Enterpreneurship: Commercializing Technolgies Taking Research from the Lab to the Real World: Is Having a Good Idea Enough? Dorothy H. Air, PhD Associate Senior Vice President Entrepreneurial Affairs University of Cincinnati and Director of Operations CincyTechUSA July 15, 2009

Entrepreneurship: Test your knowledge Myths (New Venture Creation by Timmons and Spinelli)  Entrepreneurs are born and not made  Anyone can start a business  Entrepreneurs are gamblers  Entrepreneurs experience much stress and pay a high price  Money is the most important start-up ingredient

Entrepreneurship: Test your knowledge Myths Con’t. (New venture Creation by Timmons and Spinelli)  Entrepreneurs should be young and energetic  Entrepreneurs are motivated solely by money  If an entrepreneur is talented, success will come in a year or two  Any entrepreneur with a good idea can raise money  Start and fail at a business, and you will never raise money again

Becoming a Successful Entrepreneur: Critical Factors Novel technology Interest in forming a business Passion and drive to succeed Willingness to sacrifice Willingness to accept and implement advice Ability to take informed and calculated risks

Becoming a Successful Entrepreneur: Critical Factors Flexibility and Resilience Leadership Persistence Optimism and Self-confidence Experience from Wage Earning Jobs Knowledge Focus on value of technology – not $$

Becoming a Successful Entrepreneur: Critical Factors Communication skills Attention to Detail Ability to Build Relationships and Collaborate Team Building Ability to Innovate and Think Outside Box Ability to Think BIG

Becoming a Successful Entrepreneur: Critical Factors Willingness to assume responsibility Commitment to ethics Self-insight into strengths and limitations Understanding of length of time to succeed Right Management team Solid business plan

The Business Plan Is it necessary to have a fully developed and written business plan? What purposes can it serve? What should be included in the plan? How do you get started? Is there help available?

Commercialization of Technology: Where do you start? Do your own homework on the commercial viability of technology Seek external advice on best commercialization pathway Outline a business plan

Commercialization of Technology: Where do you start? Seek external feedback on business plan Take advantage of available resources to help move forward, esp. business resources Determine what role you want/should play in the new venture

Developing a Business Plan: Asking AND Answering the Right Questions Business Overview  What is your company’s business?  What is the problem solved by your business idea?  Why is your business idea the best one to do this?  At what stage of development is your business idea? Market Opportunity  How large is the market?  Is there segmentation in the market?  Which segment is REACHABLE?  Who are your competitors?  How will you enter the market?  Are there barriers?  Is the competition fragmented or is it an emerging industry?

Developing a Business Plan: Asking AND Answering the Right Questions Product or Services  What problem will be solved or void filled?  What is/are the products?  Who will use the product?  Why is the market appealing?  Why is your product different?  What are your advantages over others? Sales and Awareness Strategies  How will you gain and maintain market shares?  Who are the influencers who will need to be convinced? Intellectual Property/Branding Strategies  What is the company’s IP or branding strategy  Who owns the IP?  How is the IP/brand protected?

Developing a Business Plan: Asking AND Answering the Right Questions Management Team and Advisors  Who serves on the Board of Directors?  Who serves on the Advisory Board?  What skills does your team have?  Why will these skills help the company to succeed?  What skills does your team need? Investment Opportunity  How will your company generate income?  How much investment does your company need and over what period of time?  Where will you get the funding?  How will the funds be used?  What business milestones will the company achieve?  What is the exit strategy for investors?

Sources of Funding Getting Started: Personal Savings Personal Credit Cards Borrowed Money from 3 F’s (Friends. Family and Fools) 2 nd or 3 rd Mortgage

Sources of Funding  Seed Stage Sources  Federal Grants – Variable  State Grants – Variable  Foundations - Variable  SBIR/STTR – Phase 1 (feasibility) $100,000; Phase 2 (full R&D) $750,000  Loans – SBA, Bank – variable  Seed Funds – typically up to $500,000  Angel Investments – typically $250,000 – 750,000  Later Stage Sources  Venture Capital  Early Stage $3,000,000/year  Growth $8,000,000/year