Commercialization Overview The Austin Model November 2004 Laura J. Kilcrease Triton Ventures laura@tritonventures.com 2004 Triton Ventures 1
Commercialization The Austin Model Establish excellence in R&D base Build community infrastructure Drive Entrepreneurship Attract Capital Measure Results 2004 Triton Ventures 2
Commercialization The Austin Model Establish excellence in R&D base Build community infrastructure Drive Entrepreneurship Attract Capital Measure Results 2004 Triton Ventures 3
Attract and Foster Strong Research Organizations Academic University of Texas Consortia MCC SEMATECH Corporate 3M Freescale (Motorola) IBM 2004 Triton Ventures 4
Build a Commercialization Process The Three Phases of Technology Commercialization Information Gathering Opportunity Analysis Implementation Technology Assessment Technology Identification Preliminary Technology Ranking Licensing / Startup Market Assessment 2004 Triton Ventures 5
Technology Ranking Criteria Technology Assessment: How does the technology compare to state of the art? Market Opportunity: Is it a large, growing market with a current demand? State of the Technology: How imminent is the opportunity? How much development, regulatory approval is required? Me Too Incremental Revolutionary Weak Moderate Strong Early Mid Late 2004 Triton Ventures 6
Matrix Representations Focus on technologies with the best chances of success Technology Early Stage Market Mid Stage Late Stage 2004 Triton Ventures 7
Commercialization The Austin Model Establish excellence in R&D base Build community infrastructure Drive Entrepreneurship Attract Capital Measure Results 2004 Triton Ventures 8
Community Infrastructure Academic Business Community Government Talent Technology Capital Know-How Market Needs Successful Value-Added Technology Firms 2004 Triton Ventures 9
Commercialization The Austin Model Establish excellence in R&D base Build community infrastructure Drive Entrepreneurship Attract Capital Measure Results 2004 Triton Ventures 10
Drive Entrepreneurship Academic The Austin Model MBA Entrepreneurship Curriculum MOOT Corp. Business Plan Competition Business Networking Associations Conferences 2004 Triton Ventures 11
Drive Entrepreneurship The Austin Model Celebrate Successes Accept Failures Entrepreneurs pull & Universities push commercializable technology for start up / spin out 2004 Triton Ventures 12
Entrepreneurship - UT Austin 2004 Triton Ventures 13
Commercialization The Austin Model Establish excellence in R&D base Build community infrastructure Drive Entrepreneurship Attract Capital Measure Results 2004 Triton Ventures 14
Commercialization Capital Gap In the cash flow valley of death entrepreneurs face the convergence of high cash demands and low ability to raise it. Source: Bridging the Valley of Death: Transitioning from Public to Private Sector Financing, NREL May 2003 2004 Triton Ventures 15
Valuing The Idea What technology gets the attention? Can we make a business out of this? Show me the plan! OK, so how much is this thing really worth? 2004 Triton Ventures 16
Alternate Views What It Takes to Start a Company Technologist 1) Technology 2) Technical People 3) Market 4) Business Management Venture Capitalist 1) Business Management 2) Technical People 3) Market 4) Technology 2004 Triton Ventures 17
Types of Financing 3Fs Angels Corporate Investors Venture Capitalists 2004 Triton Ventures 18
1996-2003 Investment Texas Deal Flow and Equity into Venture-Backed Companies Amount Invested ($M) $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 127 $505.4 160 $826.2 475 $6,133.3 339 284 174 $2,669.4 $3,206.4 164 154 $1,285.2 $1,068.8 $1,165.9 500 400 300 200 100 0 Number of Deals 1996 1997 1998 1999 2000 2001 2002 2003 Amount Invested ($M) Number of Deals Underlying data available in VentureSource Source: VentureOne/Ernst & Young 2004 Triton Ventures 19
Investment Texas by City SA / S. TX 4% West TX 1% Houston 17% Dallas 38% Dallas Austin Houston SA / S. TX West TX Austin 40% Underlying data available in VentureSource 2004 Triton Ventures 20
Commercialization The Austin Model Establish excellence in R&D base Build community infrastructure Drive Entrepreneurship Attract Capital Measure Results 2004 Triton Ventures 21
Metrics The Austin Model Universities Royalties Equity Value Research $$$ Business New Companies Revenue Growth Shareholder Value Community Job Growth Industry Diversification Increased Salaries Increased Tax Base 2004 Triton Ventures 22
Impact on Austin 2004 Triton Ventures 23
The Austin Model Economic security requires competitive advantages that are realized by applying technology to transform basic and advanced industries as well as accelerating growth in emerging industries and starting new industries. -Dr. George Kozmetsky 2004 Triton Ventures 24
Step 1 - Large organizations sponsor R&D Triton Ventures Spinout Model in Action Step 4 - Proven market, technology and execution enable exit opportunities Step 2 - Technology is spun out Step 3 - Triton invests to fund commercialization and growth POWER PARAGON, INC. 2004 Triton Ventures 25
Commercialization Overview The Austin Model November 2004 Laura J. Kilcrease Triton Ventures laura@tritonventures.com 2004 Triton Ventures 26