Evaluating Business Opportunities

1
Evaluating Business Opportunities

• John Halliday
• Virtual Company Facilitator
• Kingston University Enterprise Exchange
• for
• WestFocus Knowledge Exchange Fellows Seminar

2
WestFocus Business Acceleration

• Business Creation Commercialisation of
  University Research
• Spinout / Licensing
• Business Support Knowledge and Skills Transfer
  for SMEs
• KTP, WBL, Academic Consultancy, Student /
  Graduate Placements
• The Virtual Company (TVC) scheme Innovation
  support for Inventors and Fledgling Companies
• Spin-In / Start-up
• http//www.WestFocus.org.uk/BusinessAcceleration

3
WestFocus Business Creation Focus on Academics

• Project Mining / Assessment
• Identifying ideas with commercialisation
  potential
• Guidance on Intellectual Property issues
• Protecting the Idea
• Market Assessment
• Will it sell?
• PARK Proof-of-Concept and Seed Funds
• Early stage funding
• Introduction to Angel and VC investors
• External investment

4
WestFocus Business Support Focus on SMEs

• Knowledge Transfer Partnerships (KTP)
• DTI subsidised placements for Project
  Associate, supported by Academic Supervisor
• Work-based Learning (WBL)
• Accredited learning programmes from Certificate
  to Masters
• STEP
• Summer placement opportunities for students
• UTP (was Cut-iT)
• Flexible placement opportunities for students,
  post-grad and alumni
• Grant-funded Consultancy
• Consultancy opportunities for academics
• External engagement enhances teaching and
  research

5
The Virtual Company (TVC) Scheme Focus on
External Inventors and Innovators

• Kingston University initiative
• Piloted by Business Link Wessex
• Supporting innovation using university expertise
• Academic engagement
• Pipeline for innovative ideas
• Many more outside than inside the university?
• Enhanced profile with industry, public and
  government bodies
• Attract funding
• Builds a sustainable business creation activity
• Equity participation, Licensing and consultancy
  income

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Invention - Success Factors

• Britain claims to be the most inventive country
  in the world so why do so few inventors enjoy
  commercial success?
• Does the Entrepreneurial Inventor exist?
• Inventors go through the following phases-
• Inspiration they think of a great idea!
• Aspiration they seek help to prove the concept,
  build prototypes etc.
• Perspiration they strive to get products to
  market (with a little help from others)
• They need complementary Skills
• Business Development, Sales and marketing,
  Project Management, Design, Engineering, Legal,
  Finance, manufacturing..
• Plus Drive and Energy!
• Thomas Edison Invention is 1 inspiration and
  99 perspiration

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The Virtual Company (TVC) Scheme

• A proven formula that organises a team of
  specialists to guide lone inventors, champion
  their cause and help them gain access to grants
  and other sources of funding
• A Virtual Company is formed when a team of
  experts agree to work with an inventor to bring
  an idea to market
• The experts work for no fee, but in exchange for
  virtual shares in a virtual company, which
  convert into real shares in the case of eventual
  success
• Similar process for academics (Spin-Out)and
  external inventors (Spin-In), except IP
  ownership
• http//www.kingston.ac.uk/business-services

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DTI Diagnostic - Investigating an Innovative Idea

• Evaluation Criteria(SME Project)
• Project Plan
• Market
• Risk
• Human Resources
• Financial Resources
• Project Management
• Strategic Fit
• Competitive Position
• Environmental Social Impact

Note Triple-I scheme discontinued mid 2005
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TVC Nurturing the Early-stage Idea
Business Plan
Marketing Plan
IDEA
Milestones
Research
Concept
Development
Production Sales
Spin-Out or Spin-In
Vision
Proof-of-Concept- technical- commercial
Prototype
Production
Trials

• Focus on Proof-of-Concept stage
• Where the university can add value
• Entrepreneurship Training
• learning modules, seminars, workshops
• MSc by learning contract(Innovation
  Entrepreneurship)
• Kingston Inventor Club
• Pitching the idea
• Getting constructive feedback
• http//www.kingstoninventors.org

Proof-of-Concept, Commercialisation
Referral
Nurturing
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TVC Filtering / Qualification Process
Consultancy only?
RecommendTVC support?
Long-term commitment

• Do we see a business opportunity?
• Can the university add value?
• Rigorous assessment process establishes
  credibility with grant bodies
• Rejects need positive direction or referral
  propose alternative

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KU Enterprise Committee Support Form

• KU Support Criteria
• Can we form a team?
• Engage technical / business experts
• Can we raise funding?
• Qualification for PoC / RD Grants
• Return on Investment?

Note R Red, A Amber, G Green (All presented
to EE must be at least A or G)
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Funding the Business Creation Process
Business Plan
Marketing Plan
IDEA
Milestones
Research
Concept
Development
Production Sales
Spin-Out or Spin-In
Vision
Proof-of-Concept- technical- commercial
Prototype
Production
Trials
DTI
Closed mid-2005
Triple-I
Micro
RDA RD Awards (old DTI SMART)
Availability depends on RDA region
Research
Development
RDA Proof-of-Concept Funds for SME / HEI
collaboration
LDA Connect, SEEDA PoCKeT
Proof-of-Concept Fund
WestFocus / PARK( CommercialiSE /PoCKeT)
Seed Fund
Angel Funds

• Proof-of-Concept funding aims to reduce risk
• Seed funding prepares for external investment or
  revenue

VC Funds - CLOSE
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Key Assessment Criteria (WestFocus / PARK)

• Will it work / how well?
• USP (Unique selling proposition)
• How innovative?
• Competitive advantage
• How does it satisfy a market sector?
• Timeliness?
• Longevity of product or product line / repeat
  orders?
• Potential for family of products
• to permit company development?
• Previous record
• technical innovation / management?
• Intellectual property rights (IPR)
• Protection of idea

• Scores assigned against objective criteria
• Weighted Sum / Product used to aid decision

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Key Assessment Criteria (CommercialiSE / PoCKeT)

• Technology
• Innovation
• Technical Risk Assessment
• Commercial
• Barriers to Entry
• Sustainability of Competitive Advantage
• Exploitation Prospects
• Profit Generation Potential
• Applicant Capability
• Viability
• Management Commitment
• Applicant Track Record
• Management Abilities
• Wider Aspects
• Relationship Value Added
• Environmental Impact

• Useful for ranking of Projects
• Note low score in certain areas can simply
  indicate potential work to be done

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Commercial Opportunities Appraisal Process
(Warwick / Coventry)

• 10 COAP Dimensions
• Uniqueness of the technology
• Readiness of the technology
• Value of the Market
• Anticipated Profit Margins
• Intensity of Competition in the Market
• Competitive Edge of your Product or Service
• Ease of Access to the Market
• Customer Conservatism
• Commitment of the Team
• Commercial Experience of the Team
• Original idea by David Catton, Sheffield
  University Enterprises Ltd

• Note focus on the Individual or Team!

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TVC Scheme Project Drivers

• Project Drivers
• Key role to define and maintain strategic
  direction
• Objectives aligned with other stakeholders
• Recruitment
• Personal attributes, Skills, Sector-specific
  Experience
• Engagement provides some validation of the
  business concept
• Selection Workshops
• Several projects pitched to several candidate
  drivers
• One-to One meetings to determine rapport with
  Academic / Inventor
• Remuneration
• Initial contribution to work-up of funding
  proposal on no-win-no-fee basis, then (if
  successful) a defined role on the project
• Continuing role against agreed share in equity or
  license / royalty income
• http//www.kingston.ac.uk/business-services