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Randy Brown - Real ROI: How to Turn a Single Contract into Multiple Sales/Projects

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Presenter: Randy Brown, VP, Virtual Heroes Division, Applied Research Associates

Before you sign that contract, let’s talk about what you can do to leave the door open for more work, follow-on’s, repurposing, or growth opportunities versus what may make this another one-and-done project for your team.

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Randy Brown - Real ROI: How to Turn a Single Contract into Multiple Sales/Projects

  1. 1. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 1 SOLVING PROBLEMS OF GLOBAL IMPORTANCE www.ara.com 1 Real ROI: How to Turn a Single Contract into Multiple Sales/Projects Randy Brown VP, Virtual Heroes Division Manager
  2. 2. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 2www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 2 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Real ROI and How to Achieve it • ARA/Virtual Heroes Intro • Master Services Agreements • Commercialization Agreements • Rights to Repurpose • IP Assertions • Maintenance/Support Agreements • Royalty Streams/Agreements • Questions
  3. 3. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 3 About ARA • Founded 1979, Albuquerque, New Mexico • 1,000+ Employee Owners in U.S. and Canada Employee Profile National Security ARA is the recognized national leader for providing innovative solutions to deter, defeat, and respond to threats facing the warfighter and our homeland 1 Infrastructure Leader in technologies and services to improve the performance and sustainability of infrastructure for transportation, buildings, and energy systems 2 Energy & Environment To be a recognized, highly regarded provider of innovative engineering services and products to the power and utility services market 3 Health Solutions ARA is a respected and sought after company providing specialized research and technology services, testing and product development in health science and engineering 4 Business Areas Virtual Heroes Division (VHD) Raleigh, NC Orlando, FL
  4. 4. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 4 Virtual Heroes Division of ARA Founded January 2004 by veterans of the Research Triangle Institute, the U.S. military and the entertainment game industry Acquired by ARA in April 2009
  5. 5. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 5
  6. 6. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 6 Gaming and Training Capabilities • We create targeted content in the following formats: • Simulations for Learning • Serious Games • Virtual Worlds • We deliver content on the following platforms: • PC/Mac via download • Web via thin client • Mobile Devices • Game Consoles • We provide: • Individual, self-paced learning • Instructor-facilitated team training
  7. 7. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 7 Congratulations, you got the… Contract/Grant/Award/Investment/Angel Funding/Friends and Family/Kickstarter! • Not so fast though! As they say, hold your horses…
  8. 8. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 8www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 8 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Work Hard Up Front: It Pays Off • Work to leave the door open for more follow-on’s • Look for options to repurpose content in the future • Consider growth opportunities past this one project • Avoid turning this into a “one hit wonder”
  9. 9. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 9www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 9 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Master Services Agreements Provide Value • Also called a Collaboration Agreement • This creates structure to generate Task Orders • Creates a plan/environment for on-going/future tasks/project work, instead of a single contract • Makes it easier to add work later • Yes it is more work up front, but worth the time • Caveat: some grants/awards/etc can’t support
  10. 10. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 10www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 10 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Master Services Agreement Example MASTER AGREEMENT Between XXXX and Applied Research Associates, Inc. This master agreement (hereinafter called “Master Agreement”) is effective the XXX day of XXX 20XX, by and between XXXX (hereinafter called "XXXX"), an institution having its principal office at XXX, and Applied Research Associates, Inc. with a principal place of business at 8537 Six Forks Rd, Ste 600, Raleigh, NC 27615 (hereinafter called “ARA”), where each are referred to as a “Party” and together as the “Parties.” RECITALS WHEREAS, the Parties will explore opportunities to fund, develop, market and sell for financial consideration, products resulting from projects, when feasible, under mutually agreeable terms; WHEREAS, the Parties wish to establish a Master Agreement to set forth the broad terms and conditions applicable to the conduct of these projects of mutual interest, this Master Agreement; WHEREAS, the Parties will enter into task-specific agreements (“Task Orders”) to identify, plan and execute projects of mutual interest between the Parties and specify resources to be made available between the Parties in support of each Task Order;
  11. 11. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 11www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 11 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Commercialization Agreements Address Revenue • Reciprocal agreement to sell/generate revenue • Normally set with equal royalty payments • Adjust the split based on expected efforts/sales • Set frequency of payments (quarterly, annually) • Include allowance for audit of books
  12. 12. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 12www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 12 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Commercialization Agreement Example COMMERCIALIZATION AGREEMENT THIS AGREEMENT, including all Exhibits attached hereto (the “Agreement”) is made and entered into this XX day of XXX, 20XX (the “Effective Date”) by and between XXX (“XXX”), a XXX corporation with offices located at XXX and Applied Research Associates, Inc. (“ARA”), a New Mexico corporation with offices located at 4300 San Mateo Blvd., N.E., Suite A-220, Albuquerque, New Mexico 87110 and 8537 Six Forks Road, Suite 600, Raleigh, North Carolina 27615. XXX and ARA are sometimes referred to collectively herein as the “Parties” and individually as a “Party.” WHEREAS, ARA has developed a technology platform composed of numerous software libraries, capabilities, and other digital assets known as the YYY (defined below) and uses the YYY to develop software that it licenses for education, training, assessment, and learning software applications;
  13. 13. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 13www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 13 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Rights to Repurpose Protect Future Value • Avoid work-for-hire at all costs • Include wording allowing rights to repurpose • Add wording protecting non-joint IP reuse • Leverage your existing assets offered “in-kind” to win rights • Consider discount if required to win rights • Define each sides Pre-Existing IP along with Joint IP
  14. 14. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 14www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 14 SOLVING PROBLEMS OF GLOBAL IMPORTANCE IP Assertions Clarify Ownership • Often required by the government • Many organizations leave blank • Don’t miss opportunity to declare your IP • Be as restrictive as you can • Be as exhaustive as you can
  15. 15. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 15www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 15 SOLVING PROBLEMS OF GLOBAL IMPORTANCE IP Assertions (Govt Example) The Offeror’s assertions, including the assertions of its subcontractors or suppliers or potential subcontractors or suppliers, shall be submitted as an attachment to its offer in the following format, dated and signed by an official authorized to contractually obligate the Offeror: 1) Identification and Assertion of Restrictions on the Government’s Use, Release, or Disclosure of Technical Data Computer Software. 2) The Offeror asserts for itself, or the persons identified below, that the Government’s rights to use, release, or disclose the following technical data or computer software should be restricted Technical Data Computer Software to be Furnished With Restrictions* Basis for Assertion** Asserted Rights Category*** Name of Person Asserting Restrictions**** VH ALT Platform VH GO Platform development exclusively at private expense Restricted (commercial) XXXXXXXXX Third-party integrations (e.g., Unreal Engine) development exclusively at private expense Restricted (commercial) XXXXXXXXX *** Enter asserted rights category (e.g., government purpose license rights from a prior contract, rights in SBIR data generated under another contract, limited, restricted, or government purpose rights under this or a prior contract, or specially negotiated licenses).
  16. 16. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 16www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 16 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Software Maintenance Agreements Create Potential • Describe: • Duration • Services (email, phone) • Support levels (response times, definitions) • Definitions of bug fixes versus enhancements • Potential for: • Hosting fees • Additional on-site support • Unspent maintenance fees • Follow-on work from enhancement requests
  17. 17. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 17www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 17 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Software Maintenance Agreement Example SOFTWARE MAINTENANCE AGREEMENT This Agreement ("Agreement") is made and entered into and effective this ___ day of ___, 20XX by and between Applied Research Associates, Inc. having its principal place of business at 8537 Six Forks Road, Suite 600, Raleigh, NC 27615 ("ARA") and XXX, having its principal place of business XXX ("Client"). WHEREAS, ARA has provided to Client certain software as specified in Exhibit A of this Agreement ("Covered Software") pursuant to a software license agreement between the parties (the "License Agreement"); and WHEREAS, Client wishes to have ARA provide maintenance and support services pursuant to the terms and conditions of this Agreement; NOW, THEREFORE, the parties agree as follows:
  18. 18. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 18www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 18 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Software Maintenance Agreements for Cloud • SaaS/Cloud Technologies: • Host it yourself, or • Sub work out to cloud providers as part of your service fees
  19. 19. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 19www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 19 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Royalty Streams/Agreements • Negotiate for sales royalties and service royalties • Consider investment of your own IRAD or Fee to gain royalty agreement. Example: • $500K contract, 8% fee = $40K • Invest $20K in return for 5% royalty • Requires $400K sales to recoup • All sales past that equals new fee
  20. 20. www.ara.com SOLVING PROBLEMS OF GLOBAL IMPORTANCE © 2015 Applied Research Associates, Inc. ARA Proprietary 20www.ara.com © 2015 Applied Research Associates, Inc. ARA Proprietary 20 SOLVING PROBLEMS OF GLOBAL IMPORTANCE Real ROI and How to Achieve it • ARA/Virtual Heroes Intro • Master Services Agreements • Commercialization Agreements • Rights to Repurpose • IP Assertions • Maintenance/Support Agreements • Royalty Streams/Agreements • Questions? @VirtualHeroes M: 919.593.0928 randy@virtualheroes.com

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