Technology Commercialization at Georgia Tech
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Transcript of Technology Commercialization at Georgia Tech
© 2008, Georgia Institute of Technology
Technology Commercialization
at Georgia Tech
Stephen FlemingChief Commercialization Officer
7/14/08 Technology Commercialization at Georgia Tech 2
Stephen Fleming
• 13+ years venture capital investment experience.–General Partner, Alliance
Technology Ventures.–18 investments as lead
investor, 15 exits to date.
• BS, Physics, Ga. Tech (Highest Honors).• 15 years operational experience at AT&T Bell Labs,
Nortel, LICOM (venture-backed startup).–Supervised startups developing first ADSL modem and one of the
first cablemodems in early 1990s.
• Multiple advisory boards at Georgia Tech; endowed chair in telecomm; occasional instructor in MBA entrepreneurship program.
• Strong regional technology leader.
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Organization Chart
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U.S. Economic Challenges
• Globalization, “Flattening of the world” means the U.S. can’t compete as in the past.
• Innovation is essential to creating revolutionary products & processes
• 2005 Georgia Manufacturing Survey underscored importance of innovation.
• Companies competing on innovation:–Reported return on sales 50% higher than
others–Paid wages 30% higher than others–Were 40% less likely to lose work to
outsourcing than others
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“Innovation U.” Report
“Virtually every combination of industry relationship or economic development activity can be found at Georgia Tech, and in a very real sense, the university is an operating partner with Georgia state government in the implementation and management of a variety of technology-focused initiatives. Perhaps more than any other research university in North America, economic development is an integral, critical component of the mission of the Georgia Institute of Technology, and this has been true from its very inception.”
–Southern Growth Policies Board, 2002
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Building an Ecosystem
41
Nutrients
Signs of Life
GrowthIncubation
Renewal
NaturalSelection
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National Rankings
U.S. News & World Report, America’s Best Engineering Graduate Schools 20081. Massachusetts Institute of Technology
2. Stanford University
3. University of California — Berkeley
4. Georgia Institute of Technology
5. University of Illinois — Urbana-Champaign
6. California Institute of Technology (CalTech)
7. Carnegie Mellon University
8. University of Southern California (USC)
9. Cornell University
tie University of Michigan — Ann Arbor
http://grad-schools.usnews.rankingsandreviews.com/grad/eng/search
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National Rankings
U.S. News & World Report, America’s Best Engineering Graduate Schools 2008
Strength across the board!
Aerospace #4
Biomedical #2
Chemical #13 Industrial #1 17 years!
Civil #6 Materials #8
Computer #7 Mechanical #7
Electrical #6 Nuclear #9
Environmental #6 Petro/Mining not offered
7/14/08 Technology Commercialization at Georgia Tech
GT Research Distribution
Approx. half a billion dollars total R&D on campus for FY2008!
9
College ofEngineering
GTRI
College ofSciences
Research Centers
College ofComputing
Other
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Nutrients
• Recruiting research talent—worldwide
• Georgia Research Alliance (GRA)–Eminent Scholars–Facilities/equipment
• Reinventing academic disciplines–College of Computing–Emory/GT Biomedical
Engineering Dept.
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Signs of Life
• Emphasis on interdisciplinary research
• Research centers –Over 100 on campus,
from textiles to nanoscience
–MARC, MiRC, GEDC, Broadband Institute, GTEC Tissues, etc.
• GRA Phase Zero awards
# patents1 390 University of California (system)2 136 Massachusetts Institute of Technology3 101 California Institute of Technology4 90 Stanford Universitytie 90 University of Texas5 77 University of Wisconsin6 71 John Hopkins Universitytie 71 University of Michigan7 64 University of Florida8 57 Columbia University9 43 Georgia Institute of Technologytie 43 University of Pennsylvania10 41 Cornell University
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Patent Ranking
U.S. Patent & Trademark Office, Calendar Year 2005 (last year available)
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Natural Selection
• Intellectual property protection (OTL)
• VentureLab–Business plan–Management–Money
• GRA Phase I and II awards
• GT Edison Fund• SBIR Assistance
Commercialization Services
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Intellectual Property Goals
• Reward the faculty for creation of valuable IP• Support innovation
• Strengthen research programs• Strengthen global reputation• Attract top-quality faculty & students• Fulfill tech-transfer obligations
• Add value to intellectual property• Strengthen industry relationships• Create successful entrepreneurs• Strengthen local technology community
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Income Distribution
15
0%
33%
66%
100%Fir
st $
25
00
$500K $1M+
Georgia TechResearch Corp.
Inventor(s)
Academic Unit(s)
$2,500
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Converging Challenges
• Increasing number of disclosures drives overall demand
• “The World is Flat” –Increasing GT demand for overseas filings
• Drives patent cost from ~$15K to ~$100K
–Increasing competition for research partnerships from overseas universities
• Increasing ratio of biotech at GT (requires overseas protection)
• Potential USA shift from “first to invent” to “first to file”
• USTPO proposed limitations on claims, etc.
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IP Mgmt./Evaluation
InventionDisclosures
Dept. Chairs /Deans / GTRI
TechnologyEvaluation
Path?
Rights toFaculty?
Initiate IP Prot.
Need more information / development
MarketEvaluation
TechnologyAnalysis
ProtectIP?
MarketAnalysis
PatentApplication
ExternalCounsel
$
...continued
Export Control
Industrial Contracts
Screens
Responsibility
GTRC
EI2 / CS
$ $
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IP Business Development
Rights toFaculty?
VentureLab Tech. Marketing
Path?
Startup / Spinout Industrial License
Consulting
GeorgiaResearchAlliance
$
Licensee? Rights toFaculty?
Funding& CEO?
Term Sheet Negotiation
Rights toFaculty?
LicenseNegotiation
ComplianceReview
StandardTemplates
...continued
Responsibility
GTRC
EI2 / CS
MarketingWhite Paper
External Counsel
BusinessPlan
Conflict ofInterest Plan
StandardTemplates
COI Review
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Royalty Collection Monitoring
Compliance / LitigationPatent Maint. & Defense
IP Licensing/Compliance
License
LicenseNegotiation
Startup / Spinout Industrial License
Startup Formed
Incubator?
SuccessfulStartup
ATDC orEmTech Bio
IndustrialPartner
Responsibility
GTRC
EI2 / CS
Distributionof Payments
Inventor(s)
Academic Department(s)
GTRC
PortfolioLIquidation
$
Royalties & etc.Equity
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IP Business Development
VentureLab
Rights toFaculty?
Tech. Marketing
Path?
Startup / Spinout Industrial License
Consulting
GeorgiaResearchAlliance
$
Licensee? Rights toFaculty?
Funding& CEO?
Term Sheet Negotiation
Rights toFaculty?
LicenseNegotiation
ComplianceReview
StandardTemplates
...continued
Responsibility
GTRC
EI2 / CS
MarketingWhite Paper
External Counsel
BusinessPlan
Conflict ofInterest Plan
StandardTemplates
COI Review
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VentureLab
• Founded September 2001–Now a model for other universities–Part of Enterprise Innovation Institute
• Reports up through Office of the Provost
• Faculty-focused process –Risk identification and mitigation–Venture-backable innovations
• Goal: Successful startup companies based on Georgia Tech research
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VentureLab
MarketMilestonesMeetingsManagementMoney
22
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Market: Business Plan
• Classic startup questions—Who, What, Where, When, Why, How:–Who is the customer?–What is the pain they are trying to eliminate?
• Candy, vitamin, or painkiller?–Why is your technology the right answer?–Where (geographically) are your customers?–How much are they willing to pay?–When will effective competition emerge? –What are the growth trends?–What is the right sales channel?–Who are potential partners? Exit through M&A?
23
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Milestones: Business Plan
• It’s far too easy to focus on the technology promise, and ignore the “details”:–When will you have a prototype?–When will you have a beta test?–When will you have a paying customer?–How many people do you need to hire?–When will you hire them?–How much money do you need at first?–When does that run out?–How much will you need after that?–How do you know when you are winning?
24
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Meetings
• Launching a startup company is a team sport!• VentureLab can introduce you to:
25
Angel investors
Venture capitalists
Government grantors
Business advisors
Potential employees
Beta customers
Corporate partners
Regulatory experts
Bankers
Accountants
Corporate lawyers
Patent lawyers
Recruiters
Marketers
Consultants
and more...
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Management
26
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Dealing with Universities
• Teaching a professor how to be an entrepreneur is like teaching a cat to swim:–It can be done.–You will lose blood.–You’ll never be satisfied with the results.–You will annoy the cat.
• Different motivations, different priorities, different views of “proper procedure”
• Best bet: Recruit an entrepreneur to work with the professor. 1+1=3.
27
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Money
28
Assistance with small-business grants from eleven Federal agencies.
Grants and loans to startups based on Georgia university research.
Equity investments in startups with a connection to Georgia Tech.
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Georgia SBIR Assistance
• Small business R&D funding available from eleven Federal agencies–NASA, DOD, DOE, NIH, EPA, etc.
• Grants, not loans or equity!• For help with SBIR and STTR process, visit <http://www.innovate.gatech.edu/sbir>.
• Up to $850K availableacross two phases ofdevelopment
29
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Georgia Research Alliance
• Recruiting Eminent Scholars from all over the world to Georgia
• Investing in university capital equipment–Over $600 million in last 15 years
• Innovation grant program–Phase 1: up to $50K to university R&D–Phase 2: up to $100K to university (must be
matched—equity, SBIR, sale of services, etc.)–Phase 3: up to $250K loan to company (must be
repaid upon success or leaving Georgia)
30
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GRA Matching Funds
•Provides up to 4:1 non-dilutive leverage for initial outside investment:
Equity, Other Grants, etc.
Phase I $50K grant to university
Phase II $100K validation investment
$100K matching grant to univ.
Phase III $250K loan
Total $100K $400K
7/14/08 Technology Commercialization at Georgia Tech
GRA Venture Fund
• Approved by Georgia legislature in April ’08.• State invests $7.5M as anchor to $30M+
early-stage venture fund.• State tax credit established as incentive to
private (3:1) investors.• Can invest in equity or debt in VentureLab
graduate companies.–University intellectual property–VentureLab business discipline
• Target: $1M+ per deal.
32
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GT Edison Fund
• Newly-launched program to encourage invention and innovation.
• Funded by charitable gifts from GT alumni, foundations, friends of the university.
• Early-stage equity prior to angel or venture capital investments.
• Still primarily in fundraising mode, but has made a single initial investment (4Q2007).
33
✓7/14/08 Technology Commercialization at Georgia Tech
VentureLab
MarketMilestonesMeetingsManagementMoney
34
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VentureLab Projects (current)
http://www.gtventurelab.com
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VentureLab Graduates
May 2008
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Incubation
• Advanced Technology Development Center (ATDC)
• GRA Phase III loans• Ga. Seed Capital Fund• Minority Business
Enterprise Center
• National VC attention• Centers of Innovation
–Statewide tech areas
Entrepreneur Services
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ATDC Member Profile
• Protecting the brand by being selective in admitting new members.
• Historically, only 1 out of every 9 applicants is accepted.
• Early stage company with unique technology differentiator.
• Product-based (no service companies).• Demonstrate a competitive advantage and high
growth potential.• Attractive to external financing.• Coachable, community-oriented founders.
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ATDC Offerings
Consulting –Strategic business advice
Community–Interaction with other entrepreneurs
Connections–Connections to people and resources
Centre –Facilities designed for startups
Credibility –Instant recognition
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Thriving Community
Multiple technology centers.
Anchored by: Atlanta, Research Triangle, Florida.
Pockets of innovation: Universities, Federal R&D centers.
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Technology in Southeast
Biggest challenge: Lack of local venture capital.
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Attractive Targets in SE
Silicon Valley
NewEngland
NY Metro
Southeast8%
Texas
SoCal
Midwest
Other
Source: MoneyTree Survey, 1998-2003
• Local startups have demonstrated consistent potential to attract investment dollars.
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VC in the Southeast
1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: PWC MoneyTree
Quar
terly
VC I
nve
stm
ent
($Bill
ions)
Venture capital investments in the U.S., by quarter
2004 2005 2006 2007
5
10
15
20
25
30
Total Venture Capital Investment
Investment in the Southeast U.S.
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VC in the Southeast
1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: PWC MoneyTree
Quar
terly
VC I
nve
stm
ent
($Bill
ions)
2004 2005 2006 2007
5
10
— off scale — Total Venture Capital Investment
Investment in the Southeast U.S.
Southeast: steady state of less than $500M/quarter
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Regional Capitalization
• Local venture firms do not offer adequate leverage for local R&D.
0
5
10
15
20
25
30
35
40
45
Bay Area Northeast Southeast
University R&D ($B)
Venture Investment ($B)
1.6 ×
9 ×
21 ×
Substantial room for improvement!
Source: Venture Economics and the Center for R&D
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Growth: Industries
• Industry Services–Business consulting for
competitiveness, quality, lean mfg, etc.
–Environmental, energy–Gov’t procurement–Strategic business
services & analysis• Designed to help
Georgia companies compete in the global marketplace
Industry Services
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Helping Mature Industries
Simplex Nail
…with Ga Tech Ind. Services:
• Cut inventory costs by 52%
• Resumed production in all of its product lines
• “We are alive because of it. Our cash flow all around has improved and our production is more efficient.” – Plant Manager Jeff Kurtz
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Growth: Communities
• Community Policy & Research Services
• Bringing innovation to local and state government entities
• Technology-based research and policy projects –Local economic
development–Balanced growth–SustainabilityCommunity Policy & Research
Services
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Cycle of Renewal
• Serves as a bridge to Georgia Tech services and resources–Expand interaction with
key local, state, national and international corporations
–Seminars, workshops & technology briefings
–Access to test beds, research labs
Strategic Partners Office
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Cycle of Renewal
• Successful companies–Sponsoring research–Hiring GT graduates–Spinning off new
companies
• Successful graduates–Charitable giving–Angel investment–Mentoring
• More nutrients for the ecosystem!
Klaus Advanced Computing Bldg.
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Building an Ecosystem
Nutrients
Signs of Life
GrowthIncubation
Renewal
NaturalSelection
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For Further Information
Stephen FlemingChief Commercialization OfficerGeorgia Institute of Technology
Personal blog: <http://www.academicvc.com>
<http://innovate.gatech.edu/commercial/>
Project database and staff blog: <http://www.gtventurelab.com>
(404) 385-2360
Download this file at <http://www.gtventurelab.com>