Rising Above the Gathering Storm in the OC: Business Incubation Initiatives
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Rising Above the Gathering Storm in the OC: Business Incubation Initiatives Presented to: Licensing executive Society, Orange County By David Schetter Assistant Vice Chancellor for Research UCI Office of Technology Alliances Greg Ruehle, CEO Orange Coast Medical ventures

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Rising Above the Gathering Storm in the OC: Business Incubation Initiatives

Presented to:

Licensing executive Society, Orange County


David Schetter

Assistant Vice Chancellor for Research

UCI Office of Technology Alliances

Greg Ruehle, CEO

Orange Coast Medical ventures

Jeff Greenberg, CEO

Tech Coast Works

October 18, 2007

National Academy of Sciences Convocation, Fall 2006 Incubation Initiatives

Theme: U.S. global competitivenss

Focus: “Rising Above the Gathering Storm” report

Challenge to participants: Recommend one action your community could take within the next six months that would address the issues in the Report

Attendees: VP level executives from Orange County industrial firms, civic leaders, UC Irvine executives, community members, California Governor’s Office Rep

Primary Recommendation:

Orange County needs more business incubation

Ocbin task force membership
OCBIN Task Force Membership Incubation Initiatives

  • Allergan

  • Aubrey Group

  • Boeing Space Exploration

  • Coronis Medical Ventures

  • Cresa Partners

  • Edwards Life Sciences

  • Fish & Associates

  • Infologic, Inc.

  • Irvine Chamber of Commerce

  • National Genecular, Inc.

  • Northrop Grumman Space Technology

  • OCTANe

  • Orange County Business Council

  • Orange County Treasurer

  • Pacific Ridge Capital

  • Research Corporation Technologies, Inc.

  • Southern California Edison

  • UCI Paul Merage School of Business

  • University of California, Irvine

  • Versant Ventures

Orange county business incubation network ocbin
Orange County Business Incubation Network (OCBIN) Incubation Initiatives

Enhancing economic growth in Orange County:

  • New business incubation

  • Collaborative R&D

  • Leveraging investment capital, services and business resources

Ocbin connections
OCBIN-Connections Incubation Initiatives

  • Secure communications for matching vetted start-ups with VCs and qualified service providers (screening process)

  • Start-ups access “best in class” on most favorable terms

  • Sponsorships by OCBIN-Connections members with visibility on www.OCBIN.org

Business incubation resources
Business Incubation Resources Incubation Initiatives

  • Accounting and Financial

  • Business Development

  • Economic Development/Assistance

  • Educational Institutions in SoCal

  • Facilities & Lab Equipment

  • Funding (Angel, VC, Government)

  • Human Resources

  • Incubators and Centers

  • Legal Resources

  • Real Estate

  • Research, Development, CROs

  • Technology Licensing

  • Trade Associations

Ocbin corporate partners
OCBIN Corporate Partners Incubation Initiatives

  • Technology scouting

  • Incubating new company technologies

  • Collaborative R&D

  • Accessing UCI and the UC system resources

Tech coast works
Tech Coast Works Incubation Initiatives

  • Second OCBIN Incubator:Information & Computer Science

  • LLC formed

  • CEO Jeff Greenberg

  • One company in operation

  • Three additional companies being evaluated

The incubation ecosystem

Sponsors Incubation Initiatives








The Incubation Ecosystem


Coast Works



The incubation process
The Incubation Process Incubation Initiatives

  • Pre-Incubation

    • Identification of Incubation Prospects

    • Vetting of Incubation Prospects

  • Incubation

    • Seed Capital Provided by Incubator Fund

    • Mentoring by Incubator Staff and Advisors

    • Support from Service Providers

    • Transition from Technology to Product

    • Series A funding as needed

  • Post Incubation

    • Continued Growth

    • Pursuit of Exit Strategy

Incubation business models
Incubation Business Models Incubation Initiatives

License-in/ Acquire Technology

Sub-License Technology to Customers

Improve Technology

Productize Technology

Open-Source: Provide Services

Sub-License Technology to Customers

Sell Products via Channel or Direct

Advantages of incubation
Advantages of Incubation Incubation Initiatives

  • Inventors Retain Control of Technology

  • UCI and Inventors Increase Revenue Share

  • Inventors Can Focus on Technology

    • Mentors Provide Guidance

    • Additional Assistance from Service Providers

    • Funding Provided as Needed

  • Economic Development Stays Local

Uci technology accelerator model for start up companies
UCI Technology Accelerator Model for Start-up Companies Incubation Initiatives

  • Company founded on optioned/ licensed UCI technology and pre-seed capital

  • Initial non-dilutive funding SBIR, STTR and UC Discovery Grants

  • Provides for early stage technology development, leveraging UCI resources

  • A web of agreements between the start-up company and UCI:

    • Sponsored/collaborative research, license/option, Material Transfer Agreements, Sales & Service, sublease, gifts, consulting, subleases

    • All standard terms with no exceptions to policy

    • Management and integration of agreements is key

Technology accelerator model

UCI Incubation Initiatives

At Risk Patent Filing




Future Rights from Research

Future Rights from Research

Research $

Research $



Sales & Service Agmt

Proprietary Rights

Matching Grant Proposal

UC Discovery Grant $




FederalAgenciesSBIR STTR

Business Plan

Research Proposal

Matching Grant Proposal



Funding Sources

Technology Accelerator Model



Seed Funds

Technology accelerator model continued
Technology Accelerator Model Incubation Initiatives(continued)

Conflict of Interest Review

  • “Without conflict there is no interest” (Conflicts can exist but must be managed)

  • Review of financial interests (income, stock, board or management position)

  • Percent equity holding allowed for UC founder based on stage of financing and dilution

  • Board membership discouraged and no tolerance for management position – can serve on the Scientific Advisory Board but not as chair

Technology accelerator model continued1
Technology Accelerator Model Incubation Initiatives(continued)

Sponsored Agreement Terms

  • Full UCI overhead

  • “Improvement inventions” rolled into license/option at no additional charge

  • New inventions in the “Field” added to license/option for one-time fee

  • First right to negotiate a license to new inventions outside the Field

Technology accelerator model continued2
Technology Accelerator Model Incubation Initiatives(continued)

Move to Non-virtual Status

  • Company does strategic partnership with larger company including research funding, sublicense and co-development milestones

  • UCI receives “attributed income” share of company partnering revenue and liquidity events

  • Company raises next round of capital, moves out of virtual phase to own facilities & carries out product development, production & sales

  • UCI receives license revenue on milestones and net sales

Follow up actions
Follow-up Actions Incubation Initiatives

  • Refer possible start-ups for the incubators

  • Request to be listed as an OCBIN resource

  • Apply to become an OCBIN preferred service provider and sponsor

  • Join the OCBIN Corporate Partners Program

Thank you for attending
Thank you for attending!! Incubation Initiatives