The document discusses technology commercialization and provides an overview of the commercialization process. It defines technology commercialization as bringing technology to the marketplace. It then outlines the typical stages of commercialization including technology development, evaluating commercial potential, protecting intellectual property, developing business plans, securing funding, and growing the business. The main commercialization paths of licensing and starting a new business are also summarized. Examples of commercialization cases are provided to illustrate real-world situations.

1. Medical Entrepreneurship Rami Katz, MBA & Attorney (IL) Director of Tech Commercialization High Tech Rochester Commercializing Medical Innovations

2. Discussion Outline Tech Comm. defined Technology Development TC Models TC – Main Paths Licensing Business Start Some Examples Final Thoughts

3. Discussion Outline Tech Comm. defined Technology Development TC Models TC – Main Paths Licensing Business Start Some Examples Final Thoughts

4. What is Tech Commercialization? Bringing technology to the marketplace What is Technology? The practical application of knowledge especially in a particular area (merriam-webster diictionary) Discoveries and inventions Patents, Copyrights, Trade-Secrets, know-how, Trademarks Rule of thumb – “Can it fail?”

5. What is Tech Commercialization? A few examples… Big Corporation University Tech Inventor / Spin-out Room for thought: Is the iPod Technology Commercialization?

6. Discussion Outline Tech Comm. defined Technology Development TC Models TC – Main Paths Licensing Business Start Some Examples Final Thoughts

7. Sources of Technology Universities Corporate R&D centers Government National research labs Agencies – NASA, NIH, NSF Inventors, small businesses, etc.

8. Commercialization Lead Time Jet Engine Whittle patent 1930…test flight 1941 Microwave Oven Spencer melts candy bar 1945…1967 home Plasma TV Technical principles described in 1936

9. TRL Definitions

10. What makes a good opportunity? The Opportunity Continuum ? ?  Invention  ? ? Business Model   ? Customer Acceptance   ? Technical Feasibility Opportunity Innovation Idea

11. TC Opportunity Drivers Regulatory change – Telecom, lead free, the Healthcare bill (?) Reconstruction of value chain or channels – Outsourcing, Staples Proprietary or contractual advantage – IP, Coke vs. Pepsi 10X change in <10 years – Internet

12. Discussion Outline Tech Comm. defined Technology Development TC Models TC – Main Paths Licensing Business Start Some Examples

13. Commercialization: HTR & Excell Small Scale Mnfg Execute on Bus. Plan Support Mng Dev. Round A Funding Opp. Analysis Comm. potential? Market Need? Addressable? Sustainable? Protectable? Profitable? Pre-Seed Funding Research Invention Disclosures Patents Analyze Opportunity Validate Market Develop Bus. Plan Investor Presentation Commercial Prototype Conduct Beta Testing Find Qualified Mng’t Launch Company Dev. Marketing & Sales Strategy Seed Funding Large Scale Manufacturing Develop New Products & Services Support Management Development Develop Growth Strategies Support Network Development Expansion Funding HUMAN CAPITAL RESOURCE H T R FINANCIAL CAPITAL RESOURCE EXCELL UNIVERSITY TECHNOLOGY TRANSFER STRATEGIC INVESTORS PRIVATE EQUITY VENTURE CAPITAL T C T EXIT CONCEPT FORMATION GROWTH CONSULTING INTERIM MANAGEMENT PRE-SEED SEED EARLY STAGE EXPANSION STAGE

14. Stage 3 Development Stage I Investigation Stage 2 Feasibility Stage 4 Introduction Stage 5 Growth Stage 6 Maturity Engineering Prototype Technical Analysis Technical Feasibility Pre-production Prototype Production Support Strategic Market plan Market need Assessment Market Validation Sales & Distribution Market Diversification Strategic B/plan Venture Assessment Economic Feasibility Business Start-up Business Growth Business Maturity Technical Marketing Business Market Study Production COMMERCIALIZATION MODEL Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Step 11 Step 12 Step 13 Step 14 Step 15 Step 16 Step 17 Step 18

15. Stage 3 Development Stage I Investigation Stage 2 Feasibility Stage 4 Introduction Stage 5 Growth Stage 6 Maturity Engineering Prototype Technical Analysis Product new, unique & technically feasible? Technical Feasibility Pre-production Prototype Production Support Strategic Market Plan MKT Need Assessment Market Validation Sales & Distribution Market Diversification Strategic Business Plan Venture Assessment Economic Feasibility Business Start-up Business Growth Business Maturity Technical Marketing Business Market Study Production Key Go / No-Go Questions Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Step 11 Step 12 Step 13 Step 14 Step 15 Step 16 Step 17 Step 18 Working model? Total production costs? First article prototype? Limited production? Performance test? Production dependable, Reliable & optimized? Supporting & Improving product? Meet clear market demand or problem? Who will buy, how many & what price ? Profiled & finalized target market? Sales? Growing market share? Identified next Generation product ? Product or venture make a profit? Generate return on investment? Finalized business model, identified total capital need & source ? Management team & business systems operational ? Business plan on course to achieve objectives? Maximizing return On investment ?

16. Discussion Outline Tech Comm. defined Technology Development TC Models TC – Main Paths Licensing Business Start Some Examples

17. Commercialization Paths Licensing Business Start Hybrids: Joint Ventures Virtual firm / R&D Center

18. Discussion Outline Tech Comm. defined Technology Development TC Models TC – Main Paths Licensing Business Start Some Examples Final Thoughts

19. TC: Licensing Granting the right to use Intellectual Property (IP) Most common - Patents Additional: Copyrights- software Trade-secrets– Manufacturing, processes Options… Main Source: Universities

20. Licensing – key issues Exclusive vs. Non-Exclusive Limitations- Geography Industry / application Time Compensation- Up-front cash (patent maintenance fees +) Equity Royalty (typically 2% - 5%) Milestone payments

21. Patents from Universities Patent Applications Since 2001 (AUTM Survey 2006) University and Research Institutions account for about 60% of patents AUTM – University Technology Managers- www.autm.org

22. Licensing by licensee and type Licenses: By Licensee ( 2006 AUTM Survey) Licenses Executed: Exclusive vs. Nonexclusive (2006 AUTM Survey)

23. A clock for keeping animal time* Patent number : 5023850 Filing date : Jul 9, 1990 Issue date : Jun 11, 1991 Inventors : Rodney H. Metts, Barry D. Thomas Patents Gone Bad– or why a patent is not enough * Josh Lerner – “Our Broken Patent System”

24. UR Royalty Distribution 25% IP Pool 25% IP Pool 20% IP Pool 20% School or College 15% School or College 10% School or College 20% Department 20% Department 20% Department 35% Inventors 40% Inventors 50% Inventors $250,001 and above $50,001 to $250,000 $1 to $50,000

25. Discussion Outline Tech Comm. defined Technology Development TC Models TC – Main Paths Licensing Business Start Some Examples Final Thoughts

26. HTR’s Tech Comm. Model Community TC Partners HTR – lead, Partners: UR, RIT Tech Farm Infotonics See handout

27. Tech Commercialization Process

28. Venture Development – Concept Stage ??? Average Valuation Grants Funding Sources 1-10 years Time to Achieve Milestones ~ $1-10M Funding Requirements ??? Probability of Significant Liquidity None Customer & Sales Milestones Inventor? Management Team Milestones None Business Development Milestones Invention disclosure Patent Status Research Technology Milestones

29. Venture Development – Pre-Seed <$750K Average Valuation Grants, F 3 , Angels, SBIR I Funding Sources 1-3 months Time to Achieve Milestones $0-$50K Funding Requirements 1% Probability of Significant Liquidity none Customer & Sales Milestones Inventor + coach Management Team Milestones Quick Screen / Market Opp. Asses. Business Dev. Milestones OTT/Legal Dept. processing, Patent Status Pre-molecule – r& D Tech Milestone - Life Science Pre-prototype - r& D Tech Milestone - Physical Science

30. Venture Development – Seed Stage $1M-$2M Average Valuation Angel & Seed Investors, SBIR Strategic Partners Funding Sources 1 – 3.5 Years Time to Achieve Milestones $250-$1MM Funding Requirements 1% - 12% Probability of Significant Liquidity Bio- Initial JV  LOI  pre-sales Customer & Sales Milestones CTO + 1-2 Manager/coach Management Team Milestones Bus. Plan, looking for JVs Business Dev. Milestones Provisional  Pending  Issued Patent Status Molecule  Animal trials Tech Milestone Life Science Lab  Alpha  Beta Tech Milestone Physical Science

31. Venture Dev. – Early-Stage / A round $4M-$6M Average Valuation Angels, VC, STR Partners, SBIR II Funding Sources 9-18 months Time to Achieve Milestones $1-4M Funding Requirements 15%-25% Probability of Significant Liquidity paying customers Customer & Sales Milestones >3 &quot;real&quot; managers Management Team Milestones Customers, sales & shipments Business Dev. Milestones Patent Extension Patent Status Pre-clinical trials Tech Milestone Life Science commercial prototype, first production Tech Milestone Physical Science

32. Discussion Outline Tech Comm. defined Technology Development TC Models TC – Main Paths Licensing Business Start Some Examples Final Thoughts

33. Case Studies Real situations Licensing: PharmaNova Business Start: Lumetrics Hybrids: New Scale Technologies DIffinity Genomics

34. Discussion Outline Tech Comm. defined Technology Development TC Models TC – Main Paths Licensing Business Start Some Examples Final thoughts

35. TC - The Business Perspective The 3 legs of the TC stool: Technology Market Team Balanced Progress Technology Intellectual Property Protection Business Development Management Team Market, Customer, & Sales Golden Rule: “Fail fast – Fail cheap”

36. Industry & Market – value proposition Chart & understand the value chain Find where your solution fits in Rule of thumb: Each step requires ~100% mark-up! $1 $2 $4 $8

37. Funding Tech Comm. Source: Kauffman - Encouraging Industry-University Partnerships

38. Questions? Rami Katz Director of Technology Commercialization Rami.katz@htr.org, (585) 214-0596 High Tech Rochester www.htr.org