Clusters & (VC) Capital:
                     Scaling Up for Innovation
Russia/BII US State Dept: Biotech for Regional Dev...
Clusters & (VC) Capital:
                  Scaling Up for Innovation




26/28 June 2007          www.IVIpe.com
          ...
Today’s Message
1. What’s Happening in the Market?
       The Good & the Bad
       Issues: $ & Deal Flow, Other?
2. GoFor...
IVI History-Direct Invest &
                        Advisory
  Canada (1992)
                                             ...
IVI in Russia & Russian Tech
1997: Transact Russian VC Deals-Infrastructure
2001: IVI’s Russian Technology Investment Foru...
Successes in the Market
                    Since 2001

                                              PBC Lasers
         ...
Some Clouds Too: Learning
               Curve Lessons
                       Optiva ($49M) liquidates:
                  ...
Realities of VC
Equity is a Great Product, but:
      1. It’s Expensive (% ownership)
      2. Very Selective-1/100 SMEs (...
Realities of VC (Emerging
                          Mkts)
1/200 SMEs seeking VC in emerging markets
receive $$$ Reasons, h...
What’s Working Against Early
         Stage Tech & VC in Russia
Plenty of $: It’s Competition:
   Domestic Growth, FMCC, F...
Russian Tech for Global Mkts:
          Alternative Strategy?



                  ?


26/28 June 2007       www.IVIpe.com...
GoForward Plan: Action Item
                       #1
1. Invest in Tech for Domestic Mkt
         Link w/Corporates: User ...
Possibilities for Investment:
                          Build the Supply Chain
                                           ...
Where’s the Customer Pain
                (Need) in the Industry?
1. MORE Perf, Execution & Cost Reduction
        Not Gam...
GoForward Plan: Action Item
                      #2

1. Invest in Tech: the Domestic Market
2. Capitalize a ‘Mini-Grant’ ...
GoForward Plan: Action Item
                      #3

1. Invest in Tech: the Domestic Market
2. Capitalize a ‘Mini-Grant’ ...
GoForward Plan: Action Item
                         #4

1.   Invest in Tech: the Domestic Market
2.   Capitalize a ‘Mini-...
GoForward Plan: Action Item
                      #4

4. Inventory Your Tech & Publish as a
  Database on the Internet
   ...
GoForward Plan: Action Item
                     #5
5. Establish a Biz Dev Office
    Scouts for Opts in SMEs & Institutes...
GoForward Plan: Action Item
                      #6
6.Create an IP Fund
         Fund costs of Filing IP, especially Int’...
GoForward Plan: Action
                     Item #7
6. Organize R&D & Supply Chain
   Competitions for Users of Tech
     ...
Concluding Thoughts

New Zealand is a Fitting Example of Success
Not Emerging Market, but Small & Remote




  26/28 June ...
Technology In Many Places!
                Just Look & Define


    Slaughter                        Raising          Gene...
Thomas D. Nastas
                       Tom@IVIpe.com
                       www.IVIpe.com
                    Tel. 7.985....
Back-up Slides Follow




26/28 June 2007         www.IVIpe.com
                        Info@IVIpe.com
Best Practices

   Factors of                   Best Practice
     Success
Engaged             Institutes engaged in econ ...
Best Practices
      Factors of                 Best Practice
       Success

Capital is            Programs for
Available...
Best Practices
   Factors of                   Best Practice
    Success
Discretionary        Receive significant federal
...
Best Practices
   Factors of                  Best Practice
    Success
Talent Pool          Talent is the #1 the variable...
Best Practices
    Factors of                   Best Practice
      Success
 Specialized         Leading bioscience region...
Best Practices
  Factors of         Best Practice States/Regions
    Success
Patience and        Building a critical mass ...
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IVI Kirov 27 June 2007 Presentation For Distribution

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Thomas D. Nastas (Tom Nastas) presentation at technology conference, Kirov Russia

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IVI Kirov 27 June 2007 Presentation For Distribution

  1. 1. Clusters & (VC) Capital: Scaling Up for Innovation Russia/BII US State Dept: Biotech for Regional Development Kirov Russia, 26/28 June 2007 Innovative Ventures Inc. Haslett, MI. USA Moscow, Russia Thomas Nastas President Tom@IVIpe.com www.IVIpe.com 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  2. 2. Clusters & (VC) Capital: Scaling Up for Innovation 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  3. 3. Today’s Message 1. What’s Happening in the Market? The Good & the Bad Issues: $ & Deal Flow, Other? 2. GoForward Plan to Spur More $$ Strategies & Structures Boosting Quality/Quantity of Deals How Do Supply Chain Needs as Clusters Fit into the Picture? 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  4. 4. IVI History-Direct Invest & Advisory Canada (1992) Europe (1992/94) C$100MM-Canadian TP Fund, $10MM- Bus. Dev. Bank EU, $-Financière St Dominique, Paris USA (1986) Russia (1997) The Michigan Product HP LP, $30MM-EBRD & Dev. Fund ($5MM) USAID Africa (1993/96) E. Africa $5MM, Sub- Saharan, $200MM, South Africa,$30MM, IFC/WB 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  5. 5. IVI in Russia & Russian Tech 1997: Transact Russian VC Deals-Infrastructure 2001: IVI’s Russian Technology Investment Forum (2 day biz plan comp, 35 top IT SMEs) & VC Workshop (2 days; education/trainings-presentations & elevator pitch) 2002: Russian Tech for Oil/Gas (e.g., SLB), IT, Biotech, Medical, Homeland Security (Global) 2004: Partnership with Shell (STV/GameChanger) • ‘Snapshot’ the mkt, invest in Gamechanging tech for global mkts & start a relationship to build a portfolio • Member, Russian Tech Tour Committee (biz plan) 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  6. 6. Successes in the Market Since 2001 PBC Lasers & Wostec Multinationals w/R&D Labs in Russia 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  7. 7. Some Clouds Too: Learning Curve Lessons Optiva ($49M) liquidates: Nanotech's 1st big flame-out Startup doctors ease portfolio pain-Trustworks ($23M) Cybiko Ceases Operations Not Seeing Entrepreneurial SME Creation from MNC R&D Labs Multinationals w/R&D Labs in Russia 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  8. 8. Realities of VC Equity is a Great Product, but: 1. It’s Expensive (% ownership) 2. Very Selective-1/100 SMEs (in the USA) seeking VC receive $$$-High Risk/High Return Sales $ Need Big Markets ($50-$100MM) People (Technical, Mkting, Mgt, Support, etc.) 3. Requires Access to Liquidity (Capital Mkts &/or Strategic Buyers, Domestic or Foreign) 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  9. 9. Realities of VC (Emerging Mkts) 1/200 SMEs seeking VC in emerging markets receive $$$ Reasons, high rejection rates: Undeveloped Opportunity Lack of Uniqueness/No Competitive Advantage Too much $$$, too much time & too little reward People (mgt/employees) Lack of Transparency, No Clear Title/Ownership of IP What to do with the SMEs that are rejected? Ignore? Sympathize? Seek New Solutions? 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  10. 10. What’s Working Against Early Stage Tech & VC in Russia Plenty of $: It’s Competition: Domestic Growth, FMCC, F&B, Retailing, Financial Services, Media, etc. Keeps Entrepreneurs in Non-Tech From Other Asset Classes w/Quicker & > Profits, e.g., Stocks & Real Estate From Israel, Ireland, USA, etc., with Good Deals, Technologies, Entrepreneurs & Successes 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  11. 11. Russian Tech for Global Mkts: Alternative Strategy? ? 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  12. 12. GoForward Plan: Action Item #1 1. Invest in Tech for Domestic Mkt Link w/Corporates: User Pull, Testing, Deployment & Commercialization Solve Tech & Supply Chain Needs Don’t Worry about Small Volumes Build Locally, Upgrade Later for National & Int’l Expansion 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  13. 13. Possibilities for Investment: Build the Supply Chain Research, Testing, & Agricultural Medical Devices Drugs & Hospitals Medical Laboratories Feedstock & Chemicals Pharmaceuticals & Equipment Agricultural Medicinal & Laboratory Specialty Biological processing botanicals apparatus & hospitals research furniture Basic organic Pharma- University Commercial chemicals ceutical Surgical, medical medical preparations medical, dental, research research Ethyl alcohol ophthalmic hospitals mfg. Diagnostic Testing & analytical substances Clinical laboratories Organic fiber instruments & research mfg. equipment Biological Medical institutions products laboratories & Fertilizers Irradiation diagnostic apparatus & Pesticides and imaging electromedical other agricultural centers chemicals equipment Product-Oriented www.IVIpe.com Service-Oriented 26/28 June 2007 Info@IVIpe.com
  14. 14. Where’s the Customer Pain (Need) in the Industry? 1. MORE Perf, Execution & Cost Reduction Not GameChangers; blocking/tackling tech so customers meet business plan 2. MORE Local Content More Value-added Tech Tech Sold to Multiple Customers Generate Supplier Sustainability thru Multiple Products/Services 3. What Else? 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  15. 15. GoForward Plan: Action Item #2 1. Invest in Tech: the Domestic Market 2. Capitalize a ‘Mini-Grant’ Program Define biz opts for a technology Cost is US$3,000-US$10,000/technology Not a biz plan, but 3-4 document on tech’s potential 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  16. 16. GoForward Plan: Action Item #3 1. Invest in Tech: the Domestic Market 2. Capitalize a ‘Mini-Grant’ Program 3. Create ‘ Tech Proof of Concept’ Fund Transform ideas = deals Generate data to confirm performance, show weaknesses vs. competition & alternatives. Benchmarket to int’l standards 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  17. 17. GoForward Plan: Action Item #4 1. Invest in Tech: the Domestic Market 2. Capitalize a ‘Mini-Grant’ Program 3. Create ‘ Tech Proof of Concept’ Fund 4. Inventory Your Tech & Publish as a Database on the Internet 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  18. 18. GoForward Plan: Action Item #4 4. Inventory Your Tech & Publish as a Database on the Internet Org by tech, product & mkt Benefits by cost & performance Stage of dev., R&D, PD, Testing, Plan w/Timetable, milestones, budgets IP issued/filed & competing IP 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  19. 19. GoForward Plan: Action Item #5 5. Establish a Biz Dev Office Scouts for Opts in SMEs & Institutes Develops projects for ‘Mini-Grant’ & ‘Proof of Concept’ Funds Sells to Customers Keeps the Team Focused. Align Interests Sell Data or Provide Answers? Incentives: Cash/Salary or Equity? Transparent or Opaque? Responsive or Egocentric? 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  20. 20. GoForward Plan: Action Item #6 6.Create an IP Fund Fund costs of Filing IP, especially Int’l Pay-back as a Royalty on Sales Funded by Russian Gov’t Initiative/PPP 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  21. 21. GoForward Plan: Action Item #7 6. Organize R&D & Supply Chain Competitions for Users of Tech Go After Corporates & Corporate Investors vs. Financial Investors Interaction between R&D developers & Corporations & Corporate VC Corporations fund R&D, guide development & access opts in the supply chain Lower dev risk & get to market quickly Establish Industry Consortiums 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  22. 22. Concluding Thoughts New Zealand is a Fitting Example of Success Not Emerging Market, but Small & Remote 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  23. 23. Technology In Many Places! Just Look & Define Slaughter Raising Genetic Engineering & Breeding Butcher Distribution, Storage & Retail Locations Processing- Ham, Kielbasa Delivery 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  24. 24. Thomas D. Nastas Tom@IVIpe.com www.IVIpe.com Tel. 7.985.103.47.27 Innovative Ventures Inc. Moscow, Russia Haslett, MI USA 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  25. 25. Back-up Slides Follow 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  26. 26. Best Practices Factors of Best Practice Success Engaged Institutes engaged in econ dev Institutes with & committed to tech transfer Active Have mechanism for tech Leadership commercialization 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  27. 27. Best Practices Factors of Best Practice Success Capital is Programs for Available commercialization, pre-seed, & seed financing gaps (help establish & build SMEs) Active informal angel networks Investors include private & and public entities 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  28. 28. Best Practices Factors of Best Practice Success Discretionary Receive significant federal R&D Funding funding Centers serve as anchors for a region’s bioscience base 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  29. 29. Best Practices Factors of Best Practice Success Talent Pool Talent is the #1 the variable to build comparative advantage Educational institutions responsive to training students to meet the needs for workers at all skill levels, e.g., scientists, technicians, & production workers 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  30. 30. Best Practices Factors of Best Practice Success Specialized Leading bioscience regions Facilities and have private markets that Equipment provide facilities for bioscience SMEs Specialized bioscience incubators and research parks are a growing trend Access to specialized facilities and equipment 26/28 June 2007 www.IVIpe.com Info@IVIpe.com
  31. 31. Best Practices Factors of Best Practice States/Regions Success Patience and Building a critical mass takes Long-term years or even decades Perspective Early technology pioneers took 25 years, now 12 to 14 years to mature 26/28 June 2007 www.IVIpe.com Info@IVIpe.com

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