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Creating Wealth from Innovation

Creating Wealth from Innovation. What are the Odds?. Higher Education –Business and Community Interaction Survey Figure 4 Selected HE-BCI income streams 2003-2008 (real terms ) Source: HE-BCI 2003-2007 Part B Tables 1b, 2, 3 and 4c.

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Creating Wealth from Innovation

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  1. Creating Wealth from Innovation

  2. What are the Odds?

  3. Higher Education –Business and Community Interaction SurveyFigure 4 Selected HE-BCI income streams 2003-2008 (real terms)Source: HE-BCI 2003-2007 Part B Tables 1b, 2, 3 and 4c

  4. “Over the last ten years, we have entered into long-term agreements with ten of the UK’s leading universities with a combined research income of over £1 billion” Alan Aubrey CEO

  5. Even ‘professional’ investors make poor returns on early stage businesses

  6. Stop Beating Ourselves Up?

  7. Creating Wealth from Innovation

  8. Early Successes

  9. Courtesy of Rolls-Royce Strategic Research Centre 9

  10. Oil Sands Extraction Systems The Big Motor Manufacturers Wire Manufacturers Ultra Deep Oil Extraction Emergency Smoke Extraction Motors Variable Speed Drives Application Development

  11. “The Teesside University – Shadowboxer project has demonstrated how carefully coordinated academic and commercial interests can align to significantly benefit society at large. We hope to work in a similarly constructive and socially responsible way with our own leading Universities at home in Australia.” Former Australian Prime Minister, Bob Hawke

  12. What’s Different?

  13. Traditional Approach 1 in 160,000 chance of financial success Ref: High Tech Start Up. John L. Nesheim ISBN 0-684-87170-X

  14. At this point we’re making money + + Approach • Benefits…. • Research at good commercial rates • Zero wastage of research effort • Independence from over-subscribed grant funding • The opportunity to get leveraged value… Royalties and Equity • Enhanced reputation to attract high quality academics and students • More productive engagement with the business community… for research, consulting and training

  15. University University University University University Shared Service The Ventures Partners, Markets Clients and Consumers Sales & Marketing Project Management & Supply Chain Fund Raising & Equity Management Admin, Legal IP Management Accountancy… et al R & D

  16. Big Impact Big Profits Big Company Executive (Proven Smaller Company Entrepreneurs) A Researcher B Scientist (Middle Management, SME’s)

  17. Networked with Decision Makers Respected in Industry High Impact Deal Experience Done it Before

  18. The Process • Workshop • One to One assessment sessions • Objective review of the University’s potential • Umbrella agreement • Pump Prime Funding • Outline Interim Agreement • Sign up individual Interim Agreements • Identify and close start-up deals • Form company • Create more projects and profits… Maximise equity value • ‘Tax’ revenues to self fund the portfolio • Exit individual ventures for Capital Gains or Trade with Profits

  19. Interim Agreement • To allow us to work out how to make it a commercial success. • 3 equal votes University, Academic Lead, Business Lead • Business development costs taken out of margin • IP granted to the venture • Shareholding… 45 – CE / 55 – Academic and University

  20. Key Points of Differentiation • Consortium – Shared Service • High Skilled and Networked Business People. • Incentives aligned on OUTPUT measures and the interests of the inventors and universities. • Self funding, apart from an initial pump prime of cash from the University. • It is a non-exclusive arrangement, in addition to existing or future independent initiatives or relationships with other external bodies. • It brings new, untapped opportunities to the University and academics that would not otherwise be seen. • It can also be used to improve existing relationships and increase financial returns. • It incurs no risk on the part of the universities and is legally independent from the participating universities.

  21. www.tcei.co.uk Andy Todd andy.todd@tcei.co.uk Telephone: +44 (0)7785 394220

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