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

Slide 2 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations 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

Slide 3 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations 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

Slide 4 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations 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

Slide 5 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations Ingredients for Startup Business Creation Technology Capital Management Implementation Plan

Slide 6 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations Wisconsin Resources for Startup Creation Technology Capital Management Implementation Plan

Slide 7 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations 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 and operational role (investment, incubation, management)

Slide 8 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations Startup Development at UW Madison: A Blend of “Hands-on” and “Hands-off” Flexible Licensing Terms Progressive University Policies Business Developmt Assistance Assist in Recruiting Talent Assist in Recruiting Funding Participate in Business Operations Direct Investment “Hands-in- Pocket” “Hands- Off” XXxxx “Hands- On” XXXXX “Up-to- your- Elbows” XXXXXXX Roles in Formation Roles in Operations

Slide 9 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations 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

Slide 10 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations Resources at UW-Madison to help Startup Businesses Pre-startup initiativePost-startup initiative Assistance Consultation/referrals (OCR) Gap funding (I&EDR) Short courses (TBDI) Licensing assistance (WARF) Planning/analysis (WAVE) Business incubation (URP) Mentoring program (pending) Micro-grants program UW Library access point at Univ. Research Park Events Tech Transfer Seminar Series (Graduate School) High Tech Happy Hour (OCR, et al) Entrepreneurship Association Ad Hoc events (various) Early Stage CEO Breakfasts First Look Investor Forums WARF Gilson Series Seminars WARF Gilson Researcher Roundtables (Nov05) Publications Entrepreneurship resources website (OCR) SBIR/STTR support website (DOC) Guide to new business ventures UW- Madison Inventing Wisconsin DVD

Slide 11 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations 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

Slide 12 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations The UW-Madison is Only Part of the Solution State-wide Institutions - Department of Commerce - Wisconsin Technology Council - Wis Entrepreneurs Network - Wisconsin Angel Network University Resources - OCR - WARF - URP - UW-TEC - WAVE - TBDI - TechSearch Industry Infrastructure Service providers to Hi-tech companies -Legal -Accounting -Business planning -Search/recruiting -Insurance -Public relations - Facilities/equipment - Prototyping shops Financial Resources - Friends and family - Grants (SBIR/STTR) - Angels - Venture Capital - Corporate Partnering - Banks Networking Organizations WIN – WBMA –Accelerate Madison

Slide 13 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations 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

Slide 14 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations In summary… We need to move from this Technology Capital Management Implementation Plan

Slide 15 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations ……to This Technology Capital Management Implementation Plan

Slide 16 May, 2006Prepared by Allen Dines, Asst. Dir. Corporate Relations For more information: My Startup Guide: OCR Entrepreneur’s Page: WARF Startups Webpage Graduate School Commercialization Grants SBIR/STTR Information Regional Hi-Tech News, Commentary & Analysis