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A Venture Capitalist’s View of IP Assets

A Venture Capitalist’s View of IP Assets. META Group - Ing. Luigi Amati 12 July 2006. Finance for Innovation Investor needs IP Assets: a strategic leverage Challenges. R&D: Risks and Financial needs. Risk Level. R&D: Risks and Financial needs.

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A Venture Capitalist’s View of IP Assets

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  1. A Venture Capitalist’s View of IP Assets META Group - Ing. Luigi Amati 12 July 2006

  2. Finance for Innovation • Investor needs • IP Assets: a strategic leverage • Challenges

  3. R&D: Risks and Financial needs Risk Level

  4. R&D: Risks and Financial needs

  5. Traditional Financial tools Vs Innovative companies • Innovative Companies: • do not have out a sound track record • need years before generating a positive cash flow (no self-financing) • their Business activity not understandable • could not provide guarantees • require a small amount of money INNOVATIVE COMPANIES ARE NOT APPEALING FOR BANKS!

  6. VENTURE CAPITAL Capital ($) Needs Company Growth EXPANSION FINANCING FIRST STAGE FINANCING Finance for Innovation, BA START-UP FINANCING SEED FINANCING EARLY STAGE FINANCING PRE-SEED FINANCING Time The financial gap EQUTY GAP

  7. Knowledge based companies needs money 3 Fs are not enough! (Fools, Family, Friends)

  8. New Financial tools Vs Innovative companies • Seed funds • BAs • VCs

  9. …But what are investors looking for? • Balanced & committed Management Team • High growth potentials • Sustainable Business Model • Suitable strategies: with deliverable goals • A clear way out strategy …

  10. …But what are investors looking for? … defendable products!

  11. IP as added value, Why? • Legally protected • Able to create income • Competitive Advantage • Can be evaluated • Can reduce “valley of death” time and size

  12. IP & Investor needs Investors have the following concerns: • freedom to operate PA report • possibility for an international coverage • clear ownership status facilitating a well established exploitation strategy • barriers to entry

  13. Case Studies: the IP diligence in the assessment process

  14. Case A: Patent owned by the company (and not the inventor) World patent Protection of both Product and Process Various fields of applications Project independent by original research team (testing phase) But … Agreement with inventor? Research project consortium agreement? Good patent, unclear situation

  15. Case B: 2 Patents owned by the company Still PCT process, Patenting process supported by Patent Attorney from the beginning Various fields of applications But … Similar technologies covered by patents on the market EPO expert written opinion, 1 positive and 1 with claims Project dependent by original research team clear situation, good patents?

  16. Case C: No Patents owned by the company Patentable technology? Still in the head of researchers, afraid of disclosing information Solid team Guiding milestones towards IP defendability Freedom to operate But … Alternative technologies covered by patents on the market unclear situation, no patent … potentially good deal and great market potential !!!

  17. Some ideas: IPR is a strategic leverage, at least to start the discussion Team, market and business model are also essential Innovation finance vs ipr market is just starting in Italy, therefore … Watch out “self made” IPR and look for professional fund managers

  18. Grazie! Ing. Luigi Amati Meta Group www-meta-group.com

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