Presents:
Start Up Boot Camp
for University TTO Professionals
and Inventors
Session 3:
Creating a Solid Business Plan
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In Partnership With:
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Your Panel of Presenters
Moderator:
Gerard Eldering is Founder and President of InnovateTech Ventures, specializing in venture creation based on inventions
licensed from universities and research institutions. Since the company’s founding in 2007, InnovateTech has supported
numerous mid-Atlantic universities and co-founded three start-up companies including AlphaDetect and Trilumen. Gerard
has been working in the technology transfer community for more than a decade and is passionate about the creation of
professionally managed and funded start-up companies. Prior to launching InnovateTech, he founded and served as
Director of the Technology Transfer Office at The MITRE Corporation. He is an MBA and a registered patent agent.
Presenter:
Jim Chung is Director of the Office of Entrepreneurship at George Washington University, where he is responsible for
entrepreneurship programs and technology transfer. Previously, he was Director of the Mtech VentureAccelerator at the
University of Maryland, where he assisted faculty and students in launching start-up companies based on University of
Maryland technology. Before the University of Maryland, Chung was Director of New Business Development at the
Corporate Executive Board, where he helped establish the company's mergers and acquisitions capabilities, including the
acquisition of IT Toolbox. Prior to the Corporate Executive Board, Chung was vice president of Cherington Capital (now
Intervale Capital), a private equity firm investing in middle-market manufacturing and service businesses in the oil and gas
industry, where he helped execute the acquisition of Ulterra Drilling Technologies (formerly Rockbit International). Chung
spent five years prior to joining Cherington Capital in the venture capital industry, most recently at incTANK Ventures, an
early stage venture capital firm, where he served as managing director. He has experience leading or co-leading
investments into medical device, software, and information technology companies, including investments in AgaMatrix
Inc. and Nexaweb Technologies, Inc. Before entering the private sector, Chung was an academic researcher studying how
business, government and academia work together to create new innovation in high technology industries. He served as
a research fellow at several institutions during his 10-year academic career, including Harvard University, MIT and the
University of Tokyo.
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Your Panel of Presenters
Legal Team:
Charles Cella, Patent Attorney and Co-Founder of GTC, is a recognized thought leader and leading practitioner in the patent
and licensing fields. He provides patent strategy, licensing and technology-transaction services to a broad range of clients,
from industry-leading software companies to single-inventor start-ups. Prior to GTC, Charles founded and was CEO of
BountyQuest, an Internet marketplace for information relevant to the strength, validity or applicability of patents and for
which he recruited investments from Jeff Bezos and Tim O’Reilly, among others. Previously, Charles was the first patent
attorney at Foley Hoag LLP, where he grew the practice to twenty-five people and advised high-tech and biotech firms of all
sizes on building IP portfolios and negotiating technology transactions.
Paul E. Rauch, PhD, founder, Evan Law Group LLC, has prosecuted numerous patent applications in a broad spectrum of
technologies, including biotechnology, pharmaceuticals, polymers, materials, semiconductors, microfluidics, software,
business methods, electronics, telecommunications, manufacturing simulation and analysis, and consumer products. He was
a postdoctoral research associate at the Max-Planck Institute in Stuttgart, Germany, and at Harvard University. Dr. Rauch
counsels clients on maximizing the value of their intellectual property, including developing prosecution strategies and patent
portfolios, as well as preparing validity, infringement, and freedom to operate opinions directed to a variety of products and
devices, including pharmaceutical compounds covered by FDA “Orange Book” patents. He has counseled domestic and
foreign companies on freedom to manufacture, import and market their products in the United States. His biotechnology
practice includes cases involving the diagnosis and treatment of many different disease states, stem cell therapeutic reagents
and methods, pharmaceuticals, and drug delivery systems. Dr. Rauch has impressive experience in prosecution of patents,
including reexamination and appeals to the Board of Appeals and Interferences, often personally presenting cases directly to
patent examiners. Prior to founding Evan Law Group LLC, Dr. Rauch was a Partner at Sonnenschein Nath & Rosenthal, at
Brinks Hofer Gilson & Lione, as well as Oblon, Spivak, McClelland, Maier and Neustadt.
.
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Elements of a Business Plan
FIRST AND FOREMOST:
Audience (Potential Investors, Partners, Recruits)
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Business Plan is Written for an Audience
Tailor your business plan to the audience you are addressing
Put yourself in their shoes to figure out what they would want to know
They all have different priorities
Executive summary
Market-focused strategy
Technology/IP
Execution/ Team
Financial Risk and return
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Managing Risk and Return
Business Plan is about:
– Amount of planned investment / commitment
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Determination of risk
» Cost of determination
» Accuracy of determination
- Mitigate risk
Cost of mitigation
» Benefit of mitigation
– Maximize return
• Risk can come from many sources:
– Market, Team/Organization, Product/Technology, Regulatory, Financial
• Increasing returns can come from many sources:
– Revenue generation, cost reduction, economies of scale/scope, network effects
• Key is to identify risks and develop mitigation strategy
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Problem & Solution Statement
• Value Prop/Opp’ty
• Differentiation
– Problem
• How Big?
• Who’s the Customer?
• How Fast is the Opportunity
Growing?
– Solution
• How You Solve It?
• Necessary?
• Timing?
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Technology?
Business Model?
Relationships?
Price/Cost?
• Defensibility
– IP Protection?
– Team?
– First Mover Advantage
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Market Factors
• Market Opportunity
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Highlight the Opportunity
Go to market strategy
• Identify Market Risks
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Customers
Market Size, Growth Rate, Structure
Marketing Channels
Current Competitors
Potential Competitors
Sales Cycle
Regulatory
• Explain Market Risk Mitigation
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Identify and Segment Customers for Value Proposition
Provide Market Sizing and Growth Rationale
Provide Competitive Landscape
Market Entry Strategy
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Technology/Product Factors
• Highlight the Opportunity
• Identify Risks
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Stage of Development
Cost
Materials
Design
 Timelines
 Technology
 Suppliers
 Standards
• Explain Mitigation
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Cost Analysis
Technology Development
• Prototypes
• Proofs of Concept
Secure Supply Chain
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Intellectual Property
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IP value and risk factors
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Competition Risk
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Scope of patent protection – patentability
Timing of patent issuance relative to sales and marketing
Mitigation of Competition Risk
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Protecting the market
Protecting the technology
Protecting the products
More patents (develop a portfolio)
Foreign application filings
Timing of foreign application filings (Paris Convention and PCT applications)
Expedited examination (Patent Prosecution Highway)
Freedom-to-Operate Opinion- Not appropriate for business plans
Too expensive
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FTO search (about $10,000) – discover patents
FTO analysis of each patent ($30,000-$100,000 each)
Lack of accuracy
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New patents may issue
Changes in product design or business strategy, selection of markets
Alternatives
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Develop patent portfolio (“picket fence strategy”) - $10,000 - $20,000 each U.S. patent
Business insurance
Avoid “willful” infringement (opinion of counsel)
Licensing
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Execution/Team
• Highlight Strengths
– Core competencies match strategy
• Identify Risks
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Management Capabilities
Ability to Work Together
Ability to Learn
Shared Vision
Breadth and Depth
• Explain Mitigation Strategy
– Experience
• Management
• Advisory
• History
• Recruitment/Team Building
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Financial
• Highlight Opportunity
• Identify Risks
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Amount Required
Key Assumptions
Availability
Growth/Cost Forecasting
Expected ROI
Comparables
Exit Options
• Explain Mitigation
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Thorough and Realistic understanding of requirements and potential returns
Right Sources of Funding
Exit Strategy
• Pro Forma Financials
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3-5 years
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Mistakes to Avoid
• Technology looking for a solution
• Assumed market share
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Top-down assumptions versus bottom-up validation
Lack of customer understanding
“Nice to have” versus “Need to have” solutions
“We have no competition”
No clear revenue model or path to profitability
Incomplete team
No metrics to measure progress
Lack of focus
Failure to address risks head-on
Balance cost of risk determination with level of investment and time to
market
– Don’t be pressured into expensive risk determination - accuracy or
value of analysis must justify cost
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Q&A
Utilize the chat box to the bottom left of your
screen to submit a question to the panel. Please
address your question to a specific presenter.
Or
Press * 1 on your touchtone phone and this will
place you into the phone queue.
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Introduction to Session Four
(June 24, 2010)
Funding Options and Opportunities
• Attracting and seeking out the right investors
• Identifying what type of funding you need and
when
• Structuring the investment
• Investor turn-ons and turn-offs
• Common terms and pitfalls to avoid
• Current investment landscape and 2011 forecast
• And more…
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