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

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

Jeff Greenberg, CEO

Tech Coast Works

October 18, 2007


Rising above the gathering storm in the oc business incubation initiatives presented to

National Academy of Sciences Convocation, Fall 2006

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

  • 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)

Enhancing economic growth in Orange County:

  • New business incubation

  • Collaborative R&D

  • Leveraging investment capital, services and business resources


Ocbin connections

OCBIN-Connections

  • 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

  • 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

  • Technology scouting

  • Incubating new company technologies

  • Collaborative R&D

  • Accessing UCI and the UC system resources


Tech coast works

Tech Coast Works

  • Second OCBIN Incubator:Information & Computer Science

  • LLC formed

  • CEO Jeff Greenberg

  • One company in operation

  • Three additional companies being evaluated


The incubation ecosystem

Sponsors

Service

Providers

Investors

Corporate

Partners

Economic

Development

The Incubation Ecosystem

Tech

Coast Works

Portfolio

Company


The incubation process

The Incubation Process

  • 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

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

  • 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

  • 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

At Risk Patent Filing

ResearchLab

Invention

UCDG $

Future Rights from Research

Future Rights from Research

Research $

Research $

Option/License

$

Sales & Service Agmt

Proprietary Rights

Matching Grant Proposal

UC Discovery Grant $

NewCompanyVirtual

RealCompanyPhysical

Sublease

FederalAgenciesSBIR STTR

Business Plan

Research Proposal

Matching Grant Proposal

$

UCDiscoveryGrant

Funding Sources

Technology Accelerator Model

OTA

$

Seed Funds


Technology accelerator model continued

Technology Accelerator Model (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 (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 (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

  • 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!!

www.ocbin.org


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