Venture Development Process
When a new technology is submitted to the Office for Technology Development, it is evaluated by the technology analyst who interviews the inventors and then checks for prior art, patents, or other publications in various public and private subscription databases.
The technology is reviewed by the licensing and venture development OTD staff for commercialization potential, including patent possibilities, likely interested parties for licensing, and potential for placement into a start-up company project.
Those technologies that seem to have the special potential to become part of a new commercial entity are selected by Venture Development to become a new venture project and a project leader takes responsibility for it.
In the following weeks and months the project leader will investigate the potential market, comparable companies in the space, commercialization investments in similar other technologies, and all other resources that would be needed to establish a start-up based on the core technology.
Throughout this process a "value proposition" begins to take shape and at some point a start-up manager is identified. The project leader serves as the start-up manager for the internal development phase and until an outside person is named to head the new entity.
Technologies are licensed into the start-ups from the university in exchange for equity in the company. The license equity is shared with the inventors. In addition, the university may receive additional equity as founders’ equity for value added into the start-up through the company formation and business development work.
Unlike the license equity, founders’ equity is not shared with inventors but rather is retained by the university as a means of defraying its sunk-in costs related to forming the company. Inventors may, on a case by case basis, receive founders’ equity if their continued participation in the company is required but that equity cannot be greater than the equity received by the university.
The start-up process operates with a team, typically led by a member of the Venture Development group working with a member of the Technology Licensing group, the faculty inventors, outside entrepreneurs, advisors from industry, the venture investment community, and others as needed.
1. Identify one or more technologies that may justify a start-up project
2. Develop the value proposition working with the inventors, the Technology Licensing Group, outside entrepreneurs, and advisors
3. Develop the terms of the start-up structure and the technology licenses
4. Assist in the development of the business plan and company structure, including funding
5. Execute licensing consequent with the development of the funding