Technology Development Process

UConn R & D works closely with the Center for Science and Technology Commercialization (CSTC) to evaluate potential business opportunities based on University research. The CSTC manages the University’s Intellectual Property (IP). Each year the University receives approximately 75 unsolicited invention disclosures from the faculty. UConn R & D reviews, with CSTC, University IP for the potential to create technology-driven new businesses. The Company also interacts directly with faculty, staff, and students at the University schools and departments to discover nascent technologies that have not been disclosed and that have the potential to serve as the foundation for new business start-ups.

Process
The general process for the review and selection of potential platform technologies includes a team of individuals from the CSTC and UConn R & D. CSTC and UConn R & D evaluate the invention disclosures as they are received. Where appropriate or needed, outside reviewers are also asked to assess the disclosures. Those technologies that are deemed to have commercial potential are further reviewed by the team to determine the potential for a new business. The technologies with the greatest potential to become a new business are subjected to additional levels of scrutiny. Only those inventions that meet specified criteria will be selected for further evaluation by UConn R & D.

Criteria
The initial criteria for an invention to be a candidate for acceptance by UConn R & D is:

• The invention must be a “platform” or “enabling” technology.
• There is a large (at least $300 million), lucrative market with growth potential and high margins.
• The technology can be adequately protected through patents, copyright, or trademark to create barriers that make market entry difficult for competitors.
• The technology is scalable and can be improved to create a sustainable competitive advantage.
• The estimate of the net present value of the return (less the costs of getting the business going) is much greater than the value that can be obtained by executing a typical license with an existing company.

Through meetings with the inventors, discussions with outside experts and rigorous due diligence by the UConn R & D staff, the following additional criteria is considered:

• Is a prototype or proof of concept model available?
• Do the inventors have a reasonable understanding of what is required to build a business, and what their role may be?
• Does the business model have a visible “path to profitability?”
• Are the initial management and financing needs reasonably clear?

Screening
The overriding question to be answered in the evaluation and due diligence process is: How will the company make money? In going through this process, UConn R & D looks to answer the following questions:

• Why will this business work?
• Who will make this business succeed?
• What are the key and essential markets for success?
• Is this the right time to bring the product to market?
• How will this all be brought together?

To answer these questions, the Company examines the following:

• What problem is being solved?
• How is the problem being solved today and who is solving it?
• How does the new product/solution improve on what’s available today (is it better, faster, cheaper, etc.)?
• Is the product good enough and/or cheap enough to cause people to switch?
• What is the need/demand for the product or service?
• How big is the need/demand today and will it grow in the future?
• Who, specifically, is the customer?
• Will the customer pay for the product? If so, how much?
• Does the customer control the purchase of the product or the service? Who signs the P.O. and who signs the check (are they the same or different people)?
• Who else, other than obvious competitors, might want to enter this field?
• Is the business model scaleable in a reasonable timeframe?
• What will it realistically cost to build the business?
• How will the product/service be marketed and what is the sales cycle?
• Is the prime source of revenue sales of a single product or service or are there continuing sources of revenues such as service contracts or sales of consumables?

Those technologies that fit the initial criteria will be “pushed through” the screens above. Following this screening process, those projects that can be shown to have the best opportunity for success will be selected for further action by UConn R & D.

Business Plans
Following selection, UConn R & D staff draft a preliminary business plan and form a company (NewCo.). The staff also works with the inventor(s) to obtain initial seed or series A funding. UConn R & D staff are actively involved in the early stages of the company and work with their network of professionals to find initial management, space and other critical elements. In some cases, the staff may take on interim management roles to facilitate the accomplishments of key milestones.

UConn R & D next helps NewCo. management draft a solid business plan. Much of the data gathered in the due diligence process described earlier is incorporated at this stage. This business plan is used as the roadmap for the Company’s further development and in meeting with venture capital firms or angel investors to obtain funding. UConn R & D staff remain actively involved with the Company and the Board to find the appropriate and best liquidity opportunity, and then assist, as needed, in planning for and completing the liquidity event.