University of Wisconsin-Madison

New Business Startup Initiative

Allen J. DinesAssistant Director

Office of Corporate Relations

May 2006

Slide 2 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

Madison: a “Hotbed of Biocapitalism”

• Some highlights about Madison from Forbes Magazine (May 2004):

– In the past 10 years, 120 new tech companies employing 8,000 people

– Average salary $60,000. 2% unemployment vs. 5.5% for country.

– University employs 17,000 but helped create 70,000 jobs, generating $4.7B in direct and indirect output. (NorthStar Economics)

– 2% of Madison’s population hold advanced degrees – the highest concentration of advanced degrees in the country

Slide 3 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

UW Research and Company Formation Metrics

• 235 companies spun out of UW-Madison*• Aggregate gross revenues exceed $1billion• 98% still in Wisconsin• About 50% have received professional investment• Examples of wealth created by local startups:

– Bone Care > Genzyme ($600 mil)

– Tetrionics > Sigma Aldrich ($85 mil)

– Pan Vera > Aurora/Invitrogen ($90 mil)

* Source: P. Z. Sobocinski, Creating High Tech Business Growth in Wisconsin, 1998, updated, 2005

Slide 4 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

Why License University Technology to Startups

• Many technologies are too early or risky to attract established companies

• Inventor interest

• Promote local economic growth

• Promote ties to local hi-tech business for sponsored research

• Possible financial rewards

Slide 5 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

Ingredients for Startup Business Creation

Technology Capital

Management

Implementation

Plan

Slide 6 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

Wisconsin Resources for Startup Creation

Technology Capital

Management

Implementation

Plan

Slide 7 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

Models for University Startup Development

Hands-in-pocket: Traditional policies and practices

Hands-Off: Policies / practices that encourage start-ups

Hands-On: University takes active role in forming the startup as a licensee

Up to your Elbows: University takes active formation and operational role (investment, incubation, management)

Slide 8 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

Startup Development at UW Madison: A Blend of “Hands-on” and “Hands-off”

Flexible Licensing Terms

Progressive

University Policies

Business Developmt Assistance

Assist in Recruiting Talent

Assist in Recruiting Funding

Participate in Business Operations

Direct Investment

“Hands-in-Pocket”

“Hands-Off”

X X x x x

“Hands-On”

X X X X X

“Up-to-your-Elbows”

X X X X X X X

Roles in Formation Roles in Operations

Slide 9 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

The players in UW-Madison Startup Business Development

• Office of Corporate Relations– Assists startups with business connections – Provides faculty/staff with single point of entry access to UW resources– Overall program focus, integration and communications

• WARF - Patents, licensing, guidance, leadership• University Research Park

– Encourages partnerships between business and UW researchers – Provides a place to grow for UW-related businesses

• School of Business– Weinert Center for Entrepreneurship – Business Technology Development Institute

• Campus-wide resources – UW Technology Entrepreneurship Cooperative– Wisconsin TechSearch– Entrepreneurship Association

Slide 10 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

Resources at UW-Madison to help Startup Businesses

Pre-startup initiative Post-startup initiative

Assistance Consultation/referrals (OCR)

Gap funding (I&EDR)

Short courses (TBDI)

Licensing assistance (WARF)

Planning/analysis (WAVE)

Business incubation (URP)

Mentoring program (pending)

Micro-grants program

UW Library access point at Univ. Research Park

Events Tech Transfer Seminar Series (Graduate School)

High Tech Happy Hour (OCR, et al)

Entrepreneurship Association

Ad Hoc events (various)

Early Stage CEO Breakfasts

First Look Investor Forums

WARF Gilson Series Seminars

WARF Gilson Researcher Roundtables (Nov05)

Publications Entrepreneurship resources website (OCR)

SBIR/STTR support website (DOC)

Guide to new business ventures UW-Madison

Inventing Wisconsin DVD

Slide 11 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

WARF Startup Development Support

• WARF/OCR Startup Initiative Partnership

• Disclosure reviews to identify startup opportunities early– Historical mechanism: Inventor/faculty driven

– Current focus: market-opportunity driven

• Licensing– Standstill pending license

– Equity in lieu of cash license deals

• Follow up monitoring/support• Gilson entrepreneurship seminar series and research

roundtables

Slide 12 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

The UW-Madison is Only Part of the Solution

State-wide Institutions

- Department of Commerce- Wisconsin Technology Council- Wis Entrepreneurs Network- Wisconsin Angel Network

University Resources- OCR- WARF - URP- UW-TEC- WAVE- TBDI- TechSearch

Industry InfrastructureService providers to Hi-tech companies -Legal -Accounting -Business planning -Search/recruiting -Insurance -Public relations - Facilities/equipment - Prototyping shops

Financial Resources- Friends and family- Grants (SBIR/STTR)- Angels- Venture Capital- Corporate Partnering- Banks

Networking OrganizationsWIN – WBMA –Accelerate Madison

Slide 13 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

Working Conclusions on How to Foster Startups

• Connect faculty inventors early with– Management-savvy risk-takers (entrepreneurs)– High-tech-savvy service providers

• Focus on the business opportunity, not the technology innovation

• Cultivate angels and VCs seeking seed stage investments

• Manage faculty/inventor expectations

Slide 14 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

In summary…We need to move from this

Technology Capital

Management

Implementation

Plan

Slide 15 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

……to This

Technology Capital

Management

Implementation

Plan

Slide 16 May, 2006 Prepared by Allen Dines, Asst. Dir. Corporate Relations

For more information:

• My Email: ajdines@wisc.edu

• Startup Guide: http://www.corprelations.wisc.edu/docs/startupguide.pdf

• OCR Entrepreneur’s Page: http://www.corprelations.wisc.edu/entrepreneurs.html

• WARF Startups Webpage http://www.warf.org/inventors/index.jsp?cid=16

• Graduate School Commercialization Grants http://info.gradsch.wisc.edu/research/techtrfgrants/grantopps.html

• SBIR/STTR Information http://www.wisconsinsbir.org/

• Regional Hi-Tech News, Commentary & Analysis http://wistechnology.com