Gene Scout advises clients along several aspects of technology commercialization depending on their needs. This includes performing IP, literature and clinical trial scans to define a company's market position and economic value. Gene Scout also helps create operating financial and marketing plans and provides benchmarks for business development terms relevant to valuation. When evaluating an early stage technology, it is important to define the application, market, and product as well as consider the IP estate, market potential, team, and available funding. Building company value occurs in stages from alpha to beta testing to exit, with each stage ideally providing a return on investment.

1. Elements of Early Stage Valuation
and Value Growth
Gene Scout Talk for NanoBioConvergence
Mary D Napier
3/1/2014
May 17, 2006
mnapier@genescout.com
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2. What we do
Discovery
Science
Translation
Strategy
Consulting
Project
Mgmt
Business
Development
Portfolio
Management
Gene Scout advises along several aspects of technology
Commercialization pending on the needs of the client.
3/1/2014
mnapier@genescout.com
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3. Translation
•
IP, literature and clinical trial scan in your company’s scientific
area.
•
Define market positioning and economic value.
•
Market segmentation to understand your company’s major
competition and market niche.
•
Create operating financial and marketing plan for your company.
•
Provide best practice benchmarks for business development:
financial and licensing terms relevant to your valuation.
Translation
3/1/2014
mnapier@genescout.com
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4. Before getting to the model
Photo Masks
Microscopy
Define who you are.
Define the application.
Research
Tool
Define the market and the product.
Others?
3/1/2014
mnapier@genescout.com
Nano
Lithography
(Template
Fabrication)
SemiConductors
(circuits)
Others?
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5. ‘Crossing the chasm’: defining your market, obtaining
PoC customer
Market:
1. A set of actual or potential
customers
2. for a given set of products or
services
3. who have a common set of
needs or wants AND
4. who reference each other when
making a buying decision(1).
Proof of concept customer:
Pilot project (s) to validate
technology
(1) Geoffrey Moore, Crossing the Chasm (Collins Business Essentials,
1991). P. 28.
3/1/2014
mnapier@genescout.com
Market Adoption
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6. Decision Point:
Is it a publication, sponsored research or a new
company?
Not your decision entirely.
• IP estate: yours and the marketplace.
• Market Potential: your market positioning.
• Team.
• Money.
3/1/2014
mnapier@genescout.com
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7. The step function of building value.
Exit
Beta two
Beta one
40% return
Alpha
3/1/2014
mnapier@genescout.com
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8. Creating Value:
Thinking simply, cutting through confusion.
Revenues – Costs = Profit
Bid Price on Contract
3/1/2014
Consumables Contract
mnapier@genescout.com
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9. Types of Valuation Models
•
The emotional model
•
The discounted cash flow model
•
The comparables model
•
Others?
3/1/2014
mnapier@genescout.com
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10. Negotiation and valuation
Understand your customer’s mindset…understand your
financier’s mindset.
•
The Angel
•
The Venture Capitalist
•
The Strategic Investor
3/1/2014
mnapier@genescout.com
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11. Early stage valuation: the influence of comparables.
Public comparables.
Private Comparables2
Series A:
Nano Opto Corp: $16M
raise.
IPO valuation down
Pharmaceuticals:
Series B:
Nanotechnologies: $6.4M
raise, $19M post money.
Applied Microstructures:
$8.5M raise.
Raise less than $100 for
A ~$200 valuation IPO
Exit.
NEWCO
Nano Public market
Comparables3:
Series C:
Molecular Imprints: $17-25M
raise. Post money ~$100M
SMMX: $869M
CALP: $176M
ACCL: $175M
Series D (C):
Nanosphere: $59M raise,
Post money~$100-$125M
3/1/2014
Sources Cont’d
2.) OneSource and company websites.
3.) Market caps supplied by Yahoo Finance, May 16th 2006.
mnapier@genescout.com
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12. Takeaway
Exit
Investor: “Buy Low, Sell High”
Beta two
Entrepreneur:
know thy market, love thine
customer.
Beta one
Alpha
40% return
3/1/2014
mnapier@genescout.com
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