Spinout Company

1

• Spin-out Company
• Pre-Funding and Funding
• Brian Graves
• Head Physical Engineering and Physical Sciences
  Team
• Imperial Innovations

2
Profile of Imperial College

• Science, Engineering and Medicine
• Largest medical school in Europe
• 6 associated hospital sites
• 3,000 research staff
• 10,000 students
• Annual research income 160m, Industry sponsored
  research c20m
• Imperial Innovations, technology
  commercialisation company

3
Imperial Innovations

• 160 Invention disclosures per year
• File 1 new patent per week
• 38 Staff (senior staff each have 15-25 years
  industrial experience)
• 64 spin-out companies formed
• Over 100 active licences
• Raised over 175m investment in spin-out
  companies
• Private Placement April 2005 10m net to Imperial
  Innovations

4
Innovations Integrated Structure

• Technology Transfer
• Invention Disclosure
• Develop Business Proposition
• Form Spin-outs
• Licensing

• Spin-Out Incubation
• Establish Spin-outs
• Manage Networks
• Business Angels
• Entrepreneurs
• Directors
• Prepare Investment Proposals
• Manage Imperial Bio-Incubator
• Manage Carbon Trust Incubator

• Asset Management
• Progress Spin-out to an exit
• Prepare Investment Proposals
• Manage Network of Investors

5
Developing the Business Proposition
What is the Product? What does it do? What is the
differentiated Benefit? Is there market
validation? What is the Intellectual Property
Strategy? What is the commercialisation strategy?
6
Developing the Business Proposition

• Activities
• What is the Product?
• What does it do?
• What is the differentiated Benefit?
• Is there market validation?
• What is the Intellectual Property Strategy?
• What is the commercialisation strategy?

• Resources
• Industry, Technical, Business and Design Contacts
• Proof of Concept Funding, Development Contract
• Market intelligence
• Industry, Technical, Business, Design Contacts
  and first customer
• Patent budget
• Technology Venture Programme

7
Developing the Business Proposition

• Resources
• Proof of Concept
• Patent
• TVP
• Contacts and Market Intelligence
• Total Cash
• In kind

• Investment Cost
• 5-25k
• 10-25k
• Free but equivalent to 25k
• Free but exec time equivalent to 5k
• 20k-55k
• Equivalent 25k

8
Marketing the Business Proposition

• Writing the Business Plan
• Recruiting a Management Team and Directors
• Finding Customers
• Doing Deals with Advisers
• Using Networks
• Test Marketing the Business Plan
• Finding Premises
• Targeting Investors
• Selling the Proposition to Investors

9
Investors

• Friends and Family
• Business Angels
• UCSF
• Imperial Innovations
• Research Portfolio Funders
• Public Agency Sources
• VCTs
• VCs

10
Case Example Pumped Diode Laser
50W
125W
80W
180W

• Very high electrical to optical efficiency
• High power scalability to several hundred watts
• Highest spatial beam quality
• Compact and rugged format with significant cost
  savings in production
• Newly developed thermal management which will
  lead to further scaling to kilowatt power levels
• Multiple wavelengths in the visible, uv and
  mid-infrared spectrum
• Different pulsed formats.

11
Case Example Pumped Diode Laser

• Patent July 2002
• Proof of Concept Funding (POC) 2004 to create lab
  demonstrator delivering 125w
• Reviewed by US metrology company exploring
  potential development contract
• Reviewed by 5 other industry contacts
• TVP Nov 2005
• Commercial lead (POC) funded to prepare business
  plan
• Expect to form company end 2005
• Initial investors identified (business angel)

12
Case Example deltaDOT

• High speed, accurate direct monitoring of
  biomolecules in real time using Label Free
  Intrinsic Imaging. Technology based on
  microfluidics and analytical techniques derived
  from detecting weak signals from large
  backgrounds in high energy particle physics.
  Currently selling Peregine protein analysis
  system.
• Patent May 1995
• Proof of Concept Funding (UCSF)
• Company Formed 1999
• Raised 4.6m of investment to date

13
Summary

• Develop the business case from the start
• Identify and validate the perceived customer
  benefits
• Use in-kind resources
• Only form a spin-out company if it is investment
  worthy