University Startup Best Practices Presentation for Technology Transfer Tactics April 15 th, 2009

About Us InnovateTech Ventures specializes in technology transfer services including venture creation The company identifies technologies at research institutions, spins them out into startup companies and holds equity until a liquidity event InnovateTech focuses on Information Technology, Software and Electronics opportunities particularly in the Mid-Atlantic Region The company assist clients with technology transfer strategy and execution

University Startups The National Council on Entrepreneurial Tech Transfer web site contains the following statistics: 20 year returns for Early/Seed VCs was 20.6%, compared to 13.8% for Later Stage VCs and 8.2% for the S&P percent of all university startups go public, in comparison to a "going public rate" of only 0.07 percent for other U.S. enterprises - a 114x difference More than 400 university startups are created nationally each year based on federally funded R&D, which included Google, Netscape, Genentech, Lycos, Sun Microsystems, Silicon Graphics, and Cisco Systems 68% of university startups created between 1980 to 2000 remained in business in 2001, while regular startups experienced a 90% failure rate during that same time period

Key Variables Key factors in predicting success Market and product opportunity Management Funding Key factors in predicting success Market and product opportunity Management Funding Startup categories Lifestyle Bootstrap Venture Capital track Startup categories Lifestyle Bootstrap Venture Capital track

Hypothetical Companies Greenway Education Bluezuke Software InotexTechNanobine Pharma Limited IP Professor company Services Lifestyle business Valuable issued patents Inventor less critical Options to license to large companies Multiple patent applications Inventor critical High risk Will need venture capital One patent filed External entrepreneur Bootstrap startup

Day 1 – Opportunity Knocks Greenway Education Bluezuke Software InotexTechNanobine Pharma Assessing the opportunity Walk in opportunities vs. recruiting an entrepreneur? What are the odds of success? What are your alternatives? Assessing the opportunity Walk in opportunities vs. recruiting an entrepreneur? What are the odds of success? What are your alternatives?

Day 1 – Opportunity Knocks Greenway Education Bluezuke Software InotexTechNanobine Pharma Helping the startup Finding management Business planning and advice Funding Helping the startup Finding management Business planning and advice Funding

Day 60 – Negotiating Greenway Education Bluezuke Software InotexTechNanobine Pharma Key considerations OTT goals Cash, equity growth, university support? Inventor role? Key considerations OTT goals Cash, equity growth, university support? Inventor role?

Day 60 – Negotiating Greenway Education Bluezuke Software InotexTechNanobine Pharma Deal terms Issues with cash drains Equity provisions and board positions Challenging terms Antidilution Threat of revocation Assignment constraints Deal terms Issues with cash drains Equity provisions and board positions Challenging terms Antidilution Threat of revocation Assignment constraints

Day 90 on – Post deal Greenway Education Bluezuke Software InotexTechNanobine Pharma Considerations Let investors lose sleep How to keep helping the startup Term revisions When the startup is failing Exits Considerations Let investors lose sleep How to keep helping the startup Term revisions When the startup is failing Exits

Summary University startups can be a valuable part of your commercialization portfolio Key take-aways: Understand the different types of startups and their needs Push for the appropriate management experience level for the type of startup Think of the investors perspective on licensing terms Let professional investors lose sleep over the startup