University of Wisconsin-Madison New Business Startup Initiative

1. University of Wisconsin-Madison New Business Startup Initiative Allen J. Dines Assistant Director Office of Corporate Relations May 2006

2. Madison: a “Hotbed of Biocapitalism” • Some highlights about Madison from Forbes Magazine (May 2004): • In the past 10 years, 120 new tech companies employing 8,000 people • Average salary $60,000. 2% unemployment vs. 5.5% for country. • University employs 17,000 but helped create 70,000 jobs, generating $4.7B in direct and indirect output. (NorthStar Economics) • 2% of Madison’s population hold advanced degrees – the highest concentration of advanced degrees in the country Prepared by Allen Dines, Asst. Dir. Corporate Relations

3. UW Research and Company Formation Metrics • 235 companies spun out of UW-Madison* • Aggregate gross revenues exceed $1billion • 98% still in Wisconsin • About 50% have received professional investment • Examples of wealth created by local startups: • Bone Care > Genzyme ($600 mil) • Tetrionics > Sigma Aldrich ($85 mil) • Pan Vera > Aurora/Invitrogen ($90 mil) * Source: P. Z. Sobocinski, Creating High Tech Business Growth in Wisconsin, 1998, updated, 2005 Prepared by Allen Dines, Asst. Dir. Corporate Relations

4. Why License University Technology to Startups • Many technologies are too early or risky to attract established companies • Inventor interest • Promote local economic growth • Promote ties to local hi-tech business for sponsored research • Possible financial rewards Prepared by Allen Dines, Asst. Dir. Corporate Relations

5. Ingredients for Startup Business Creation Technology Capital Implementation Plan Management Prepared by Allen Dines, Asst. Dir. Corporate Relations

6. Wisconsin Resources for Startup Creation Technology Capital Implementation Plan Management Prepared by Allen Dines, Asst. Dir. Corporate Relations

7. Models for University Startup Development Hands-in-pocket: Traditional policies and practices Hands-Off: Policies / practices that encourage start-ups Hands-On: University takes active role in forming the startup as a licensee Up to your Elbows: University takes active formation andoperational role (investment, incubation, management) Prepared by Allen Dines, Asst. Dir. Corporate Relations

8. Startup Development at UW Madison:A Blend of “Hands-on” and “Hands-off” Roles in Formation Roles in Operations Prepared by Allen Dines, Asst. Dir. Corporate Relations

9. The players in UW-Madison Startup Business Development • Office of Corporate Relations • Assists startups with business connections • Provides faculty/staff with single point of entry access to UW resources • Overall program focus, integration and communications • WARF - Patents, licensing, guidance, leadership • University Research Park • Encourages partnerships between business and UW researchers • Provides a place to grow for UW-related businesses • School of Business • Weinert Center for Entrepreneurship • Business Technology Development Institute • Campus-wide resources • UW Technology Entrepreneurship Cooperative • Wisconsin TechSearch • Entrepreneurship Association Prepared by Allen Dines, Asst. Dir. Corporate Relations

10. Resources at UW-Madison to help Startup Businesses Prepared by Allen Dines, Asst. Dir. Corporate Relations

11. WARF Startup Development Support • WARF/OCR Startup Initiative Partnership • Disclosure reviews to identify startup opportunities early • Historical mechanism: Inventor/faculty driven • Current focus: market-opportunity driven • Licensing • Standstill pending license • Equity in lieu of cash license deals • Follow up monitoring/support • Gilson entrepreneurship seminar series and research roundtables Prepared by Allen Dines, Asst. Dir. Corporate Relations

12. The UW-Madison is Only Part of the Solution State-wide Institutions - Department of Commerce • Wisconsin Technology Council • Wis Entrepreneurs Network • Wisconsin Angel Network Industry Infrastructure Service providers to Hi-tech companies -Legal -Accounting -Business planning -Search/recruiting -Insurance -Public relations - Facilities/equipment - Prototyping shops University Resources - OCR - WARF - URP - UW-TEC- WAVE • TBDI • TechSearch Financial Resources - Friends and family - Grants (SBIR/STTR) - Angels - Venture Capital - Corporate Partnering - Banks Networking Organizations WIN – WBMA –Accelerate Madison Prepared by Allen Dines, Asst. Dir. Corporate Relations

13. Working Conclusions on How to Foster Startups • Connect faculty inventors early with • Management-savvy risk-takers (entrepreneurs) • High-tech-savvy service providers • Focus on the business opportunity, not the technology innovation • Cultivate angels and VCs seeking seed stage investments • Manage faculty/inventor expectations Prepared by Allen Dines, Asst. Dir. Corporate Relations

14. In summary…We need to move from this Technology Capital Implementation Plan Management Prepared by Allen Dines, Asst. Dir. Corporate Relations

15. ……to This Technology Capital Implementation Plan Management Prepared by Allen Dines, Asst. Dir. Corporate Relations

16. For more information: • My Email: ajdines@wisc.edu • Startup Guide: http://www.corprelations.wisc.edu/docs/startupguide.pdf • OCR Entrepreneur’s Page: http://www.corprelations.wisc.edu/entrepreneurs.html • WARF Startups Webpage http://www.warf.org/inventors/index.jsp?cid=16 • Graduate School Commercialization Grants http://info.gradsch.wisc.edu/research/techtrfgrants/grantopps.html • SBIR/STTR Information http://www.wisconsinsbir.org/ • Regional Hi-Tech News, Commentary & Analysis http://wistechnology.com Prepared by Allen Dines, Asst. Dir. Corporate Relations