start-ups: financing, patents, incubators the …...0 start-ups: financing, patents, incubators the...

0

Start-Ups: Financing, Patents, Incubators

The Business Model Contest THE VENTURE

Lecturer: N.N.

April 14, 2015

This set of slides can be changed

and adapted.

For example, a

logo can be

placed here

1

Overview

1. Launch process of a start-up

• Success factors

• Business idea

• Business model

• Founder team

2. Patents to protect technological inventions

• What can be protected?

• Application process

• Chances and risks

3. Financing a start-up

• Launch stages

• Loan as a financial instrument

• Funding possibilities

4. Incubators

• Definition of an incubator

• Incubator, accelerator, business angels and venture capital

5. Business Model Contest THE VENTURE

2

Agenda


2. Patents to protect technological inventions


4. Incubators


3

Stages for launching a start-up

Start-up founders do not launch businesses because they have to. They do it because they see chances.

Source: Deutscher Startup Monitor, 2014.

Development of an

innovative and market-

ready business idea

• New market and

adequate technology

or

• New technology and

adequate market

Prelaunch Launch Growth

Development of a

promising business

plan

• Market analysis

• Founding team

• Sales strategy

• Marketing strategy

• Financial strategy

if necessary: investors

Legal constitution of

the start-up

• Legal form

• Location choice

• Intellectual property

rights

• Administrative issues

Expansion phase of the

start-up

• Realization of the

business plan

• Flexible adjustments

• Corporate culture

Business modelGenerate ideas

4

Success factors for launching a start-up

Successful start-up

Business idea and

business model

Founder team

Resources:

• Financial

• Network

• Patents

Market:

• Market demand

• Market size

• Market growth

• Market access

5

Business idea: market and technology

Market

Need or problem

Technology

Solution

Innovation

• Product or service innovation: generates or increases revenues through a new

product or service

• Process innovation: enables or improves the production of goods and services

• Business model innovation: reorganizes the value creation process;

e.g. Netflix: change from online DVD rental towards a successful streaming service

Holistic view on innovation

1. Technical realization

2. Demand by customers

3. Profitability: especially when appropriation of rents is possible by the innovator; if

necessary with supporting property rights (patents, trademarks, copyrights) or

secrecy

6

Business idea: value proposition

Source: Based on Steve Blank, Clayton Christensen, Seth Godin, Yves Pigneur and Alex Osterwalder.

7

Business model: the Business Model Canvas

Source: www.businessmodelgeneration.com

Key Partners

• Who are key

partners?

• Which resources do

we obtain from the

partners?

• Which key activities

do the partners

exercise?

Key Activities

• Which key

activities are

necessary?

Customer

Relationships

• What kind of

relationship do the

different customer

segments expect?

Customer

Segments

• Who are the most

important

customers?

• What is the market

structure?

• Who are the most

important

competitors?

Key Resources

• Which key

resources are

necessary?

Value

Proposition

• Which products or

services is the start-

up offering?

• Which customer

needs are being

met?

• What is the benefit

for the customer?

Channels

• Which

communication

means and sales

channels are being

utilized?

Cost Structure

• Which are the most important costs

in this business model?

Revenue Streams

• How does the start-up finance itself in the beginning?

• What are the customers willing to pay?

8

Task: Develop a business model for

a car sharing service!

• This technology enables the basic communication between smartphones and

cars and therefore allows car sharing – regardless of the specific car model.

You could call it a „smartphone-to-car“-gateway.

• The INVERS CloudBoxx is a small device which needs to be installed in the

vehicle. It communicates with the on-board computer. INVERS owns a few

different patents in this technological area.

• Now, INVERS is the global leader in the automatic car sharing sector and

their clients include most of the major car sharing-companies. The technology

is also being used for managing vehicle fleets.

• The INVERS CloudBoxx is a server-based car sharing solution independent

from manufacturers and car models. With the „AlwaysOn“-architecture the

vehicle is continuously connected to the server via GSM. Thereby the vehicle

can be located, reserved, rented and even opened through a smartphone

app. Furthermore mileage and tank level can be checked with the app

remotely.

• Through an application programming interface (API) own applications can be

created according to individual customer needs.

• The INVERS CloudBoxx can be installed in more than 150 vehicles, allowing

a wide range of applications. Through international cell phone contracts, the

system can be used worldwide.

The CloudBoxx by INVERS

Source: www.invers.com, www.the-venture.info

• The technology is already being used

(see right panel)

• What might be a feasible business

model for the technology

CloudBoxx?

• Where could the CloudBoxx also be

used?

• Local? Regional? Global?

Your task

• This exercise might result in a real

start-up:

• The Business Model Contest

THE VENTURE starts Aug. 2015

• Guiding idea: patent seeks founder

• More: www.the-venture.info

• CloudBoxx is one of the technologies

available

Interested?

http://www.invers.com/

http://www.the-venture.info/


9

Task: Develop a business model for


Architecture of the CloudBoxx

Source: www.invers.com, www.the-venture.info

• INVERS website :

http://www.invers.com/de/

• Short video regarding the INVERS

CloudBoxx:

http://invers.wistia.com/medias/hpbipt56y4

• Short description of the technology:

http://www.the-venture.info/invers-cloudboxx/

Further information

The CloudBoxx by INVERS

• The INVERS CloudBoxx can be installed in

more than 150 car models.

INVERS development and

operation

Customer development and

operation (optional by INVERS)

Application

software

In-car technology User’s smartphone

User’s app with

Bluetooth SDK

CloudBoxxKey holder

Managed

connectivity

Hosted CloudBoxx

server API

http://www.invers.com/


10

Solution: Develop a business model for


Source: www.businessmodelgeneration.com

Key Partners

• Pilot customers for

feedback on

prototypes

• Company INVERS

as technology

supplier

• Business angels in

car sharing segment

and/or web 2.0

• Venture capitalists

• Media partners e.g.

magazines

Key Activities

• Develop

prototype

• Marketing, sales

• Customer support

Customer

Relationships

• Intuitive smartphone

application

• Hotline (24x7)

reachable from the

vehicle

Customer

Segments

• Craftsmen

• Nursing services

• Municipal utilities

• Individuals in small city

(e.g. Innsbruck)

• Leasing companies

• Middle class

companies and SME

with car pool

• Bus companies

• Taxi companies

Key Resources

• Core

technology

CloudBoxx

• Founders with

technological and

economic profile

Value

Proposition

• Car sharing of cars,

scooters, boats,

busses, utility

vehicles, craftsmen

car pool

• Logging of driving

parameters (e.g.

automatic log)

• Monitoring of tours

Channels

• Ads in professional

journals

• Online marketing

• Beginning: focus on

one city

Cost Structure

• Own car pool

• Development of a smartphone application

• CloudBoxx already offers integration into the vehicle and

the infrastructure

• Marketing, sales

Revenue Streams

• No user fee

• Subscription models: x € per month

• Intensity of use: x € per hour

Business models that are based on INVER’s CloudBoxx could have the following elements:

11

Market analysis

Customers• Who are my customers?

• What are their needs?

• Who might be potential lead

user?

• Segments?

Environment

Competition• Who are relevant

competitors?

• What are their goals and

strategies?

• Which products do they

offer?

Market in general• What is my market?

• Size, potential?

• Market structure?

• Market dynamics?

Suppliers and distribution partners • Quantity?

• Willingness to cooperate?

• Distribution of power?

General framework and

developments

Start-up

Analysis of current and future situation

12

From business model to business plan

What is a

business plan?

• Document with a clear and appealing layout

• Includes all relevant information concerning the business model

Sense and

goal?

• Realistic, extensive corporate planning

(based on the business idea)

• Critical basis for negotiations and conversations with stakeholders

(investors, consultants, public etc.)

• Information and control for the founding team

What is an

executive

summary?

• Summary of the main aspects of the business plan on two to three pages

• First impression for stakeholders

Tool for visualization to structure and link the various elements of the

business plan:

Business Model Canvas

13

Founding team: diversity

77% of all start-ups

are founded in teams

The average team size is

2.3 members

Successful and diverse founding team, combines

business and technology

Possibility to exchange

ideas

Various competencies,

knowledge, experiences

Compensation of individual deficiencies

Higher creativity More

resources,e.g. personal

contacts

Distributed decision-making responsibilities

Mutual social support

Source: Deutscher Startup Monitor, 2014

The founding team is also a crucial factor for potential investors.

14

Founding team: various roles

Roles, tasks and responsibilities in the team should be clearly defined and distributed

The founding team needs to work towards a common goal: finding a joint vision for the start-up’s

future!

A person can have multiple roles.

The generalist

• Keeps track of team work

• Takes over strategic as well as

organizational tasks and also

controlling

The specialist

• Focused on details and structures,

technical expert

• Takes over technical tasks

The salesman

• Marketing-oriented: presentation and

reputation of the start-up are

important to him

• Represents team externally

The moderator

• Provides a good working

atmosphere, motivates the team

• Brings external information into the

team work

The manager

• Leads the team

15

Nevertheless:

also single person can be a successful founder

Jeff Bezos

• Left a financial firm 1994 to realize his idea of an electronic book trading

company

• In 2014 Amazon Inc. had a revenue of 90 billion US dollars and took place six in

the Forbes ranking „Most innovative companies“

Advantages of

a single founder

• Linear and fast decision-making process, no need of consensus between different

team members

• No compromises because different visions of the start-up do not have to be

reconciled

• Simpler coordination

• No sharing of revenues

Source: http://commons.wikimedia.org/wiki/File:Jeff_Bezos_2005.jpg#/media/File:Jeff_Bezos_2005.jpg

16

Another example:

launch of the start-up Helpling through Rocket Internet

Source: Kinnevik Capital Markets Day, 2014

• Helpling is a platform for

household support

• Founded in January 2014

• Rocket Internet

systematically launches

start-ups in the area of e-

commerce

• Launch follows a strict

process

• 80 days after launch (!):

“Go Live” of Helpling

• 30 days later: expansion to

6 cities

• 30 days later: launch in

Austria

17

Agenda


2. Patents as protection for technological inventions


4. Incubator


18

What is a patent?

The patent holder is the only authorized person to use the patented invention (see § 9

PatG).

A patent is an exclusion right of limited duration, which the state grants for the

disclosure of an invention.

Novelty• An invention is considered new if it is not state of the art

(see § 3 sentence 1 PatG)

Inventive

activity

• An invention requires an inventive step; it may not be obvious given the

state of the art for an expert (see § 4 PatG)

Industrial

application

• An invention needs to have an industrial application; it

can be produced for or applied in a commercial sector

including agriculture (see § 5 sentence 1 PatG)

19

How do you apply for a patent?

Application

• General information concerning the applicant, short explanation of the invention

• Exact definition of the patent application

• Fees to be paid; attachments

Description • Extensive description of the invention, function, potential uses

Patent claims

• All attributes essential for realization of the invention

• Comparison of the claims in the examination of the application and during patent infringement claims

• Therefore: abstract formulation to ensure maximal protection

Drawings• Designs with explanations of the components in the description

• Components numbered for ease of understanding

Summary

• Maximum of 1,500 characters

• Name of the invention, abstract of the technology, drawing (in case it appears in the abstract)

Mentioning

the inventor

• If inventor and applicant are different people

• Relevant for compensation of employees beyond their salary

Filing Examination Infringement

20

What is the inspection process?


Formal examination• Check if documents were filled out correctly

• Analysis if technology is part of patent exclusions

Research (optional)

• Research to what degree the invention can be protected

• Research needed for the grant of the patent

Examination(optional)

• Necessary for a granted patent

• Examination of criteria of patentability: novelty, inventive step, industrial application, technology

Patent granted • Opposition of competitors possible in the first nine months after patent grant

Disclosure of

patent application

• Automatically after 18 months

• Thereafter, other companies and inventors can find the patent application and its technology

• Independent of the patent being granted or not

Patent declined • All deficits listed in a document with a possibility for revision

21

What happens in case of a violation?


Patent infringement

lawsuit

• In a regular court

• Patent office (e.g. European Patent Office) is not responsible in this case

• For the duration of the trial the patent is considered valid and therefore eligible for protection

Claims

• Right of information on extent of the violation

• Injunctive relief

• Claim for indemnity on basis of (1) the lost profit, (2) the profit the infringing party made

or (3) costs for a license

Coffee capsule dispute between Nespresso

and Ethical Coffee Company to court

Patent infringement in France

Coffee capsule dispute: Nespresso competitor claims

150 million euros

Zurich. The coffee capsule dispute between market leader Nespresso and its

competitor ethical coffee company (ECC) that has been raging for years ends up

in court again. ECC believes one of their patents to be infringed by Nespresso

as they are using a special technique for themselves now.

Patent infringement: Apple has to pay

532,9 million us dollars

Apple has to pay smart flash 532.9 million us dollars for a triple patent

infringement by order of a Texas jury. The plaintiff’s claim, however, was

significantly higher and Apple wants to appeal this ruling.

22

What are the costs

from a patent application to a granted patent?

Extremely simpleElectric switch; coat hanger; paper clip; diapers; earmuffs; ice

cube tray

6.500 € - 8.300 €

Relatively simpleBoard game; umbrella; retractable dog leash; belt clip for cell

phone; toothbrush; flashlight

8.300 € - 10.100 €

Minimally complexPower hand tool; lawn mower; camera; cell phone; microwave

oven

10.100 € - 11.000 €

Moderately complexRide-on lawn mower; simple RFID devices; basic solar

concentrator

11.000 € - 13.250 €

Relatively complexShock absorbing prosthetic device; basic to moderate

software or systems

13.250 € - 15.500 €

Highly complexMRI scanner; PCR; telecommunication networking systems;

complex software or systems; satellite technologies

> 15.000 €

Type of invention ExamplesCosts of patent office

and patent attorney

Source: www.ipwatchdog.com/2011/01/28/the-cost-of-obtaining-patent/id=14668 (values converted in Euro and official fees added, with US $ 1.10 for 1 €)

23

What is impossible to patent?

In Germany a few things are excluded from patenting:

• Business ideas, plans and regulations

• Plant and animal species

• Under certain circumstances inventions in microbiology,

biotechnology and software can be patented

Furthermore patent protection is typically not possible for:

• Substitution of a material (e.g., plastic for metal)

• Chance of size/form of an existing machine/component

• Making something more transportable

• Substitution of one element with a similar one

„Method for producing

transgenic animals“

European Patent

EP 0169672 B1

24

Patent EP 0193544 B1 for a conducting component

by LEGO A/S and Interlego AG

1

2 3

4

5

6

1 Patent number: EP 0193544 B1

2 Application date of the patent: August 2,1985; Patent expires therefore on August 1, 2004 at the latest if owner

does not decide the patent to be lapsed earlier

3 Issue date of the patent: March 15,1989

4 Owner of the patent: LEGO A/S and Interlego AG

5 Inventor of the patent: Erik Bach

6 Patent attorneys: Diehl, Gläser, Hiltl & partners

Source: www.google.com/patents/EP0193544B1

25



7

7 Drawings of the invention with all characteristics,

which are referred to in the text (1,2,3)


26



88 Component for a building set, comprising a plurality of

contiguous module units, some of which have at least

one coupling pin coaxially protruding to the central

axis of the module unit, so that the common centre

distance of the coupling pins of a multiple of the

module measure equivalent, wherein the component

further comprising complementary coupling means for

cooperation with coupling studs of an adjacent

component for mechanically coupling together the

components in a plurality of possible mutual angular

positions, characterized in that the component has an

input connected to primary and secondary first contact

areas in the component the first current path, and an

electrically insulated from the first current path, with

primary and secondary other contact areas in the

component having the second current path connected,

wherein the primary contact areas are designed so

that electrical connection with secondary contact areas

is produced in a subsequent part, and in that the

contact zones spatially [...]


27

Which chances and risks do a patent have?

• Control over patent and invention

• Competitors cannot apply for the same

patent

• With systematic use of legal actions a

monopoly for the invention can be created

• Reputation: Innovation and stability - can

give a start-up a higher valuation

• Invention can be announced

communicated, e.g. to large corporations

because it is protected

• Collaboration with large corporations

possible

• Monitoring competitors through their

patents

Chances Risks

• Disclosure of the invention: after 18

months everybody can review the

invention publicly

• Application process expensive

• Maintenance expensive due to annual

fees; patent duration fees increase every

year of patent duration

• Small companies and start-ups have more

difficulties enforcing patent infringements

by large companies because of high legal

expenses and lawyer costs

28

Agenda




4. Incubator


29

Why are bank loans almost impossible to obtain for a start-up?

Securities

Cash

Experience

Established

companyStart-up

✔ ✖

✔ ✖

✔ ✖

Bank loan possible No bank loan possible

30

Which stages does a start-up launch have?

Source: www.fuer-gruender.de/kapital/eigenkapital/venture-capital/

Seed phase Start-up phase Expansion phase

• Pre-launch stage

• Product not finished yet;

maybe prototype

available

• Funds necessary for

R&D and launch

• High uncertainty

• Low financing need

• Growth stage

• Product is finished


expansion

• Low uncertainty

• Moderate to high

financial need

• Launch stage

• Product is ready


marketing and

production

• Moderate uncertainty

• Moderate financial need

31

What financing possibilities do exist?

Launch phase

Expected capital (in % investment)

Support

Type of investment

Origin of funds

Loan period

• Seed phase

• < 30.000 €

• 20 to 100 %

• Is desirable, but not always

possible

• Often with friends and family

• Company shares

• Subsidies

• Private individuals (friends and

family)

• Government support

• Private: without limit

• Public: < 7 years

• Seed phase

• Start-up phase

• 30.000 € to 500.000 €

• 10 to 30 %

• Management in combination

with provision of capital

• Business angels used to work

in the same industry

• Company shares

• Private individuals

• 2 – 7 years

• Start-up phase

• Expansion phase

• 500.000 € to 10 Mio.€

• < 20 %

• Management in combination

with provision of capital

• Venture capital fond

managers; “smart capital”

• Company shares

• From a fund (funds raised

from third parties)

• Flexible

• Usually: 3 – 7 years

Seed financing Business angels Venture capital

32

Financing of start-ups in Germany in 2014

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

% named by founders

Sources for start-up funds Incubators in Germany

Source: Mücke, Sturm & Company; Deutscher Start-Up Monitor 2014

33

Agenda




4. Incubator


34

Medical

analogy

Entrepreneurship

Offered

Services

Goal

• Incubator for premature and recently born babies

• Function: ideal climate for the development of new-borns

• Used in field of start-ups and their financing

• Function: perfect conditions for building a company

• Public institutions and organizations

• Infrastructure: office space, computers, infrastructure

• Service portfolio: IT, media, banks, consulting, coaching, mentoring

• Network: investors, consulting agencies, important individuals

• Fast realization of the business idea into market-ready products

• Continued existence of the start-ups; no “one hit wonder”

• Growth potential for the start-up entrepreneurs

The term „incubator“

In incubators start-ups are being transformed into competitive companies.

35

Connection between incubator, start-ups,

business angels and venture capitalists

Incubator as basis

• Consulting function

• Provision of contacts to investors

Start-ups

• In need of financial support

• Coaching und network helpful

Seed capital

• Financial funds needed early in corporate

development

Business angels und venture capitalists

• Invest in start-ups

• Advice and network

• Money, also seed capital

Start-upStart-up Start-upStart-up

Incubator

Business

angels

36

Differences among incubators,

accelerators and venture capitalists

Incubator

• Provision and procurement of financial

means

• Consulting functions and network of partners

(lawyers, investors, consultants)

• Provision of workspace

• Standalone incubator

• Establishment by a team

• Heterogeneity concerning know-how,

professional experience, sectorial

knowledge, etc.

• Corporate incubator

• Incorporated or outsourced autonomous

unit of a larger corporation

• Homogeneity concerning know-how,

experience because of identical parent

company

Typical

services

Venture capitalists

• Focus on

provision of

financial means

• In return shares

of the start-up

• Consulting

function by

means of

contacts and

experience

• No further

services in

contrast to

incubator and

accelerator

Accelerator

• Focus of

accelerators on

existing

companies

• Procurement of

funding

possibilities

• Company

accelerator

• Consulting

function

• Contact network

• Incubator focused

on new start-ups

Source: Achleitner, P. D.-K., & Engel, A. j.-K. (2001). Der Markt für Inkubatoren in Deutschland.

37

Agenda




4. Incubator


38

Business Model Contest THE VENTURE

Launch a start-up

Launch your start-up with

existing and promising

technologies

Patents

Use our patents and

technologies as a basis for

your start-up

Prizes

Benefit from our valuable

assistance for your launch

Partners

„THE VENTURE“ is backed

by strong partners, which

can help your start-up

Source: www.the-venture.info

Leading idea: „Patent seeks founder“

Further information: www.the-venture.info



39

Principle

Starting point

Goal

Prizes

• Leading idea: „Patent seeks founder“

• Students or graduates launch start-ups based on existing patents and technologies

• Structured process similar to a business model competition

• Similar to an incubator: matching of ideas and teams

• Patents/technologies as a basis for the development of a business model

• Patents as a fundament for start-ups

• Ambitious young entrepreneurs with entrepreneurial drive

• Transformation of an innovative technology into a successful business model

• Launch of start-ups based on existing patents and technologies

• Free license for patent or technology for 1-2 years

• Know-how of strategic partners

• Contact to investors for seed capital

Information on THE VENTURE



40

Structure of THE VENTURE

1 32

Choose a patent!

Look at all the available patents and

technologies.

Apply!

Apply until August 15, 2015 as a

team or individual.

Final pitch.

The final pitch takes place

December 1st, where the winners

will be chosen by the jury.


Further information: www.the-venture.info



41

Structure of THE VENTURE:

similar to a business model contest

Patents and

technologies

Application phase

Teams or

individuals apply

with CV‘s, choose a

patent and submit a

first draft of a

business model

Coaching

Optimizing

together with

coaches; then

pitch in front of

THE VENTURE-

Jury

Start-ups

Business modelling

Refinement of the

business model and

presentation during

auditions


Deadline

Aug 15, 2015

Auditions

Early Okt. 2015

Final Pitch

Early Dec. 2015


42

Assessment criteria at THE VENTURE

concerning submitted business models

Infrastructure

Concept regarding

infrastructure

especially IT

Patents

Reference to patents

and technology

landscape

Marketing

Market development

and sales; target

market and market

segmenting

Team

Composition of the team and

individual backgrounds

Idea

Degree of innovation

and novelty of the idea

Product

Concept and feasibility of the

product or service

Market

Definition of the

market and

environmental factors

e.g. market growth



43

Supporting universities Media partner

THE VENTURE hat breite Unterstützung (Auswahl)

Quelle: www.the-venture.info

Supporting organizations


44Quelle: www.unsplash.com

THE VENTURE

www.the-venture.info

Patent seeks founder.

start-ups: financing, patents, incubators the …...0 start-ups: financing, patents, incubators the...

Documents