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Presentation5 Presentation Transcript

  • 1. IT 01203
    Technopreneurship
    yuszren@gmail.com
  • 2. Technology Description (format)-1 week
    Focus on your core technology
    What makes your product or services work.
    Key components needed
    specialized knowledge (experience and skills involved and regulations that may govern the use of the technology to deliver the product/service)
    R&D plan in the near future/trend (how, how much?)
  • 3. Current trends of IT in 2009
    Malaysian RMK-9
    (refer on my take of What’s Hot 2009)
    1.Information Security
    2.E-Commerce
    3.E-Learning
    4. Development of Application & Content
    5.Open Source
  • 4. De-mystifying tools/technology/software you are using
    True that some are reliable/superior than others
    What matters is the real execution of the task
    Basically – if it works for you than use it. Ruby on Rails
  • 5. Software architecture
  • 6. Tire swing analogy on application development
  • 7.
  • 8. Application Architecture
    is commonly used for the internal structure of an application, for its software modularization.
    Applications Architecture is the science and art of ensuring the suite of applications being used by an organization to create the composite application is scalable, reliable, available and manageable.
  • 9. One not only needs to understand and manage the dynamics of the functionalities the composite application is implementing but also help formulate the deployment strategy and keep an eye out for technological risks that could jeopardize the growth and/or operations of the organization.
  • 10.
  • 11. Front-end- the interface, the all things are nice and beautiful
    Back-end-database, application, the ugly side, complex
  • 12. Technology Valuation Analysis
    What will be the value of your technopreneurship.
    The fruits of your labor are for :
    consumption of the society at large
    will need to be committed to 3rd parties in some form or other usually through
    some kind of technology licensing arrangements via
    partnerships,teaming arrangements or outright sales and purchase.
  • 13. Types of Licensed Rights in Technology
    Business Transactions – outright sales and assignments
    Product Licensing - duplication the making of some device, system or service that has already been completed and proven by the seller.
    Technology Rights -is used to designate transactions for pre-commercial designs and data
  • 14. Sellers and Buyers in Technology Licensing Transactions – TRADE
    The license is the contract between the Seller and Buyer – this conveys technology rights from the seller to the buyer
    4 Distinct Aspects
    TR – Technology Rights
    R – Risk involved in the transaction
    A – Art of DealMaking
    DE – Deal Economics
  • 15. What Accompanies The Deal
    Separate purchase agreements
    Employee agreements
    Services/consulting agreement
    Supply agreement -Non-disclosure agreement
    Equity Participation – could have incorporation and shareholder issues
  • 16. Technology Rights come in 3 forms of IP
    (i)Patents (ii)Trade Secrets (iii) Copyrights
    Major Areas of Uncertainty:
    Assumption of IP protection
    Strength and breadth is uncertain
    Interpretation of claim language
    Validity of patent
    Different countries interpretation
    How secret is trade secret
    Risk of disclosure precludes protection
    IP protection is necessary but insufficient condition for value
  • 17. Why is Technology Licensing Important
    What is R & D money buying, how do you justify the investment ?
    How about return to shareholders?
    Substantial portions of R&D has to be used thru partnership, teaming, merger, acquisitions and other relationships
    Involves technology being licensed, transferred, committed to 3rd party
    Product of R&D ==== Patent data in US in 2001 350K patents submitted, 170K granted
  • 18. Technology Licensing Issues - 1
    Basic Principle in Technology Valuation - Forecast the future value of operating profits and cashflow.
    When there is a history of sales , costs, and profitability the future becomes more predictable.
    Is the past a harbinger of the future
    forecast the future value of operating profits/cashflows
    due diligence – confirm historic data , test hypothesis
    Absence of data prevents the rigid mindset that the future can be determined by the past
  • 19. Technology Licensing Issues - 2
    your track record is in front of you
    forecast with no data
    in a sense is easier as start from scratch
    no baggage from the past
    prevents rigid mindset, paralyzing inertia
    wireless, biotech and ecommerce come with no track record
    possible opportunities for failure/great success & progress
  • 20. The Greatest Tech Story – The Internet Revolution
    “ Larry Roberts – Internet Pioneer
    Familiarity and Repetition creates assumptions about what is and is not possible
    Assumptions from History Automatically Do Not Become Facts ( .. they become superstition)
  • 21. Six Situations of Technology Licensing
    Enforcement Licensing
    Opportunity Licensing
    Opportunistic Licensing
    Divestiture Licensing
    Partnership Licensing
    Startup Licensing
  • 22. Pricing & Valuation
    Valuation is the direct output of valuation tools & methods
    Pricing is the internal & external communication of perceived value
    valuation is an opinion , pricing is an offer
    pricing leads to negotiation, agreement and commitment
    seller can establish lower price for quicker deal
    no time – fire sale
    lot of time, due diligence, marketing effort
    technology ages like apple not fine wine
    playing hard to get is a risky strategy
    pricing – is a strategic issue
    valuation – determines assets intrinsic value
    The Price – Arthur Miller play - The Price is nothing but a Viewpoint
  • 23.
  • 24.
  • 25. Factors that affect final valuation
    • Avoiding Startup Costs
    • 26. Can pay more than what valuation indicates
    • 27. Higher price to pay is still better than incurring startup costs
    • 28. Degree of Control
    • 29. Minority interests are difficult to sell
    • 30. There is a premium to be made for majority control
    • 31. Leveraged Buyout (LBO)
    • 32. where majority of purchase price is generated from company assets, recommended where there is low current and long term debt.
  • Case Study – What is this business worth today?
    • Assume you have an opportunity to buy a small business which you know intimately and of which you can accurately forecast the company’s growth.
    • 33. Right now it is not profitable but with your expertise, you expect it to generate RM380K net cash flow over 5 years and have a networth of RM400k at end of year 5.
    • 34. Assume the acquisition is in 31st Dec 2007, you expect a return of 24% and the projected annual cashflow is as below:
    2007 2008 2009 2010 2011
    Net CashFlow RM0K RM40K RM80K RM110K RM150K
    Hint: Use Discounted Cash Flow for rate of Return of 24% ( Yr 1=0.806, Yr 2 = 0.650, Yr 3 = 0.524, Yr 4= 0.423, Yr 5= 0.341)