Tech Tuesday Bryan Ritchie, Executive Director, TVC March 10, 2015

Commercialization at the U “Throw it over the wall”“Startup” Future “Growth” IP Protection at all costs Form Companies Process and Systems Add Value Task Objective Kickstart Ecosystem Defend Interests, license to existing companies 2014 “Champion” Run the Company Take to First Funding and Capable Management

New Startups

4 Leading innovators and cancer centers Institutions were selected based on an analysis of~140 AMCs* to represent a mix of Efficiency and Financial Success... * Analysis based on AUTM data; only top 35 are graphed ** Efficiency = Avg. Research Exp. per Invention Disclosure Ranking + Avg. Research Exp. per Startup Ranking + Avg. Research Exp. per Patent Application Ranking *** Financial Success = (Average Income per Active License Ranking Source: AUTM Licensing Survey 2007, PwC Analysis

Number of Disclosures Millions of Federal Research Dollars CalTech MIT Some Surprises

An Interesting Truth about Tech Transfer Returns

Where is Commercialization Today? Questions for University of Utah: What about everything else? –Cross university bundling/startup –Litigation? –Internal, wholly owned subsidiaries The “Bigs”… –Columbia –Stanford –WARF –Cal Tech –University of Utah …trying to figure out where to go next… U of U ranked number 4 by Nature after U of Cal system, U of Washington, and U Penn for life science output

Licensing to Existing Companies University of Utah Stats: 77% total average revenue from startups since ’81 82% average revenue from startups over last 10 years 1.Columbia 2.Washington 3.Arizona 4.Florida 5.University of Utah All report ZERO significant deals with non-health care fortune 500

Transitions from idea to financial return Disclosures to licenses: 5785/969 = 16.75% Licenses with any revenue: 62.85% Licenses with R or E revenue: 15.07% Licenses with any revenue over 100K: 8.46% Licenses with R or E revenue over 100K: 3.1% Licenses with any revenue over 1m: 1.44% Licenses with R or E revenue over 1m: 1.24% –1.21% of technologies disclosed are associated with licenses that generated over $1m

TVC Licenses Producing Revenue

Time to Market Average today is 2.19 years from disclosure to revenue

U of U: Bumping against constraints Despite high ranking and great progress: Revenue sources not diversified Revenue timing is lumpy Difficult to leverage outside “seed” capital The “Founder to Operator” gap –Internal conflicts of interest –Compensation Consultant dilemma Employee equity dilemma

What is it? What is the Opportunity? Validation and critical path forward Funding and other resource allocation Execute

1. Technology Disclosed 2. Milestones 3. Milestones Met What is it? Opportunity? How to address it? Stage Gate Decision options: 1.Move to 4 Cylinder 2.Release to Inventor 3.Await more technical development

Vetting, Validation – Business Model Gen. 1. Technology begins 4- Cylinder phase 2. Testing Assumptions and Advancing the Technology 3. Seek funding TVC 6. REPEAT WITH OTHER TECHNOLOGIES 4. Repeat 5. Milestones met External Input InvestorsEntrepreneurs Subject Matter Experts

License and Commercialize 1. Technology moves to the hands of licensee 2. TVC engages licensees (ongoing) 3. Milestones Met/ Successful Commercialization

Current Commercialization Normal TTO Value-Add Level Engine Funding TVC Value-Add UURF ROI Difficulty engaging Mgt. Value Growth Value of Technology Value Not Captured Value Captured Value NOT Captured Sweet Spot for UURF to engage outside Mgt. Univ. Invention Commercialization Typical TVC Management engagement

What is Needed to Move Forward? More money? Better Operators? Better Ideas? Better Protection? Derisking Partners!! –Biggest pain is finding right people to lead the venture –Everything else follows