Business Planning for Inventors

Created by:

Adrian PelkusA Squared Technologies, Inc.

www.a-squaredtec.com “Helping Inventors become Entrepreneurs Since 1985”

Presented by

Adrian Pelkus November 11th,

2010

Adrian Pelkus, CEOA Squared Technologies,

Inc.760 591 9608

adrian@a-squaredtec.com www.a-squaredtec.com

• Adrian Pelkus, has 30 years experience developing high technology processes and products and has helped startup several technology companies. Mr. Pelkus has held numerous positions in engineering and senior management including Senior Electronic Tech, Engineering Manager, Director of Biomedical Engineering and CEO.

• Mr. Pelkus has helped develop over 140 different electronic products and is a named inventor on five issued U.S. Patents including 1994 Fortune magazine’s Product of the Year, “Baby Think it Over”, for a revolutionary “Thin Film Flexible Solar Cell” and has 4 Patents pending.

• Adrian is CEO & President of A Squared Technologies, Inc. a high-tech product development company he Founded in 1985, www.a-squaredtec.com

• Mr. Pelkus is Founder, COO of IYIA Technologies, Inc. the biomedical company he started in 2004 and is the inventor of the FDA cleared O2Misly™ Wound Treatment System. www.iyiatechnologies.com

• In 2005 Adrian reorganized the UIA registered San Diego Inventors Forum and is currently President of this group to help startup entrepreneurs. www.sdinventors.org

• In 2007 Mr. Pelkus Co-Founded Hypnoz Therapeutic Devices, Inc. as COO and is co inventor of the JED Jaw Elevation Device. www.hypnozdevices.com

Putting Your Plan Together

STEP 1 - RESEARCH

Find the Facts to Build your plan with Market – 1. Who sells what's similar, how & for how much?

2. Who wants or needs your basic idea, why and what will they pay?

IP – What is patented or otherwise protected in this area? By who?

Yourself - SWOT – what resources, talents, connections & time do you have and need – are you building a company or aiming to license your idea?

These are three main concerns seasoned investors consider when you first meet:

• Can this product make money?

• Does this person own the idea?

• Does this person know what it takes to make this idea profitable?

Putting Your Plan Together

STEP 2 - Model

Make the Facts to Build your plan with Model – 1. Sketch, illustrate, make animations, make drawings & specs

2. Clay, balsa wood, hobby shop metal & plastic a scale model

3. SLA, machine prototype parts to make a working model or expense

Test – 1. Function test in real as possible setting, make improvements

2. Measure & record results before & after, collect competitors data

3. Capture tests in video, photos and testimonies

4. Market survey prototype – will it sell? Collect market research data.

Reality checks – Can the final product be made & sold for a profit? At what quality level & quantity can you get the cost where it needs to be?

• These numbers become the “assumptions” which all the numbers to follow in your business plan are based.• When you present your idea as a working model it reduces the “can it be made” concerns an investor usually has. • Data to support the claims is always crucial and a video showing a satisfied user is helpful many ways.

Putting Your Plan Together

STEP 3 - Secure the IP

Own the Facts to Build your plan with Collect – 1. A one paragraph description of the idea - the “Abstract”

2. Make Drawings with matching Descriptions of your idea.

3. Prior art that you examined.

4. Measured & recorded results.

5. List Unique features of the idea – the “Claims”

Find – 1. Patent agent

2. Patent firm / attorney

3. USPTO.gov

File – 1. Provisional Patent

2. Patent Application & assignment

3. Trademarks & Copyright• When you present your idea as “Patent Pending” it reduces the “is it your idea” concerns an investor usually has. • Data to support the claims is helpful because proof of concept is not required to get a patent!

Putting Your Plan Together

STEP 4 - Plan the presentation

Organize the Facts to Build your plan with Decide – 1. Is the goal a company startup or a license deal?

2. Is the plan to raise funds to start the business or make a proof of concept?

Collect - For a company startup:

1. Market data

2. Your claims and assumptions

3. How you will make $ where sold

4. What are your and your teams talents

5. What funds are required run the business to BE or make a proof of concept? When will there be a ROI? What is the exit strategy?

For a License agreement :

1. Market data

2. Your claims and assumptions

3. How they will make $

Putting Your Plan Together

STEP 5 - Pick a model

Tools to Build your plan with Decide – 1. DIY

2. I don’t know enough yet and I need HELP!

DIY - Business Plan Pro by PaloAlto Software with 500 sample plans

HELP! - SCORE Workshops on writing Business Plans www.score-sandiego.org

12/1Business Plan 101: How to Develop Your Best Competitive Advantage Pt. Loma Nazarene Univ. - MISSION VALLEY Campus

CONNECT Springboard

Springboard offers free guidance and development to life sciences, clean-tech, high tech and consumer product companies in all stages of development, ranging from concept, technology transfer to start-up. Contact: Ruprecht von Buttlar Springboard DirectorEmail: rvonbuttlar@connect.org Phone: (858) 964-1309 Web: http://www.connect.org/springboard

• Deal Network

• Venture Round Table

• Tech Coast Angels

• Grant Portal

Intake Marketing Panel Finance Panel Dry-Run Panel Final Panel Exit

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Entrepreneur in Residence (EIR)

Marketing Domain Expert Financial Domain Expert

• Marketing Template

• Legal Resource

• MBA students for Market Research

• Domain Experts

• Financial Modeling Tool

• MBA students to build financial models

• Domain Experts

• Valuation Tools

• Domain Experts

• Must identify: customer need, business model

• Slides: Market Segmentation, Competitive Analysis, Competitive Differentiation, Go to Market Strategy

• Must complete: marketing plan, financial model

• Slides: Pro Forma Profit and Loss, Funding with use of funds, Corporate Development with funding strategy

• Must complete: marketing plan, financial model

• Slides: IP, Team, Traction• Must pass: Dry-Run Panel

• Table of Contents EXAMPLE............................................................... 1• II. Executive Summary........................................................................ 2• Overview.....................................................................................................2• The Initial Market –Diabetic Foot Ulcers ...............................................2• VHT* and the O2MislyTM Wound Treatment..........................................3• Clinical Information ..................................................................................3• Sales & Marketing .....................................................................................3• Management & Advisors..........................................................................4• Scientific Advisory Board.........................................................................4• III. The Enterprise................................................................................ 5• The Company .............................................................................................5• The Founder ...............................................................................................5• The Product ................................................................................................5• Intellectual Property..................................................................................6• IV. The Market...................................................................................... 6• Market Size and Growth.................................................................... 5• A Large and Growing Problem ......................................................... 6• Competition....................................................................................... 7• Marketing Strategy............................................................................. 9• Sales & Distribution......................................................................... 10• V. Product Development................................................................... 10• O2MislyTM Proven System Design................................................... 10• O2MislyTM Market Driven 3rd Generation System Design ............. 11• Manufacturing Plan.......................................................................... 11• Facilities........................................................................................... 11• VI. Key Milestones............................................................................ 12• VII. Appendices.................................................................................. 13• Comparison Matrix.......................................................................... 13• O2MislyTM Wound Treatment System.............................................. 14• “Fee-for-Use” Model....................................................................... 15• Financials......................................................................................... 16

When asked at a past SDIF meeting “what's the most important

parts of a business plan?” Peter Shaw, Shaw Management

http://www.shawmgmt.com/ and president of the SDVG

said:

EXECUTIVE SUMMARY !

EXECUTIVE SUMMARY !!

EXECUTIVE SUMMARY !!!

When you meet with investors you usually have 8 – 10 minutes to make your pitch, essentially

telling them your executive summary, best accompanied with a PowerPoint presentation – with

an embedded video!

A Squared Technologies, Inc.

New Product for License - Development Plan5 Steps TemplateExample - Simple Electromechanical device

15-Nov 22-Nov 29-Nov 6-Dec 13-Dec 20-Dec 27-Dec 3-Jan 10-JanTask Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9

Capture conceptSketch & describe need -name-Web search -name-Patent search nameMatrix eval A2Prov. /Patent file

Analyze conceptFocus group survey -name- -name-Chart results -name-

Plan ConceptWrite specs & approve same allSketch mechanism -name-RFQ ME work -name-Sketch circuit -name-Source components -name-Breadboard & test circuit -name-Design PCB -name-Design mechanicsRFQ Production costs @ 10kSLA mechanical partsAssemble PCB A2Assemble First Model A2Test first model -name-

Task Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9

Plan PresentationLogo / trademark -name-FileMarket statistics -name-Competition -name-Formulate all costs -name-List Possible partners -name- -name-Mkt plan / materials designMaterials printingPPT stats, device rendering, costs -name-Video Screenplay -name-Video Tapeing -name-Video EditPost VideoEmbed in PPTPractice PPT presentation -name- -name-

Present PresentationList License firms or agents -name- -name-Talk to "" -name-Pick "" -name-Plan approachSend videowaitwait moreset meeting week 10? 24-JanMake presentation week 12? 7-Feb

Business plan = $$No business plan = 0$

Most don’t plan to fail, they fail to plan

Adrian Pelkus, CEOA Squared Technologies,

Inc.760 591 9608

adrian@a-squaredtec.com www.a-squaredtec.com

Business Planning for Inventors

Created by:

Adrian PelkusA Squared Technologies, Inc.

www.a-squaredtec.com “Helping Inventors become Entrepreneurs Since 1985”

Presented by

Adrian Pelkus November 11th,

2010