Creating Wealth from Innovation

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Creating Wealth from Innovation

©2011 Commercial Edge LLP. All Rights Reserved.

What are the Odds?

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Higher Education –Business and Community Interaction SurveyFigure 4 Selected HE-BCI income streams 2003-2008 (real terms)

Source: HE-BCI 2003-2007 Part B Tables 1b, 2, 3 and 4c

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“Over the last ten years, we have entered into long-term agreements with ten of the UK’s leading universities with a combined research income of over £1 billion”

Alan Aubrey CEO

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Even ‘professional’ investors make poor returns on early stage businesses

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Stop Beating Ourselves Up?

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Creating Wealth from Innovation

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Early Successes

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9

Courtesy of Rolls-RoyceStrategic Research Centre

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Emergency SmokeExtraction Motors

Variable Speed Drives

Oil SandsExtraction Systems

The BigMotor ManufacturersWire

Manufacturers

Ultra Deep Oil Extraction

Application Development

Hot Coatings LimitedHot Coatings LimitedHot Coatings LimitedHot Coatings Limited

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The digitalEnvironment

Nano-Genes

CatalystsOr Reactant

breeding &mutationprogram

Figure 2: Unlike biological evolution, QDGA allows us to direct an evolutionary process to define a molecule with specific desirable traits. We use a proprietary method to define Nano-Genes for the traits we want in a catalyst or reactant. We can also define the environment and control the breeding and mutation program.

The digitalEnvironment

Nano-Genes

CatalystsOr Reactant

breeding &mutationprogram

The digitalEnvironment

Nano-Genes

CatalystsOr Reactant

breeding &mutationprogram

Nano-Genes

CatalystsOr Reactant

breeding &mutationprogram

Figure 2: Unlike biological evolution, QDGA allows us to direct an evolutionary process to define a molecule with specific desirable traits. We use a proprietary method to define Nano-Genes for the traits we want in a catalyst or reactant. We can also define the environment and control the breeding and mutation program.

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“The Teesside University – Shadowboxer project has demonstrated how carefully coordinated academic and commercial interests can align to significantly benefit society at large. We hope to work in a similarly constructive and socially responsible way with our own leading Universities at home in Australia.”

Former Australian Prime Minister, Bob Hawke

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What’s Different?

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1 in 160,000 chance of financial success

Traditional Approach

Ref: High Tech Start Up. John L. NesheimISBN 0-684-87170-X

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Approach

Benefits….• Research at good commercial rates• Zero wastage of research effort• Independence from over-subscribed grant funding • The opportunity to get leveraged value… Royalties

and Equity• Enhanced reputation to attract high quality

academics and students• More productive engagement with the business

community… for research, consulting and training

At this point

we’re making money

++

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R & DSales

&Marketing

ProjectManagement

& Supply Chain

Admin, LegalIP Management

Accountancy… et al

Partners, MarketsClients and Consumers

Fund Raising&

Equity Management

SharedService

University

University

University

University

University

TheVentures

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Researcher

Scientist (Middle Management, SME’s)

B

A

Big CompanyExecutive

BigProfits

BigImpact

(Proven Smaller Company Entrepreneurs)

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Networked with Decision MakersRespected in IndustryHigh Impact Deal ExperienceDone it Before

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The Process

• Workshop

• One to One assessment sessions

• Objective review of the University’s potential

• Umbrella agreement

• Pump Prime Funding

• Outline Interim Agreement

• Sign up individual Interim Agreements

• Identify and close start-up deals

• Form company

• Create more projects and profits… Maximise equity value

• ‘Tax’ revenues to self fund the portfolio

• Exit individual ventures for Capital Gains or Trade with Profits

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Interim Agreement

• To allow us to work out how to make it a commercial success.

• 3 equal votes University, Academic Lead, Business Lead

• Business development costs taken out of margin

• IP granted to the venture

• Shareholding… 45 – CE / 55 – Academic and University

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Key Points of Differentiation

• Consortium – Shared Service

• High Skilled and Networked Business People.

• Incentives aligned on OUTPUT measures and the interests of the inventors and universities.

• Self funding, apart from an initial pump prime of cash from the University.

• It is a non-exclusive arrangement, in addition to existing or future independent initiatives or relationships with other external bodies.

• It brings new, untapped opportunities to the University and academics that would not otherwise be seen.

• It can also be used to improve existing relationships and increase financial returns.

• It incurs no risk on the part of the universities and is legally independent from the participating universities.

©2011 Commercial Edge LLP. All Rights Reserved.

www.tcei.co.uk

Andy Todd

andy.todd@tcei.co.uk

Telephone: +44 (0)7785 394220