1. Today Wed Class schedule update & Presentation Forums (5’)
Corporate Technology Commercialization- Tom Lindner (40’)
Revenue and Cost Projection- Example (30’)
Team work time- Milestones, revenue and cost projections (45’)
Assignment: Prepare a 12’ presentation on commercialization milestones, revenue and cost projections for class Wednesday. A written version is due by 12 midnight this Friday evening (2/22).
Wed
Sources of Venture Financing (30’)
Work Session- written milestones, revenue and cost projections plan; prepare overall plan for JT discussion (90’)

2. Schedule Update
Only 7 more class meetings till presentations and competition!!
Teams schedule a time to meet with John T on Thurs, Feb 21st
Teams meet with Paul Gulick on Wed, Feb 27th
Teams meet with Bill Newman Mon, March 3rd
In class presentations Wed, March 5th
Portland Business Round Table panel on Wed, March 12th
Written commercialization plans due- Wed, March 19th
Deadline for Business Plan Competition - Fri, March 21st ($$$)

3. Technology Commercialization Checklist
Patent or IP selection
Understanding of IP scope, status, limitations
First Pass Market Survey
Commercialization option brainstorming
Product form and commercialization approach selection
Customer Value Proposition
Revenue, Staffing & Costs- Second Pass Market Survey
Startup Timeline
Cash Flow, Funding Needs, and Break even point
Funding Strategy
Next Steps and Outstanding Issues

4. Next Step in Commercialization Plans: Estimating Revenue and Start Up Costs
The following assumes that information has been collected and decisions have been made on
a) Overall commercialization approach,
b) Market research and product positioning
c) Product or service definition, and potential customer cost
d) Position in the value chain- suppliers and customers are known

5. Before you continue…
From your work to date, spend 10’ in your group discussing these aspects of your commercialization plan. If you don’t yet agree, plan follow up work or research to get answers before moving ahead
The exact form of the product or service you will sell
Your exact position in the value chain and your competitors
Why your product or service is superior to your competitors
Your choice of a start-up and licensing approach and why
If multiple products are planned, which will be pursued first and why
Your exact customer profile (consumer or business)
Specify the problem solved that your customer will pay for
Estimate how much your customer will pay for this product or service and why

6. Revenue and Cost Projections
Various financial tools are available for tracking costs for a start up.
For simplicity, we suggest a cash flow model. A simple tool for this
method is available from the Small Business Administration at
To use this tool, you will need estimates on the following
Step 1: Projected revenue vs time
Step 2: Projected development and start up costs
Step 3: Projected manufacturing costs vs time

7. Revenue/Sales Projections- Example
“Nano-reactor Systems” is a start-up company which plans to manufacture microchannel reactors for pharmaceutical applications.
Market research has shown that there are approximately 50 tools of similar function are purchased worldwide each year.
An analysis of the pharmaceutical companies costs, suggests that they would still realize a quick return on their investment if the reactors were priced at $800K to $1M each
Market research has shown that beneficial new tooling in this industry is adopted by these manufacturers, typically (Yr 1=10%, Yr 2=20%, Yr 3= 25%)
How would you generate a revenue projection from these data?

8. Development and Start Up Costs- Example
Nano-reactor Systems has developed a “bench top” microchannel reactor but needs lab space, additional staff, materials, and outside services to develop a prototype system to demonstrate to potential customers
Here are some of the detailed development costs to develop a prototype system in the first year
Materials- $500K
Operating supplies- $20K/mo
Wages: 2 development
Rent/Utilities: $1000/month
Taxes, Insurance, Licenses: $5000/yr
Outside design services: $100K
In the latter part of the year, they must also begin a sales and advertising effort with the following costs
Travel- $20K
Wages:
What would the development and start-up costs look like over the year?

9. Manufacturing Costs- Example
Once orders are received, Nano-reactor Systems believes they can manufacture up to 3 reactors per year with their present staff for the following additional costs per reactor
Materials and components- $200K
Shipping and transportation- $15K
Machining and design services- $20K
Licenses- $15K
Operating supplies- $30K
In addition to the costs above, for each additional 3 reactors per year, Nano-reactor Systems must increase its staffing and space with the following additional costs
One additional manufacturing
One manufacturing $40K/yr
From the revenue/sales projection, how would you calculate manufacturing costs for the first several years?

10. Team Work Session
Discuss with your team where you are on Tech Commercialization Checklist
Be realistic- make necessary decisions and complete research before moving to next steps
Complete any discussions on product definition or commercialization approach
Assign additional market research needed
In the remaining class time and out of class before Wednesday, please
Work on Costs, Revenue & Sales Projections
Collect questions & identify feedback for JT meeting