Start Up Boot Camp Start Up Boot Camp for University TTO Professionals and Inventors Creating a Solid Business Plan Session 3: Creating a Solid Business Plan Presents: 1www.technologytransfertactics.com

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Your Panel of Presenters Moderator: Gerard Eldering is Founder and President of InnovateTech Ventures, specializing in venture creation based on inventions licensed from universities and research institutions. Since the company’s founding in 2007, InnovateTech has supported numerous mid-Atlantic universities and co-founded three start-up companies including AlphaDetect and Trilumen. Gerard has been working in the technology transfer community for more than a decade and is passionate about the creation of professionally managed and funded start-up companies. Prior to launching InnovateTech, he founded and served as Director of the Technology Transfer Office at The MITRE Corporation. He is an MBA and a registered patent agent.Presenter: Jim Chung is Director of the Office of Entrepreneurship at George Washington University, where he is responsible for entrepreneurship programs and technology transfer. Previously, he was Director of the Mtech VentureAccelerator at the University of Maryland, where he assisted faculty and students in launching start-up companies based on University of Maryland technology. Before the University of Maryland, Chung was Director of New Business Development at the Corporate Executive Board, where he helped establish the company's mergers and acquisitions capabilities, including the acquisition of IT Toolbox. Prior to the Corporate Executive Board, Chung was vice president of Cherington Capital (now Intervale Capital), a private equity firm investing in middle-market manufacturing and service businesses in the oil and gas industry, where he helped execute the acquisition of Ulterra Drilling Technologies (formerly Rockbit International). Chung spent five years prior to joining Cherington Capital in the venture capital industry, most recently at incTANK Ventures, an early stage venture capital firm, where he served as managing director. He has experience leading or co-leading investments into medical device, software, and information technology companies, including investments in AgaMatrix Inc. and Nexaweb Technologies, Inc. Before entering the private sector, Chung was an academic researcher studying how business, government and academia work together to create new innovation in high technology industries. He served as a research fellow at several institutions during his 10-year academic career, including Harvard University, MIT and the University of Tokyo.

Your Panel of Presenters Charles Cella, Patent Attorney and Co-Founder of GTC, is a recognized thought leader and leading practitioner in the patent and licensing fields. He provides patent strategy, licensing and technology-transaction services to a broad range of clients, from industry-leading software companies to single-inventor start-ups. Prior to GTC, Charles founded and was CEO of BountyQuest, an Internet marketplace for information relevant to the strength, validity or applicability of patents and for which he recruited investments from Jeff Bezos and Tim O’Reilly, among others. Previously, Charles was the first patent attorney at Foley Hoag LLP, where he grew the practice to twenty-five people and advised high-tech and biotech firms of all sizes on building IP portfolios and negotiating technology transactions. Paul E. Rauch, PhD, founder, Evan Law Group LLC, has prosecuted numerous patent applications in a broad spectrum of technologies, including biotechnology, pharmaceuticals, polymers, materials, semiconductors, microfluidics, software, business methods, electronics, telecommunications, manufacturing simulation and analysis, and consumer products. He was a postdoctoral research associate at the Max-Planck Institute in Stuttgart, Germany, and at Harvard University. Dr. Rauch counsels clients on maximizing the value of their intellectual property, including developing prosecution strategies and patent portfolios, as well as preparing validity, infringement, and freedom to operate opinions directed to a variety of products and devices, including pharmaceutical compounds covered by FDA “Orange Book” patents. He has counseled domestic and foreign companies on freedom to manufacture, import and market their products in the United States. His biotechnology practice includes cases involving the diagnosis and treatment of many different disease states, stem cell therapeutic reagents and methods, pharmaceuticals, and drug delivery systems. Dr. Rauch has impressive experience in prosecution of patents, including reexamination and appeals to the Board of Appeals and Interferences, often personally presenting cases directly to patent examiners. Prior to founding Evan Law Group LLC, Dr. Rauch was a Partner at Sonnenschein Nath & Rosenthal, at Brinks Hofer Gilson & Lione, as well as Oblon, Spivak, McClelland, Maier and Neustadt.. Legal Team:

Elements of a Business Plan FIRST AND FOREMOST: Audience (Potential Investors, Partners, Recruits) Business Plan is Written for an Audience Tailor your business plan to the audience you are addressing Put yourself in their shoes to figure out what they would want to know They all have different priorities Executive summary Market-focused strategy Technology/IP Execution/ Team Financial Risk and return

Business Plan is about: – Amount of planned investment / commitment – Determination of risk » Cost of determination » Accuracy of determination - Mitigate risk Cost of mitigation » Benefit of mitigation – Maximize return Risk can come from many sources: – Market, Team/Organization, Product/Technology, Regulatory, Financial Increasing returns can come from many sources: – Revenue generation, cost reduction, economies of scale/scope, network effects Key is to identify risks and develop mitigation strategy Managing Risk and Return

Problem & Solution Statement Value Prop/Opp’ty – Problem How Big? Who’s the Customer? How Fast is the Opportunity Growing? – Solution How You Solve It? Necessary? Timing? Differentiation – Technology? – Business Model? – Relationships? – Price/Cost? Defensibility – IP Protection? – Team? – First Mover Advantage

Market Factors Market Opportunity – Highlight the Opportunity – Go to market strategy Identify Market Risks – Customers – Market Size, Growth Rate, Structure – Marketing Channels – Current Competitors – Potential Competitors – Sales Cycle – Regulatory Explain Market Risk Mitigation – Identify and Segment Customers for Value Proposition – Provide Market Sizing and Growth Rationale – Provide Competitive Landscape – Market Entry Strategy

Technology/Product Factors Highlight the Opportunity Identify Risks – Stage of Development  Timelines – Cost  Technology – Materials  Suppliers – Design  Standards Explain Mitigation – Cost Analysis – Technology Development Prototypes Proofs of Concept – Secure Supply Chain

Intellectual Property IP value and risk factors – Protecting the market – Protecting the technology – Protecting the products Competition Risk – Scope of patent protection – patentability – Timing of patent issuance relative to sales and marketing Mitigation of Competition Risk – More patents (develop a portfolio) – Foreign application filings – Timing of foreign application filings (Paris Convention and PCT applications) – Expedited examination (Patent Prosecution Highway) Freedom-to-Operate Opinion- Not appropriate for business plans Too expensive – FTO search (about $10,000) – discover patents – FTO analysis of each patent ($30,000-$100,000 each) Lack of accuracy – New patents may issue – Changes in product design or business strategy, selection of markets Alternatives – Develop patent portfolio (“picket fence strategy”) - $10,000 - $20,000 each U.S. patent – Business insurance – Avoid “willful” infringement (opinion of counsel) – Licensing 10

Execution/Team Highlight Strengths – Core competencies match strategy Identify Risks – Management Capabilities – Ability to Work Together – Ability to Learn – Shared Vision – Breadth and Depth Explain Mitigation Strategy – Experience Management Advisory History Recruitment/Team Building

Financial Highlight Opportunity Identify Risks – Amount Required – Key Assumptions – Availability – Growth/Cost Forecasting – Expected ROI – Comparables – Exit Options Explain Mitigation – Thorough and Realistic understanding of requirements and potential returns – Right Sources of Funding – Exit Strategy Pro Forma Financials – 3-5 years

Mistakes to Avoid Technology looking for a solution Assumed market share – Top-down assumptions versus bottom-up validation – Lack of customer understanding “Nice to have” versus “Need to have” solutions “We have no competition” No clear revenue model or path to profitability Incomplete team No metrics to measure progress Lack of focus Failure to address risks head-on Balance cost of risk determination with level of investment and time to market – Don’t be pressured into expensive risk determination - accuracy or value of analysis must justify cost

Q&A Utilize the chat box to the bottom left of your screen to submit a question to the panel. Please address your question to a specific presenter. Or Press * 1 on your touchtone phone and this will place you into the phone queue.

Introduction to Session Four (June 24, 2010) Funding Options and Opportunities Attracting and seeking out the right investors Identifying what type of funding you need and when Structuring the investment Investor turn-ons and turn-offs Common terms and pitfalls to avoid Current investment landscape and 2011 forecast And more…