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Startup Development Program

National Council of Entrepreneurial Tech Transfer

August 2017

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TODAY’S SPEAKERS

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Tony Stanco, JD, LL.M. NCET2 Executive Director Former U.S. Securities and Exchange Commission Senior Attorney Glenn Vonk, PhD NCET2 Startup Development Officer Former Director of Advanced Technology, BD

Michael Blaustein, PhD NCET2 Startup Development Officer Former Director of Corporate Venture Capital, DuPont Faz Bashi, MD NCET2 Startup Development Officer Chair of the Angel Capital Association's Life Sciences Syndication group

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Glenn Vonk, PhD

FIRST SPEAKER:

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Startup Development Program •  Certified Startups Development Officers

(SDOs) help university faculty, researchers, and students create, develop and fund market aligned university startups to IPO markets and Corporate Business Units

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Glenn Vonk

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Benefits •  Startups/Faculty/Researchers/Students

–  Access to professional SDO talent to help align IP and startups to IPO markets and corporate exits/strategic partnerships

•  Universities –  Moving IP to market for significant market impacts –  Graduating students into startups and working with Fortune 500

•  Fortune 500 Corporates –  De-risked products and startups aligned to technology and

business strategy needs for business units •  Angel and VC Investors

–  Better ROI with aligned exits and strategic partnerships with corporates

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Glenn Vonk

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Benefits Startups Development Officers (SDOs): •  Portfolios of promising startups with significant upside •  Working with faculty, researchers, students and universities to create

$100million+ companies and products

•  Equity for sitting on boards of directors or advisers (joint equity pool with all other SDOs in cohort)

•  Working with Fortune 500 corporate members to develop university and federal lab IP via University Startups to business units

•  Unparalleled national double vetted dealflow •  Best coming from universities across U.S. •  Best of Best selected by Fortune 500 corporate members in University

Startup Demo Day

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Glenn Vonk

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Commercialization Model Timeline

2015 2016 2017

Congress seeks to understand commercialization of $B137 annual R&D in Fed Labs / Universities

NCET2 Congressional Commercialization Summit – Corporate Sub-committee Formed

First Model Proposed

Model Vetting Roadshows: CA; PA; NY

Congressional Briefs

(Pilot) First Demo Day Second

Demo Day

IP2 Startup Pgm Announced

Startup Development Officers Pgm Announced

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Glenn Vonk

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(Draft) Commercialization Readiness Levels

CRL Technical Milestones Business Milestones Funding Milestones

0 Research Validated Opportunity Validated; corp. license if applicable Public Research Grants

1 Startup and Technology development plan

Startup created, management team. IP licenses, Legal issues settled

Public / Private

2 Market and Technical feasibility established

Business plan validated at level 1 (accelerator) and level 2 (CCC)

Public: SBIR / STTR Ph 1; other public sources / University Mentor- Angels

3 “Works-Like” laboratory Proof of Concept

Key corporate advisors in hand; pharma target validated Public; Ph 2 SBIR / STTR, other / University Mentor- Angels

4 “Works-like” operational Prototype Commercialization plan updated incl. competitive update; tech landscape; preclinical validation and safety profile

Public; Ph 2 SBIR / STTR, other / University Mentor- Angels

5 Operational Product Development and Launch

Funding for manufacturing/organizational development; human clinical validation

Public; Ph 2B SBIR / STTR, other; Angel. Pharma: corp./VC/Angel

6 Sales/Service / support/Scaling

SSGNA in place $0-1 million Revenues

Angel / VC / Corp

7 Sales/Service / support/Scaling $1-5 million Revenues Angel - VC / Corp

8 Sales/Service / support/Scaling $5-10 million Revenues VC / Corp

9 Sales/Service / support/Scaling $10-100 million Revenues

VC/Corp

10 Sales/Service / support/Scaling >$100 million Revenues

Exit / IPO

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EXITS

Significant Sustainable Market (Annual) Events

$25 to $50M Early EXITS

Glenn Vonk

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Tony Stanco, JD, LLM

NEXT SPEAKER:

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Startup Development Program •  Congress funds $137 billion of R&D at

universities and federal labs each year •  Wants jobs and economic development

•  10,000-20,000 startups each year •  Universities creating about 1,000 per year

•  Proposed 1 - 3% funding for commercialization

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Tony Stanco

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Researcher Entrepreneur Workforce Development •  Develop University Startups with faculty entrepreneurs,

researchers and graduating students as early management teams

–  Early management teams of graduating students and faculty with SDO support can take company from CRL 0 to CRL 4 with SBIR, state, university and University Angel funding

•  Business plan, proof-of-concept, prototyping

–  “Commercialization Experiments”

•  De-risk to product and market risk at CRL 5

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Tony Stanco

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Startup Development Program •  Serial Entrepreneur SDOs

–  Startup entrepreneurs with significant startup experience from the CEO level provide management level assistance

–  In some cases, Serial Entrepreneur SDOs may become CEOs or other senior executives at startups at Commercialization Readiness Level 5 or 6 (if VCs or angels require it)

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Tony Stanco

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Development Milestones and Funding Support •  Market aligned startups from University Startups Demo

Day with significant Fortune 500 interest invited into Startup Development Program

•  Startup Development Officers will work with startups, universities and corporates to formulate development path for 2-5 years with specific semi-annual milestones and provide funding support from SBIR, angels, VCs and corporate sources

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Tony Stanco

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Startup Development Officers •  Startups Development Officers (SDOs) are:

– Former Fortune 500 open innovation and venturing executives

– Active angel investors – Serial entrepreneurs

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Tony Stanco

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Startup Development Officer •  Each of the SDOs sits on board of directors

or advisers

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Tony Stanco

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SDO Meetings and Reports •  Weekly webex meetings for first couple of months during

business plan and milestone development

•  Monthly webex meetings to stay on development path

•  Quarterly Milestone Reports for Universities, Corporates and Investors

•  In-person meetings at University Startups Demo Day and Conference Demo Days

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Tony Stanco

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Michael Blaustein, PhD

NEXT SPEAKER:

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Startup Development Program •  Strategic SDOs

•  ex-Fortune 500 open innovation and venturing executives assist startup in working with Fortune 500 strategic partners

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Michael Blaustein

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Startup Development: Corporate Collaboration and Corporate Venture Capital •  Leverage their “buy side” experience to assist

startups to align and work with corporate strategic partners

•  Access their corporate networks on behalf of startups to find potential partnerships

•  Bring know how to deal structure and execution

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Michael Blaustein

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Value of Corporate Collaborations to Startups •  Access customers and market insights

•  Access to people and facilities

•  Access to intellectual property

•  Source of revenue for startup through licenses, services, or development agreement

•  Source of revenue through product sales

•  Source of growth capital (Corporate Venture Capital)

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Michael Blaustein

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Essentials for Corporate Collaboration and Investment •  Build collaboration and corporate investment into the

startup strategic plan

•  Determine the types of collaborations and investors that fit

•  Screen and select target companies

•  Plan and execute successful interactions with corporate business leaders and their Venture Capital arms

•  Understand and influence the Corporate decision making process

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Michael Blaustein

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Faz Bashi, MD

NEXT SPEAKER:

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Startup Development Program •  Angel SDOs

•  Active angel investors assist in funding startup from angel investors and VCs through multiple funding rounds

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Faz Bashi

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Angel SDO : Value add •  Foster / Encourage Entrepreneurship •  Attraction / Retention of New Businesses •  Creation of Jobs and Wealth; Diversify the Regional

Economy •  Broaden the Regional Tax Base; Accelerate the Growth of

Businesses within the Region •  Locate and Support Commercialization of Available

Technology •  “see around the corner” …

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Faz Bashi

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Angel SDO : Economic reality •  Lean Angel investors w new operations model •  Broad network of connected Angel groups (>300

in US, >50 in Canada) •  Sharing and syndication •  New models of investment (eg. Moleculo) •  Helping startups attract Institutional, Corporate

VCs

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Faz Bashi

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Angel SDO : Founders aligned •  Currently “Last Money In” (ie. VC) favored •  VCs protect themselves by holding their pro-rata

rights with OPM ie. more money - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

•  Dilution risk for founders is very high •  Faster exits on less capital are good for founders,

entrepreneurs and angels (but not good for VCs)

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Faz Bashi

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Angel SDO : Startup Sherpa ! •  Greater syndication – 67% •  Novel syndication mixtures : FO + AG + HNW •  Novel funds and foundations involved eg MJF •  New innovation support : Incubators, Spinouts,

Accelerators, etc. (Breakout, RH) •  New business models (leaner) •  Innovation in technology is NOT enough •  Reverse innovation : Faster, Better, Cheaper

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Faz Bashi

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Think Different (new models) !

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Faz Bashi

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Benefits •  Startups/Faculty/Researchers/Students

–  Access to professional SDO talent to help align IP and startups to IPO markets and corporate exits/strategic partnerships

•  Universities –  Moving IP to market for significant market impacts

–  Graduating students into startups and working with Fortune 500

•  Fortune 500 Corporates –  De-risked products and startups aligned to technology and business strategy needs for business

units

•  Angel and VC Investors –  Better ROI with aligned exits and strategic partnerships with corporates

•  Startups Development Officers (SDOs):

–  Portfolios of promising startups with significant upside

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Glenn Vonk

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How do you participate? •  Startups/Faculty/Researchers/Students

–  Submit IP and startups for Fortune 500 corporates and SDO review and selection

•  Universities –  Submit IP for immediate Fortune 500 licensing or for long-term SDO startup development –  Submit startups for Fortune 500 corporates and SDO review and selection –  Come to Demo Day to meet SDOs and Fortune 500 corporates

•  Fortune 500 Corporates –  Join Corporate Selection Committee to get to see and review IP and startups for alignment to your business

units –  Come to Demo Day to meet network of SDOs and universities

•  Angel and VC Investors –  Come to Demo Day to see what companies to invest in

•  Startups Development Officers (SDOs): –  Apply to become an SDO

CONTACT: support@ncet2.org for more info or to set-up a call to discuss

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Glenn Vonk

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Startup Development Program

National Council of Entrepreneurial Tech Transfer

August 2017

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Startup Development Program

•  Startup Development Program is capstone program of the R&D Commercialization Model created by corporate members from March – June 2015

•  25 Fortune 500 corporate open innovation and venture capital groups developed the model in response to Congressional Research Commercialization Summit in March 2015

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R&D Commercialization Model

•  Has 5 programs:

–  IP2Startups

–  University Startups Demo Day

–  SBIR Letters of Support

–  Angel/VC Funding (including American-Chinese University Growth Fund and University Mentor Angels)

–  Startup Development Officers

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IP2Startups

•  Fortune 500 help universities identify IP that is market-aligned

–  Universities submit IP to NCET2

–  Corporates review and score the IP

• Immediate licensing for corporates to develop, or

• Long term development by NCET2 Startup Development Officers

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University Startups Demo Day •  Fortune 500 help universities identify university startups that are market-

aligned

–  Universities or startups submit university startups to NCET2

– Startups from IP2Startup program or other sources (universities, angels, VCs, state programs, accelerators and incubators)

–  Corporates review and score startups

• Top scoring companies invited for Demo Day presentations, meetings and eligibility for SDO development program

• Immediate deal with corporate, or

• More likely, 2-5 year development needed with milestones and funding

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Significant Sustainable Market Event

•  Present State:

–  Research: 1 in 10000

–  SBIR: 1 in 1000

–  Angel Investment: 1 in 100

–  VC Investment: 1 in 10

•  Thomas Edison: Experiment with 1000 steps

•  NCET2 Startup Development Program

–  Should significantly improve odds of success for research, SBIR, Angel investments

–  Provide entrepreneurial experience to graduating students

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Startup Development Officers

•  Ideally SDO team of 3 SDOs for each startup

• Help prepare business plan and development milestones for startup in consultation with the strategic corporates, investors and universities

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Angel/VC Private Funding

•  Angel investors and VCs interested in double vetted corporate aligned dealflow from SDO program

•  Two Specific NCET2 Programs to fund dealflow from SDO program

–  American-Chinese University Growth Fund

–  University Mentoring Angels

• Bob Hisrich, Kent State

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SBIR Support

•  Corporates will give Letters of Support for startups in the Development Program

–  Generally, current success rates for SBIR program are 12-15%

–  DoD study: 67% success rate if at least one meaningful letter of support from corporates

–  Letters of Support from multiple corporates expected to provide high success rates for startups in SDO program

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Model Time line •  Jan 2015: Congress interested in new models to commercialize $137 billion of R&D at universities and federal labs each year

•  March 2015: National Research Commercialization Summit with Congress and White House

•  March 2015: NCET2 Corporate Sub-Committee to create model

•  June 2015: Draft Corporate Commercialization Center Model completed

•  June-November 2015: Roadshow in Palo Alto, New York, and Philadelphia to get university, angel investors and VC feedback

•  December 2015-September 2016: Congressional Briefings

•  September 2016: First University Startups Demo Day at Congress

•  April 2017: American-Chinese University Growth Fund announced

•  April 2017: Second University Startups Demo Day

•  May 2017: IP2Startup program announced

•  July 2017: Startup Development Officers program announced

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