced at $800K to $1M each • Market research has shown that beneficial new tooling in this industry is adopted by these manufacturers, typically (Yr 1=10%, Yr 2=20%, Yr 3= 25%) • How would you generate a revenue projection from these data?

11. Development and Start Up Costs- Example • Nano-reactor Systems has developed a “bench top” microchannel reactor but needs lab space, additional staff, materials, and outside services to develop a prototype system to demonstrate to potential customers • Here are some of the detailed development costs to develop a prototype system in the first year • Materials- $500K • Operating supplies- $20K/mo • Wages: 2 development engineers@$75K/yr, CEO@$80K/yr • Rent/Utilities: $1000/month • Taxes, Insurance, Licenses: $5000/yr • Outside design services: $100K • In the latter part of the year, they must also begin a sales and advertising effort with the following costs • Travel- $20K • Wages: Salesperson@$60K/yr • What would the development and start-up costs look like over the year?

12. Manufacturing Costs- Example • Once orders are received, Nano-reactor Systems believes they can manufacture up to 3 reactors per year with their present staff for the following additional costs per reactor • Materials and components- $200K • Shipping and transportation- $15K • Machining and design services- $20K • Licenses- $15K • Operating supplies- $30K • In addition to the costs above, for each additional 3 reactors per year, Nano-reactor Systems must increase its staffing and space with the following additional costs • One additional manufacturing engineer@$70K • One manufacturing technician@ $40K/yr • From the revenue/sales projection, how would you calculate manufacturing costs for the first several years?

13. Team Work Session • Discuss with your team where you are on Tech Commercialization Checklist • Be realistic- make necessary decisions and complete research before moving to next steps • Complete any discussions on product definition or commercialization approach • Assign additional market research needed • In the remaining class time and out of class before Wednesday, please • Prepare summaries and questions for Bill Newman • Begin work on Revenue & Sales Projections