From Science to Business: New ISTC Commercialization Support Services

1. From Science to Business: New ISTC Commercialization Support Services Laura Schmidt Williams Deputy Executive Director for Partnering & Sustainability ISTC For Official Use Only

2. New ISTC Commercialization Services • Focused on supporting long-term sustainability for former Soviet weapons scientists. • Commercialization Initiatives and Lessons Learned • Other ISTC Commercialization Services: • Advanced Matchmaking • Pre-Commercialization Support • IPR Asset Inventory and Analysis For Official Use Only

3. Commercialization Initiatives (CIs) • Commercialization Support Program goals: • Bring marketable, revenue-producing hi-tech goods/services in advanced stages of development from former defense institutes to the market • Support technology transfer that brings revenue to former defense institutes • Create sustainable jobs for former defense experts • Funded by Parties and government Partners. Co-funding can be provided by outside investors, including host government agencies and private companies. • 13 CIs funded to date (2 completed, 11 underway) For Official Use Only

4. Terms of Support • The program positions itself in early phase of hi-tech commercialization process as a risk-sharing mechanism to support mature civilian technologies from former defense experts to the point where investors, commercial partners, etc. become involved. • ISTC exits when a technology becomes profitable or the CI becomes financially self-sustainable. • ISTC takes no profits, royalties, equities. • ISTC takes no part in beneficiary’s business decision-making process, but can advise if requested, under appropriate legal protections. For Official Use Only

5. Types of Support • Available only for ISTC beneficiaries within our mandate (former military scientists & experts). • Support can include: • Capital equipment and materials • Infrastructure upgrades • 3rd party services (consulting, marketing, advertising) • Training, travel for networking purposes. • No-interest payback provisions for capital equipment when agreed conditions are reached. For Official Use Only

6. Lessons Learned from CIs at ISTC • Initial delays caused by lack of CI procedures, lack of staff experience & understanding re implementation. • ISTC staff lacked commercialization/business skills. Needed to hire outside experts and Russian consultants. • Significant challenges with CI implementation: sustained ISTC project management attention throughout the CI is critical. • Providing the funds is not enough! • Delays resulted until PPMs were assigned to manage CIs, similar to projects. • ComSP staff and consultants provide advise/support during implementation. • Good internal communication critical. (Don’t hide the problems.) For Official Use Only

7. More Lessons Learned • Preparing and approving a CI is lengthy and difficult. Delays create business risks—working to streamline our process. • ISTC only develops CIs we believe are likely to receive funding. • Once approved, CI implementation usually takes longer than expected—most CIs receive no-cost extensions. • Workplace creation also takes longer than expected. • Many delays caused by procurement issues (no workplan for early CIs, procurement staff not consulted). • Some delays caused by creation of start-ups, spin-offs (often first step in implementing a CI, so this delays the entire CI). • These delays can cause the CI to lose customers/investors, causing the CI to fail! For Official Use Only

8. Still More Lessons Learned • Need to manage CI implementation similar to projects—develop workplans; involve finance, procurement staff early and adhere to all ISTC procedures. • Importance of proactive and committed institute management—without this, CIs cannot succeed. • Institute management changes lead to CI delays/revisions • HGC not required for many CIs, but lack of HGC can lead to delays/problems. • Easier to implement CIs at sites with easy access. • How to monitor success after CI completion? For Official Use Only

9. Advanced Matchmaking (AMM): What Is It? • Traditional matchmaking often focuses on identifying a good “match” between CIS institute and international Partner, then facilitating the introduction—taking the first step. • AMM is designed to: • 1.Bring together participants in a possible commercial deal (ISTC beneficiary and commercial partner, customer, investor, etc.), and • 2. Provide “hands-on” business development support to the ISTC beneficiary until the deal is reached. For Official Use Only

10. AMM Support • Support can include: • Travel to meet potential partners, attend conferences and trade fairs • Business and legal consulting support • Support in preparing targeted business-attractive presentations • Help developing mini-business plans, limited market surveys, business models, etc. • No grants or equipment provided to scientists, no site access, no host government concurrence required. For Official Use Only

11. Pre-Commercialization Support • Modest support that strengthens the business case and business capabilities of ISTC beneficiary institutes. • Ex. Market research, biz planning, biz/legal consulting, travel support for customer search, training, etc. • No scientist grants or equipment provided, no site access required. • Therefore, no host govt. concurrence is required. • Services range from very small ($1-2K for travel) to rare cases of up to $100K (w/legal consulting and several-stage biz planning and development work.) For Official Use Only

12. IPR Asset Inventory and Analysis (IPRA) • By Russian law, all state-owned research institutes must perform an IPR asset inventory. • Many institutes unclear how to do this. • ISTC can help. • IPRA is a key input to development of commercialization priorities and an institute sustainability plan. For Official Use Only

13. Goals of IPRA • Assist ISTC beneficiaries to address the following: • Which IPR is most valuable, should it be protected and how? • Does institute have all IPR needed for success (incl. background & foreground, an IPR “portfolio”)? • What legal/contractual limitations may hinder success? • How to develop a sustainability strategy that helps the institute prioritize its human and asset capital to exploit most valuable IPR for maximum return? • How to develop expertise and procedures to empower institutes to perform their own IPR asset inventories? • Provide coaching and training so institutes can develop their own IPR asset inventory processes and expertise For Official Use Only

14. Integration w/other ISTC Activities • IPRA can find and develop potentially commercializable projects & business models for follow up through: • Regular or Partner projects • Advanced Matchmaking • Commercialization Initiatives or other commercial deals • Patent Support Program • Technology Promotion Program • ISTC preparing to run a test case of this new service at three selected institutes. For Official Use Only

15. Contact Information for Sustainability Programs at ISTC • Deputy Executive Director for Partnering & Sustainability Laura Schmidt Williams • Telephone 8-495-982-3111 • Email Williams@istc.ru • Competency Building Program Manager Mikhail Korotkov • Telephone 8-495-982-3234 • Email Korotkov@istc.ru • ComSP Group Manager Tim Murray • Telephone 8-495-982-3163 • Email Murray@istc.ru For Official Use Only