The document discusses creative funding strategies for high-tech companies, highlighting the importance of intellectual property (IP) monetization in raising capital. It features insights from various executives and case studies on how patent sales and licensing can provide critical financial support for businesses facing funding challenges. Additionally, it examines the role of crowdfunding and different fundraising approaches, providing examples and factors to consider when seeking capital.

1. Creative Venturing:
Creative Funding, Dec 6 2013
Moderator: Fas Mosleh, SVP, IP M&A
Panelists:
Stefan Lindsay, Director Sales, Incident
Andre Gueziec, CEO, Beat the Traffic
Bill Jackson, Former Kodak Executive, CEO Sinovia
UNLOCKING THE VALUE OF YOUR IP
Rights to trademarks referenced
herein, other than Kanzatec
trademarks, belong to their
respective owners. We disclaim
proprietary interest in the marks
and names of others.
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2. Agenda
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Introduction
Panelist views
Prepared questions
Open session
Kanzatec is a leading Patent Research and Transaction
Advisory firm serving private and public high tech
companies to help drive greater business success
through high-performance patent strategies. Our senior
consultants combine operating company experience in
business management, information systems, patent
strategy and operations, with analysis and research
capabilities spanning many high tech segments. The
company collaborates with a wide range of high tech
companies, from startups to the Fortune 500.
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3. Here it Comes
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4. My Background - Fas Mosleh
– Global High Tech GM/Sales/Marketing/BD executive
• Spanned chip to software
– IP Monetization executive at Kanzatec IP Group (sell ‘000’s
patents/year)
• 100+ buy/sell transactions over $200M
• VP Global Acquisitions – Intellectual Ventures
• Executive Director Patent Sales Group – HP
– Manager, founder HP’s 1st Venture fund in 1998 ($2B+ M&A)
Experienced at building new businesses - Executive at venture funded
startups - Agiliti, Vernier Networks, Jamcracker
Executive at Hewlett-Packard, Eastman Kodak, Agilent, Avago
Technologies and Micron; IBM UK labs & sales management
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5. Funding Examples- where I worked
$100M
$40M
>$30M
>$100M
$2B
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6. Corporate Introduction
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Founded in 2008 to focus on IT analysis and research – grew into IT product and
system research, prototyping for F500 for IP projects – IT systems heritage
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Emerging, SMB & Fortune 500 companies in high tech – imaging, web, software,
enterprise datacenter, systems, semiconductors, mobile/wireless telecom
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IP Brokerage Palo Alto, CA - Sales, Acquisitions, Valuation, Research/Analysis
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Global team members and Subject Matter Expert network
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Silicon Valley, NY, Kansas, San Diego, London, Netherlands, Korea, China
India, Europe, SMEs
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7. What Kanzatec Does – R&R
IP M&A and Patent Sales
Drive greater business success through highperformance patent strategies
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8. Example Industries We Serve
Social Web E-Commerce Software
Data Center
Semiconductor
Imaging
Cloud
Transport
Networking
Mobile
Energy
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Medical
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9. Raising funds
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•
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Patent sale, licensing, secured loan
Services/bootstrapping
FFF
Bank/credit/secured loan
VC/Angels
Crowdfunding
Government
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10. Example 1 – IP Funding
• Situation
– Need another round of funding
• Challenges
– Business doing poorly
– New funding hard to get at reasonable valuation
• Action
– Divest patents with a license grant back
• Results
– Obtained $2M to extend runway another 18 months
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11. Example 2 – IP Income
• Situation
– $1B+ revenues semi company
• Challenges
– Unnecessary IP found every year
• Action
– Create a regular revenue stream
• Results
– Sell $1M of patents every quarter garnering 75% margins
– Healthy, dynamic IP strategy
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12. Example 3 – IP Boost
• Situation
– Seeking Funding/IPO
• Challenges
– Must maximize $$s
Equalizer
• Action
– Explore high return IP acquisition to boost valuation
• Results
– Bought ~$2M of patents = valuation boost of additional $3-5M
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13. Comparing Standard vs. Syndicated
Source: Intellectual Asset Magazine November 2013 (Fas Mosleh)
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14. Patent Based Monetization Approaches
Key:
PLoan=Patent Secured Loan
PSEI=Patent Secured Equity Investment
Sale=Patent Sale
SynSale=Syndicated Patent Sale
Licensing=Patent Licensing
Effort/Risk
Size of funds
License
>=$10M
Sale
~$5M
Loan/Equity
$1-2M
© Copyright Kanzatec LLC 2013
2 months
6 months
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Time Taken
12-18 months
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15. A Look at Crowdfunding
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16. $5B Raised through CFP in 2013
Types:
Donation
Equity
Reward
Lending
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17. 10 Most Active Crowdfunding Categories
Top:
Hardware
Software
Games
Music
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18. Factors To Consider
When assessing methods of fund raising
• Quality/Quantity
• Time to raise
• Difficulty to raise (resources needed)
• Constraints or conditions with money
• Smart vs. dumb money
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19. Types of Funding by Ease & Speed
Hard (effort required by Owner)
IPO
Govt.
Bootstrapping
VC/Angel
Quick
Slow
Patents
Crowdfunding
FFF
Note: Positions above are exemplary, not necessarily accurate
© Copyright Kanzatec LLC 2013
Easy
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20. Stefan Lindsay
Creative
Venturing
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Upping Valuation
Creative Exits
Creative Funding
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21. Making music easy and accessible with
technology
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22. The gTar is the first App-Enabled
Smart Guitar
An Interactive and Socially Connected Music
Experience
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23. Company Milestones
Launched through a Kickstarter Campaign at TC Disrupt NY 2012
• Won 2nd Place at TCDisrupt
• Reached $100K KS goal in 11 hours
* Grand total of ~$355K in a month
• Then, the real work began...
• Fall 2013 - Units shipping
• All Pre-order Fulfillment Complete
• Orders ship in under a week
• Appearances
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CNN Money
NBC
TechToys 360
CCTV (China)
Discovery News
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Wide Press Coverage:

24. TAM
Music Industry ($168B+)
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•
User generated content
• Automated attribution
• Metrics / Analytics
Platform for innovative content
use cases
Entertainment ($70-80B)
• Casual
• Interactive
• Social
Education ($10-20B)
• Fun
• Quick
• Convenient
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25. Competition
Entertainment
The gTar and Incident Platform
breathe unity into a fragmented
competitive landscape
Guitar Hero
Tapulous
Smule
Education
Garageband
Fretlight
Ovelin
Traditional*
Roland
Jamstik
Ableton
Music
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*See education ROI analysis

26. Social Creation and Consumption
Creation
Collaboration
Consumption
Social Interaction / Content
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27. Example: Education ROI Analysis
Value Prop
Cost
- Painful learning curve
$1000-1500*
- Most students quit after first year
- Expensive and inconvenient setup
- Immediate, out-of-the-box gratification
$400
- Positive reinforcement
- Applications and Content Platform
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28. If you've ever picked up the guitar for the first time and tried to play a favorite
song, you know how discouraging it can be. The gTar completely changes that.
-Drew Houston, Dropbox co-founder and CEO
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29. Andre Gueziec
Creative
Venturing
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Upping Valuation
Creative Exits
Creative Funding
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30. Triangle Software LLC d.b.a
Mission: To help drivers beat the Traffic®
12/9/2013
12/9/2013
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31. Andre Gueziec, Founder and former CEO
Real-time data, analytics, prediction, multimedia platform
12/9/2013
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32. Intuitive Presentation Interface
• Automated, animated
visualization
• Ease of use and
operation
• Auto-populates with
latest data
• Customized for each
affiliate
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33. 60 TV stations and cable providers, radio stations in North
America
12/9/2013
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34. Beat The Traffic App Presentation
12/9/2013
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35. 12/9/2013
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36. 12/9/2013
12/9/2013
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37. Mobile traction
Community Data
• Valuable crowdsourced GPS data
• Monetization: ads
+premium
payments
• iPhone & iPad, Android,
BBerry apps
• >3 000 000 downloads
• Rated top 10 navigation
• approx. 500,000 active,
regular users
12/9/2013
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38. Quality Data
• comparing
estimated
travel speeds
with leading
source
RMSE 5.3 mph
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39. Successful Exit in 2012
Strategic acquisition by The Weather Network in
Canada
12/9/2013
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40. Bill Jackson
Creative
Venturing
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Upping Valuation
Creative Exits
Creative Funding
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41. Creative Venturing:
Creative Funding
Bill Jackson
Co-founder & CEO
Sinovia Technologies
bill@sinoviatech.com
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42. Funding HW is REALLY HARD!
High development cost
High capital costs
Long time horizon
Find ways to minimize or remove these costs
VC: “We like software companies, they fail quickly and cheaply”
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43. The adage that Align with business unit Series B is gone
you don’t talk to strategics until
Fit still think “seed” directionare too early,
w/ strategic companies
However: many
Watchthere impedance mismatch
for is activity at Series A
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44. I’m from the Government and
I’m here to help you…
National/State/Local
Doesn’t pay for “all”
Reports/oversight/rules
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45. Other Sources
NRE/JDA’s with potential
customers
Emerging HW incubators
License of technology
Friends, Family & Fools
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46. Sinovia Tactics to Date
NSF Grants ~$1M
Outsourced Mfg
Partnerships
JDA, NRE & Samples
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47. Thank you
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48. Prepared Questions and Open Q&A
Creative
Venturing
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Upping Valuation
Creative Exits
Creative Funding
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49. Questions
• What is the most creative funding you ever put
together?
• How would you fund your next venture and why?
• What factors should be considered when funding
their venture?
• How do you price your company for a funding?
• How did you decide what was offered was the
right amount?
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50. Thank You
Creative Venturing …2014
??
Negotiating a Term Sheet
Funding your Patent Ideas
Creative
Venturing
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51. Three ‘Secrets’ of Successful Fundraising
1) People buy on emotion, and support the decision with logic.
Must make an emotional connection with investors.
E.g.
— Make them feel smart, enhance their reputation.
— Keep it simple. Complexity = headaches ; Governing equation for high-net-worth
types (and everyone else, too).
Use the five C’s: “Be concise, clear, consistent, compelling and compliant.”
2) Effective fundraising requires effective, marketing, replicable process
Don’t lose prospects during the marketing process. Hunting for capital demands the
same precision as your core business. One hiccup and the tenuous trust you’ve
built with prospects could evaporate.
3) People invest with people they know.
Referrals are critical - you never know which “intermediary” will lead to pay dirt.
Adapted from Source: Forbes, Bryan Johnson
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52. What’s Your V?
VALUE
Customers
Employees
Shareholders
Investors
V
V
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V
V
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53. Most Popular CFPs
• Kickstarter
• Indiegogo
• Crowdtilt
• Angellist
• Razoo
• Petridish
Most Successful
• Pebble Watch
• Star Citizen
• Lets Build a Goddamn Tesla
Museum
• Recaptcha
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