This document discusses various approaches and considerations for valuing technology transfer opportunities (TTOs). It begins by outlining key environment factors and valuation approaches like rules of thumb, comparables, and scientific methods. Examples of specific technologies are provided for demonstration. The challenges of long-tail distributions for valuations are discussed, emphasizing that most valuations will be wrong and money comes from outliers. Process control and negotiations are addressed. Uncertainty in assumptions is a major limitation for valuation precision.
An in-depth media analysis on the recent merger of Kraft and Heinz. Using publication and social media research, this presentation analyses sentiment and message pull.
Created with Kimberly Conquest and Mew Nanavaratorn.
Whether you've been in business one week or five years, an infusion of funds is always welcome. But what type of financing is best for your business? There are so many factors to consider--from the stage of your business to how much it'll cost to get the money--that just choosing a path to follow can be overwhelming.
It takes more than just a great idea to run a successful business. Entrepreneurs and existing business owners need capital to pursue their vision.
Raising funds is the most tedious and complex question faced by every startups. There are few options by which startups can raise funds are been listed in this presentation
An in-depth media analysis on the recent merger of Kraft and Heinz. Using publication and social media research, this presentation analyses sentiment and message pull.
Created with Kimberly Conquest and Mew Nanavaratorn.
Whether you've been in business one week or five years, an infusion of funds is always welcome. But what type of financing is best for your business? There are so many factors to consider--from the stage of your business to how much it'll cost to get the money--that just choosing a path to follow can be overwhelming.
It takes more than just a great idea to run a successful business. Entrepreneurs and existing business owners need capital to pursue their vision.
Raising funds is the most tedious and complex question faced by every startups. There are few options by which startups can raise funds are been listed in this presentation
Production of Jute Gunny Bags and Jute Fabric. Investment Opportunities in Jute and Jute Based Manufacturing Plant.
Jute is that the second most significant vegetable fiber when cotton because of its versatility. Jute is used mainly to form textile for wrapping bales of raw cotton, and to form sacks and coarse textile. The fibers also are woven into curtains, chair coverings, carpets, area rugs, hessian cloth, and backing for linoleum.
For More Details, Click Here:- https://niir.org/profile-project-reports/profiles/packaging-industry-beverage-can-bottles-blister-packs-carton-bags-plastic-bottles-skin-pack-tin-can-boxes-shrink-wrap-barrel-crate-aseptic-container-active-flexible-rigid-plastic-metal-flexible-glass-paper-board-food-beverage/z,,77,0,a/index.html
https://niir.org/profile-project-reports/profiles/jute-jute-based-project-oil-coir-shopping-bags-projects/z,,f,0,a/index.html
https://www.entrepreneurindia.co/project-and-profile-listing.aspx?srch=jute
Contact us
Niir Project Consultancy Services
An ISO 9001:2015 Company
106-E, Kamla Nagar, Opp. Spark Mall,
New Delhi-110007, India.
Email: npcs.ei@gmail.com , info@entrepreneurindia.co
Tel: +91-11-23843955, 23845654, 23845886, 8800733955
Mobile: +91-9811043595
Website: www.entrepreneurindia.co , www.niir.org
Businesses may be organized in a number of different ways, including sole proprietorships, partnerships or corporations. A business may offer to sell a portion of its ownership by issuing stock.
A tutorial to basics of stock markets, basically for newbie's. Explains what is stocks, how trading happens, kinds of trading and some basic terminologies.
The Intellectual Property Licensing Valuation Model is based on the Monte Carlo simulation and was created using Crystal Ball software. The model provides an Internal Rate of Return (IRR) and Net Present Value (NPV) valuation while taking into account the inherently high uncertainty (risk) of cost and revenue associated with embryonic technology projects. The widget and its associated cost/revenue figures are fictitious. However, the model can be applied to real world projects.
Production of Jute Gunny Bags and Jute Fabric. Investment Opportunities in Jute and Jute Based Manufacturing Plant.
Jute is that the second most significant vegetable fiber when cotton because of its versatility. Jute is used mainly to form textile for wrapping bales of raw cotton, and to form sacks and coarse textile. The fibers also are woven into curtains, chair coverings, carpets, area rugs, hessian cloth, and backing for linoleum.
For More Details, Click Here:- https://niir.org/profile-project-reports/profiles/packaging-industry-beverage-can-bottles-blister-packs-carton-bags-plastic-bottles-skin-pack-tin-can-boxes-shrink-wrap-barrel-crate-aseptic-container-active-flexible-rigid-plastic-metal-flexible-glass-paper-board-food-beverage/z,,77,0,a/index.html
https://niir.org/profile-project-reports/profiles/jute-jute-based-project-oil-coir-shopping-bags-projects/z,,f,0,a/index.html
https://www.entrepreneurindia.co/project-and-profile-listing.aspx?srch=jute
Contact us
Niir Project Consultancy Services
An ISO 9001:2015 Company
106-E, Kamla Nagar, Opp. Spark Mall,
New Delhi-110007, India.
Email: npcs.ei@gmail.com , info@entrepreneurindia.co
Tel: +91-11-23843955, 23845654, 23845886, 8800733955
Mobile: +91-9811043595
Website: www.entrepreneurindia.co , www.niir.org
Businesses may be organized in a number of different ways, including sole proprietorships, partnerships or corporations. A business may offer to sell a portion of its ownership by issuing stock.
A tutorial to basics of stock markets, basically for newbie's. Explains what is stocks, how trading happens, kinds of trading and some basic terminologies.
The Intellectual Property Licensing Valuation Model is based on the Monte Carlo simulation and was created using Crystal Ball software. The model provides an Internal Rate of Return (IRR) and Net Present Value (NPV) valuation while taking into account the inherently high uncertainty (risk) of cost and revenue associated with embryonic technology projects. The widget and its associated cost/revenue figures are fictitious. However, the model can be applied to real world projects.
Primary capital market scenario in India, primary market intermediaries, primary market activities, methods of raising resources from primary market; secondary market scenario in India, reforms in secondary market, organization and management, trading and settlement, listing of securities, stock market index, steps taken by SEBI to increase liquidity in the stock market.
Slides present data and information system. In any information system security and integrity is the prime concern. How we can make sure stored data is more secure and generated information should be accurate, reliable and consistent.
Digital Strategy 101 is an overview of the current state of digital strategy and an exploration of core concepts, deliverables, and thought-leaders relevant to young practitioners.
Many people call a company's ERP system its "backbone." It certainly is the backbone, but it's also the heart, soul and lifeblood of a company. Let's play "ERP Operation" and dissect the perfect manufacturing ERP solution for small to medium-sized manufacturers.
Stimolare e orientare il comportamento d’acquisto dei Consumatori sfruttando leve di marketing: location, assortimento, format, private label, format distributivo, promozioni e pubblicità, merchandising, pricing, crm e loyalty.
Customer Satisfaction VS. Customer RetentionAhmad Heshmat
it explains the difference between retention and satisfaction, and typed of loyal customers, and also discuss reasons behind churn, specially for telecom industry. (if you want to download,it is open now :)
Jodi Schneider presents "15 Business Story Ideas to Jump on Now" at a free business journalism workshop, "Covering Business on Tribal Lands," hosted by the Donald W. Reynolds National Center for Business Journalists and the Native American Journalists Association.
For more information about free training for business journalists, please visit businessjournalism.org.
Contextual Authentication, also known as Risk-based Authentication, is matching the level of authentication to the expected impact of the surrounding events. Simply put, contextual authentication dynamically establishes the level of credibility of each user in real-time and uses this information to change the level of authentication required to access an application. Please see a link to live tutorial here: http://pg.portalguard.com/contextual_authentication_tutorial
Modeling the Value of a Strategic Patent Portfolio for High-Tech CompaniesErik Oliver
Are you looking for a financial model to explain your patent development and acquisition programs? We show how to answer your CEO’s, or GC’s, question about how much to spend on patents? We present a method to tie your strategy to a firm business plan and calculate a return on your patent investment.
Presentation made on July 29 2009 in Centurion, RSA to attendees from Innovation Fund, DST and other related people. The presentation paid specific attention to the interaction between patent professionals and the technology transfer process in publicly-funded research institutions..
We will do a valuation of the intangible assets of a new product or technology platform using the income method during the workshop. Key choices: Economic life of the product, discount rates by types of buyers, net present value of free cash flow, and Relief of Royalty. Sources of royalty data and selecting and adjusting comparable licenses.
TCF...CIF..WTF(unding)? How to prepare a winning applicationTEDCO
TEDCO's TCF..CIF..WTF(unding) workshop covers the key points that Maryland entrepreneurs need to know when they are applying to TEDCO's funding programs.
FiBAN's business angel training "Business Angel Returns" by Robert Wiltbank -...FiBAN
Presention shared by Dr. Robert Wiltbank at FiBAN's business angel training in Helsinki, 3rd of November.
All the presentations and videos are gathered here: https://www.fiban.org/robertwiltbank
Presentations given:
1. Comparison of Finnish and US angel activity
https://www.youtube.com/watch?v=UKdmr...
- Slides:
2. Angel Returns: https://www.youtube.com/watch?v=juuAK...
- Slides:
3. Effective business angel strategies: https://www.youtube.com/watch?v=TsZQd...
- Slides:
4. Effectuation in Venture investing - Do experts make decisions differently?: https://www.youtube.com/watch?v=miWap...
- Slides
For additional details and questions: https://www.fiban.org/robertwiltbank
Presentation by Steve Scott, Lorna Neilson, Mary Canady, and David Welch at the San Diego Biotechnology Network's Bootstrapping Biotech event October 29th 2009.
Selling 0days to governments and offensive security companiesMaor Shwartz
Selling 0-days is a fascinating process that not a lot of people are familiar with. This talk will discuss a vulnerability brokerage company called Q-recon and provide a glimpse of how this market works. In the presentation the following questions will be answered from three different angles (researcher/broker/client):
Who (researcher profile) is selling 0-days to governments / offensive security companies?
What is the process of selling 0-days?
How to sell 0-days?
At the end of the presentation, I will give a few tips for researchers that want to sell 0-days to offensive security companies/governments.
The presentation touches on various tax refund programs and grants for companies dealing with technology: SR&ED, OIDMTC, IRAP, Youth IRAP, SBIP and others.
Pest world 2013 managing people for profitDonnie Shelton
PestWorld presentation that I gave in Phoenix AZ. The presentation focuses on how to manage your people to establish a culture of performance and accountability.
MEDTECH 2013: Morning Plenary, Roger Kitterman, Managing Partner of Innovatio...MedTechAssociation
Roger Kitterman, Managing Partner of Innovation Fund, Partners Healthcare, presents at MEDTECH 2013 on October 8, 2013 on Trends in Early Stage Medical Technologies: A Venture Perspective.
Technology Transfer in an Emerging EconomyMarcel Mongeon
Presentation made on August 13, 2009 in Nairobi Kenya. Sponsored by the Institute of Economic Affairs, this presentation highlights the improtant of engaging in technology transfer to being the results of publicly-funded research into actual use. Tips and traps of the process were highlighted.
This presentation examined the role of Material Transfer Agreements in bioprospecting relationships. Also covered were issues on benefits sharing under the Convention on Biological Diversity and the implementation of the CBD.
Presentation on issues related to a spin-off company formation. Given as part of an ASEAN-USPTO Program on Technology Transfer in Bangkok, Thailand, July 3, 2009.
XX
A summary of terms that should be included in licence agreements. Presented at an ASEAN-USPTO Program on Technology Transfer in Bangkok, Thailand, July 2, 2009.
Running an institutional (usually university) technology transfer office. Presentation given in Bangkok, Thailand as part of an ASEAN-USPTO Program on Technology Transfer - July 1, 2009
Points to consider in establishing an institutional (usually university) intellectual property policy. Presentation given as part of an ASEAN-USPTO Program on Technology Transfer in Bangkok, Thailand, July 1, 2009
Company Valuation webinar series - Tuesday, 4 June 2024FelixPerez547899
This session provided an update as to the latest valuation data in the UK and then delved into a discussion on the upcoming election and the impacts on valuation. We finished, as always with a Q&A
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website – www.pmday.org
Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
We will dig deeper into:
1. How to capture video testimonials that convert from your audience 🎥
2. How to leverage your testimonials to boost your sales 💲
3. How you can capture more CRM data to understand your audience better through video testimonials. 📊
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Search Disrupted Google’s Leaked Documents Rock the SEO World.pdf
Technology Valuation Methods
1.
2. Environment of TTO valuations
The key to valuation
Valuation approaches
› Rules of thumb
› Comparables
› ‘Scientific’ approaches
3. Section 9 of IP Handbook
› http://www.iphandbook.org/handbook/ch09/
Anything written by Richard Razgaitis
4. Three examples of technologies:
› US 6,684,702 – Flow Duct Obstruction
› US 6,386,217 – Axillary Crutch
› US 6,048,850 – Method of Inhibiting
Prostaglandin Synthesis in a Human Host
For each example:
› Patent abstract, diagrams, claims
Each is a real TTO valuation issue
5. 100.00
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
-10.00
McMaster University FY97 to FY06, Net
Revenues/Disclosure over Disclosures, Max revenue=100
6. What happened to Pareto?
(80/20)
More likely:
› Long Tail distribution (98/2)
Valuation implications
› Do we make any money except
on a home run?
› Most valuations will be wrong
› A lot of money in thin lines
› But watch out for the expenses
7. Process control
› Want to concentrate on big winners
Help with subsequent negotiations
› Knowledge of the market
› Good valuations = Good deals
Helps set targets
Classic Definition of Valuation
› Between willing buyer and seller
› Having full possession of all relevant facts
8. Technology Patents
Know-how
Expertise
Exclusivity Yes / No
Confidentiality Yes / No
Licence Back Yes / No
What Plan? Spin-off
Licence
Other
9. Key to value: the Market
› The ‘value’ proposition
Who decides to buy?
e.g.: who decides on choice of a
specific drug for a condition?
Q: For an example, what are our
relevant markets?
Q: Are there other markets we should
consider?
10. Before anyone can buy product, what
still needs to be done?
› Regulatory approvals
› System creation
Q: for an example, which will require
approvals? Will approvals be
maintained?
Q: what still needs to be done to
generate revenues?
11. Very common belief that research $$
spent is the value
Economics analysis
› Value of sunk costs?
› If there is no recovery on
research costs value is ZERO
Costs can create a
real expectations
problem
12. Start-up Companies
Internal use
Traditional licensing:
› Rules of thumb
› Comparables
› ‘Scientific’ or ‘B School’ approaches
13. e.g.: VC invests $20M in seed capital in
company based on technology; subsequently
company generates $50M on an initial public
offering (IPO)
What is value of technology?
Analysis:
› What does university get out of the company?
› What do inventors get?
› Does university still share with inventors?
› Is there sponsored research coming in from
company?
14. Depends on each individual negotiation
› Is there a double dip? (i.e. both shares and a
royalty)
› Only real determinant is post dilution
percentage left
Some suggestion that technology value
may be as little as 1 or 2% pre-IPO
15. Two types:
› Institution wants to sell a product
› Technology to be added to defensive portfolio
Sales
› Isolated situations
e.g.: Isotope sales;
Medical instruments
› What to do with sharing
formulae?
How to calculate expenses
16. Technology will be added to portfolio to
enable some other technology or to overcome
‘patent thicket’
Good situation is ‘patent pooling’
› See: Parish and Jargosch, AUTM Journal 2003
› e.g. of MPEG pool
› Future of bio: Patenting to permit use; e.g. SARS
Bad situation is where company wants to use it
defensively
› Q: Can university even do this type of deal?
› What is appropriate price?
17. Rules of Thumb
› Usually based on specific industries
› May be confused with comparable rates
Most used Rule of Thumb:
› The Razgaitis Rule aka The Rule of Quarters
Need to be able to analyze what is the ‘incremental’
margin before G&A
Rule suggests that ¼ of that increment should be
licensors
In practice see anywhere from 10 to 50%
Best suited to clear commercial products
18. Before After
Sales – $100 $200
CGS – $50 $70
Margin – $50 $130
G&A – $20 $20
Net profit $30 $110
Incremental Margin $80; therefore, royalty would
be $20 or 10% of Sale Price
19. Q: of 3 examples, which is (are) suited to
‘Rule of Quarters’ analysis?
How to price the royalty?
The realities of the target industry
More information on this: LES
20. The 50% Rule:
› At point of product introduction, 50% of total
risk remains
› IF inventing org brings product to
introduction stage, entitled to 50% of profits
› Therefore, if commercializing org does part
of product introduction entitled to more than
50% of profits
More a starting position for discussions
21. Some industries have ‘standard’ rate
› Shrink-wrap software in 25 to 50% range
› Some types of pharmaceuticals
What is the base?
› Stacking royalties problem
How to get information on comparable
rates?
› Colleagues
› Subscriptions to Newsletters
22. More similar deals is better
But are the deals the same?
› Industry segments; Margins; Use of IP
› Licensing terms: exclusive; non; options
Risk analysis
› What is usual risk profile of our technologies?
Compared to industrially-generated
technologies?
Certainty analysis
› Similar to risk but one component separate:
certainty of measurement
23. Different types of Risk
› Technology: can we develop the
technology as envisaged
› Market: will the market adopt the
technology
› IP issues: will our IP protection hold up
› Societal Norms: will our technology
continue to be accepted?
24. Internet: Publicly-filed information like SEC
and SEDAR information
› www.sec.gov (look for EDGAR)
Court and other public records
› http://pacer.psc.uscourts.gov/
Specialty information
› www.10kwizard.com
› www.fda.gov
Company’s own websites and competitors
25. Leading Fed Ct decision
Court established factors to consider in
establishing a ‘reasonable’ royalty
15 Factors include:
› Existing royalty rates for licensor and licensee
› Exclusivity; territory; field of use
› Practice in licensing; relationship between
parties; potential related sales
› Duration and term of patent
1: Georgia-Pacific Corp. v. U.S. Plywood-Champion Papers, 318 F. Supp. 1116, (S.D.N.Y.
1970), modified, 446 F.2d 295 (2d Cir. 1971).
26. Discounted Cash Flow (DCF) and
Net Present Value (NPV)
Real options theory
Auctions
But first some arithmetic!
27. What are assumptions that go into a DCF or
NPV calculation?
› Market size
› Percentage of market
› Product price
› Royalty Rate
› Discount (interest rate)
How precise is any of these five
assumptions?
› The lowest of these is the most precision our
answer can have!
28. Using probability distribution, which is
best estimate of discount (interest) rate?
σ = small
29. Using probability distribution, which is
best estimate of discount (interest) rate?
σ = large
30. How much is 2 ± 3 times 5 ± 5 ?
› -1 x 10 ( -10) to 5 x 10 (+50)
More importantly, how much is:
times = ??
More simply: is the result the fat or skinny
distribution?
› Answer: it is an even broader distribution
31. If you’re lucky you have maybe 1 digit of
precision in your answer!
The best you are likely to get in precision is
order of magnitude
› i.e. $106 vs. $107
Any sensitivity analysis going to result in very
broad spread for the answer
Put both of these conclusions together:
› Value for just about anything is going to be
somewhere between minus $106 and plus $108!
32. Based on possible cash flows during life of
technology
› Usually patent life
Likely distribution:
33. Create Annual Cash Flows
› Market size
› Percentage of market
› Product price
› Royalty rate (or CGS)
Then need to establish the appropriate
discount rate
34. Relationship between rate of return and risk:
0
return
Company Ave Cost of Capital
Risk-free rate – T-bills + Inflation: ~7%
risk
35. Need to know appropriate average cost of
capital
Then add risk factors:
› Technology: can we develop the
technology
› Market: will the market adopt the
technology
› IP issues: will our IP protection hold up
› Societal Norms: will our technology continue
to be accepted?
39. Discount rate is market driven
AUTM TTM (Part X, Ch. 2)
› Low risk rates (known product): 15 to 20%
› New product, known manufacturing ability: 25% to
35%
› New product, new manufacturing, known business:
30% to 40%
› New business, product ready (no R&D): 40% to 50%
› New business, product needs R&D: 50% to 70% and
up
Q: for three examples, what discount rate?
40. Despite name not a ‘bet the bank’
strategy
Uses probability distributions to create a
new probability distribution
Hand calculation difficult
Software implementations:
› Crystal Ball: www.crystalball.com
› @RISK: www.palisade.com
41. Based on Black-Merton-Scholes options
analysis
Best example is stock market options
Why pay anything for an Oil future at $200
per barrel 12 months from now?
42. Actual formula:
Time sensitive
Also depends on volatility
› Volatility related to risk
› Risk up Volatility up Option value up
More information: Black-Scholes on
Wikipedia
43. Theoretically, the best way to obtain the
highest value
Depends on exposure to largest number of
potential buyers
cf. success of eBay
In patent field:
› Ocean Tomo – Summer 2009 IP Catalogue online
› Results from last auctions not like an Art Auction
Will grow over time as bidders understand process
Prediction: will become a larger force as
business understands IP better
44. You have prospects for
sales efforts
› From brainstorming markets
› From comparables research
You’re ready to negotiate
› You have ideas on:
Field and Territory of Use
Exclusivity or not
Comparable rates
etc. etc.
45. Richard has spent $500,000 developing a
new way of arranging an electric steel-
making furnace which increases the
efficiency. R approaches UniSteel about
licensing the technology.
UniSteel is interested and figures that they
will save about $100,000 per year in costs.
What issues would you consider in valuing
the technology?
46. M University has been asked by a new faculty hire, Professor Roe,
to take on the commercialization of a technology developed by
Professor Roe previously. The technology is currently 100% owned
by R Inc. which is, in turn, 100% owned by Prof. R and his wife. M is
being offered shares in R Inc. to take on the project.
The technology is a new means of measuring someone’s blood
alcohol level by a skin testing device. A prototype has been
developed by R Inc. at a cost of $50,000. It is expected that it
might cost $2,000 per unit to build a production model. The
current number of units of breathalyzers sold in North America is
4,000 per year at a retail cost of $2,500. There are two major
competitors.
What is an appropriate percentage of shares in R Inc. that M
Univ. should receive? What other information would you like to
receive? How would you obtain it?
47. You have heard that patent law’s ‘first sale doctrine’
does not allow you to collect ongoing royalties from
a machine that you sell outright.
You have invented a new patented machine for
conducting laser eye surgery. The machine has a
useful life of 10,000 operations which normally sell (by
the eye surgeon) for $900 per operation. The
machine costs you $175,000 to build and $40,000 per
year to maintain for the 10 years useful life of the
machine.
Discuss an appropriate sales or licensing strategy
and pricing model to maximize your financial returns.
48. Valuation is not an exact science!
Valuation can be a good start in getting
information you will need at various
stages of process
Remember the ‘long tail’!
The answer is likely going to be between
-$105 and $108 !