Agenda

1. Agenda • Presentations- expectations and content (20’) • Work breakdown- class by class (10’) • Sample financial analysis and presentation- Superior Agrifuels (10’) • Small business funding sources (20’) • Team cash flow updates (60’)

2. Presentations • SWOT Meeting- Tues, April 24th • Portland Business Round Table- Wed, April 25th • “Toward 2020” AEP Event- Thu, May 3rd (top two teams only)

3. Expectations of Presentation and Final Report • For SWOT, Portland BRT, and AEP events please prepare formal business presentations • Formal business attire recommended! Bring a resume if you have one (just in case). • Plan for 10-12 minute presentation and ~8 minutes of questions. AEP event will be 8 minutes total • Presentations will be scored on 1) Quality and completeness of the commercialization analysis and recommendations 2) Appropriateness of commercialization approach for the technology 3) Content and clarity of the presentation 4) Compelling nature of your business case

4. Some suggestions • Use your mentors as a resource!- they have started up numerous companies and released countless products. Several have not been contacted and are willing to help. • Divide up the work! Break down research, interviews, and preparation of report and presentation into smaller pieces. • Use available class work time! Review your progress and decide what needs to be done next.

5. Mentor Contact Info • Dan Whitaker 760-6533 • Todd Miller 713-1341 • Ray Dandeneau 760-3981, 745-3970

6. Presentation and Written Commercialization Plan- Spin Off • Executive Summary • Technology- description, problem solved, status • Recommendation to form spin-off- reasons this is best approach • Company Overview- name, strategy, objectives • Product and Services Description- form, customers, position in value chain, reasons your offering is superior to competitors, pricing • Marketing and Sales- market size, growth, competitors, customer profile, product positioning, current interested parties and collaborators • Staffing Needs for first few years- personnel, skills, background • Development and Manufacturing Ramp Plans- development and ramp costs & timeline • Financials- Cash flow for first several years, breakeven point, funding needs and proposal • Issues, Solutions, and Next Steps – potential “show-stoppers” and suggested solutions, important milestones

7. Presentation and Written Commercialization Plan- Licensing • Executive Summary • Technology- description, problem solved, status (mention any current licensing activity but do not name the company) • Recommendation to license- reasons this is best approach • License description- exactly what you will license, scope, field of use • Potential license terms- recommend exclusive or non- exclusive, for cash, deferred payment, or equity stake, reasons for suggesting this approach • Potential Licensing companies- company profile and size, reasons for choosing these characteristics, specific companies to approach • Licensing status, schedule, and potential plans- additional development work needed, timeline, mechanism for information transfer, ongoing involvement of inventors • Financials- cash flow for licensing company, startup and recurring costs, estimated breakeven point • Issues, solutions, and long term plans- potential “show-stoppers” and suggested solutions, license lifetime, technologies or IP which may obsolete the license

8. Reading Assignments for Wed- Preparing your commercialization plans • Review “An Oregon Researcher’s Guide to Commercializing a Technology or Starting a New Business”, (including Appendices). In particular, the Idea Resume in Appendix 2 is a good high level summary of what your commercialization plan should containhttp://corvallisedp.com/drupal/files/StartUpGuideSWOT.pdf • Read Marketing Survey Checklist (from Ryan Kirkpatrick). This is an excellent list of questions you should be able to answer after performing your analysis and research. • Review the final presentation and financials from the Superior Agrifuels project last year. Note: All four documents can be accessed from links at the end of the class syllabus

9. Week-by-week Schedule Week of April 9 • Complete cash flow projection • Complete schedule planning and checkpoints • Recommend funding amounts, sources, and deliverables associated with these funds • MEET WITH MENTORS: get their input on finances, schedule, and funding. Invite them to SWOT presentation. • TALK WITH INVENTORS: Describe your general plan and get their input TALK TO ME: Sign up for a 45 minute time slot for Tuesday, April 17 ( between 1-6 pm)

10. Week-by-week Schedule (continued) Week of April 16 • Prepare your slide set with details of your commercialization plan, including any modifications from mentors and inventors • PROVIDE A DRAFT COPY to Mary Foley of Tech Transfer office by Thursday, April 19th • PROVIDE A DRAFT COPY to inventors by Thursday, April 19th • Choose a presenter from your group for each section of presentation and practice, practice, practice.

11. Week-by-week Schedule (continued) Week of April 23 • Mon (4/23) Practice & “fine tune” presentations in class • Tues (4/24) 3:00-4:30 pm SWOT Meeting • Wed (4/25) 6:00-8:00 pm Portland BRT meeting

12. Ongoing Growth “Private Equity” R&D Gov’t, Industry - discovery Formation Angel Institutional Public Markets • The “3 F’s” (friends, family, & fools) • - “just the basics” • Venture Capital funds • - Home run mentality • - Significant investment $$; governance and oversight • - 2003: 915 funds, $18.2 billon invested, 2,700 deals • Angel Investors • - “early and often” • - Individuals, unorganized, limited follow-on • - 2003: $18.1 billion invested, 42,000 deals Don’t overlook non-equity capital - Grants (SBIR, STTR), foundations, other? - Customer NRE - Strategic relationships (access, credibility, risk reduction / loss of freedom, …) Capital Sources for Formation and Growth

13. Sources of Non-equity Capital: SBIR and STTR • The Small Business Innovative Research Grants (SBIR) and Small Business Technology Transfer (STTR) can be good sources of start up funds • SBIR created in 1982 and renewed at least until 2008 • Requires 2.5% of all “extra-mural” research funds must be set aside for small business development ($2B in 2005) • Many government agencies participate: DOD, NIH, NASA, DOE, NSF, DOC, DoAg, EPA, DOE, DOT, HSArpa. Each agency has structured their program differently • There are some differences in SBIR and STTR with respect to required partnerships and percentage of total funds allocated • This a grant, NOT a loan. The small business is not required to repay. Also, the company can allocate up to 7% of the grant to profit.

14. SBIR/STTR Funding • Structured around a 3 phase process • Phase 1- feasibility ($50K-$100K, 6 mo) • Phase 2- prototype ($500K-$750K, 2 yr) • Phase 3- commercialization (not funded by government directly) • Can be either a grant or contract • Grant- no expectation of a product that funding agency will buy • Contract- expectation that in Phase 3 that agency will be a customer

15. SBIR/STTR Funding • Success rates vary among agencies • NIH: Funds 1 out of 3 proposals • NSF: Funds 1 out of 13 proposals • 41% of SBIR awardees are 2-9 employees • 33% of SBIR awardees are new • More information is available at the website: http://www.sbirworld.com, and is also posted on our class website accessible through the syllabus

16. Senate Bill 853 • The State of Oregon passed a bill in 2005 for the purpose of “facilitating the commercialization of university R&D” • This fund is to provide • Capital for university entrepreneurial programs • Opportunities for students to gain experience in applying research to commercial activities • Proof-of-concept funding • Entrepreneurial opportunities for those wishing to convert research into commercial enterprises • It will be funded by credits applied to state income taxes on a voluntary basis- implementation details are still being worked out • OSU, UO, and OHSU have expressed interest in participating • This could be a source of spin-off funding as early as this year