the university and its companies - accelerate cape...
TRANSCRIPT
THE UNIVERSITY AND ITS
COMPANIES
February 2016
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INNOVUSMaking Innovation Matter
TECHNOLOGY TRANSFER
AUTM definition: "the process of transferring scientific findings from one organization to another for the purpose of further development and commercialization."
This transfer is generally effected by means of IP licensing agreements (contracts) between universities and private companies or publicly owned commercialization agencies.
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Time for a new strategy?
University technology transfer has internationally been
largely dominated by a business model of licensing
university patents to the highest – and most often, only -
bidder.
This model is unprofitable for most universities and
sometimes even risks alienating the private sector.
THE REALITY
A new and smarter model has emerged and is increasingly
being adopted.
In this new model universities nurture their own start-ups
and make available their patents to them.
SOLUTION?
• USA: <17% of US TTO’s are either profitable or
breaking even
• AUTM 2014: <1% of US TTO income from equity
• Seems that US universities start companies as licensing
strategy
• Elsewhere: Universities often not allowed to have equity
in companies
• Considered risky and resource intensive
• But: noticeable shift towards a spinout strategy
• Question: How can we make the biggest impact?
SPINOUTS AS TECH TRANSFER STRATEGY
THE CHANGING ROLE OF UNIVERSITIES
Teaching
Research
Innovation
Graduates
Graduates
Graduates
Publications
PublicationsIP Entrepreneurs
Researchers
Industry
Knowledge Region
UNIV IN THE ECOSYSTEM
• Cambridge University
◦ Cambridge Science Park (1969)
◦ Created >50 startups and entrepreneurs outside university
created their companies around the university
◦ Today, 3000 companies in greater Cambridge, 1000 are
pure innovative companies
• Munich (Medical technology), Finland (ICT, opto-
electronics and life sciences)
EUROPEAN EXAMPLES
EUROPEAN EXAMPLES: CAMBRIDGE
• 100th spinout company in 2013
• Gemma Frisius Fund
• 5 Science Parks around Leuven (10 years)
• Several incubators with high-tech labs and companies
• Strong networks
NOW IN LEUVEN
Gemma FrisiusFund Created
LESSONS FROM LEUVEN (1)
Leuven
Critical mass of high Quality Research
FavourableEntrepreneurial
Climate
Legal Framework
Clear incentives and Policies
Professional networks
Seed or VC Fund
Infrastructure
Technology Transfer Entity
Industry and Government Support
Quality of Life
LESSONS FROM LEUVEN (2)
“But most importantly, we made our people aware that it could be done. For the first time, scientists and engineers were pointed in the direction that their intellectual property not only had academic value but commercial potential.”
- Martin Hinoul
UNIVERSITIES AND THEIR VC FUNDS
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Meanwhile back in South Africa
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Do we have the ingredients?
• PCT applications = first international step
• Published by World Intellectual Property Organisation
(WIPO) six months after application (normally month 18
of patent life)
PATENTS
PATENTS (PUBLICLY FUNDED): 2009 - 2015
84
66
58
58
25
22
17
11
11
10
9
8
7
5
4
3
2
1
1
1
0
0
0
0
0
0
0 10 20 30 40 50 60 70 80 90
Stellenbosch University
University of Cape Town
CSIR
University of the Witwatersrand
North-West University
University of Pretoria
University of Kwazulu-Natal
University of the Free State
Nelson Mandela Metropolitan University
University of the Western Cape
Tshwane University of Technology
Medical Research Council
University of Johannesburg
Vaal University of Technology
Cape Peninsula University of Technology
Agricultural Research Council
Rhodes University
University of Limpopo
University of South Africa
University of Zululand
University of Fort Hare
University of Venda
Walter Sisulu University
Central University of Technology
Durban University of Technology
Mangosuthu University of Technology
Total published PCTs, 2009 - 2015
Published PCT Applications
PATENTS (PUBLIC AND PRIVATE): 2009 - 2015
84
73
66
58
58
26
25
25
24
22
21
17
14
11
11
10
10
9
9
8
0 10 20 30 40 50 60 70 80 90
Stellenbosch University
SASOL Technology
University of Cape Town
CSIR
University of the Witwatersrand
DETNET South Africa (Pty) Ltd
North-West University
Element Six (Production) (Pty) Ltd
Discovery Holdings Limited
University of Pretoria
AEL Mining Services Limited
University of Kwazulu-Natal
INSIAVA (Pty) Ltd
University of the Free State
Nelson Mandela Metropolitan University
University of the Western Cape
LEVINSOHN, Steven Mark
Tshwane University of Technology
Poynting Antennas (Pty) Ltd
Medical Research Council
Published PCTs, 2009 - 2015
High risk tech funders in innovation value chain
Idea VC
exit
Public sector research:
NRF, Science Councils,
Universities
Angel
THRIP ????
SPII
Other PE
Convergence Partners, Inspired Evolution,
Intel Capital, Knife Capital, CorCulture,
HP Ventures Africa, TriVest
Seed stage Start Up Venture ExpansionResearch
InVenFin, 4Di Capital, Acorn, Halls,
GroVest, EchoVC, Redwood Capital,
Savannah Fund, AngelHub
Technology Innovation Agency
IDC New Industries (sectors)
THRIP ????THRIP ????
Crowd Funding ???
Source: Ela Romanowska, WITS Enterprise
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Case Study
Nedbank Stellenbosch University LaunchLab
• Did not have a critical mass of university spinouts
• Focused on Step 2: Bringing entrepreneurs to the
university
• Opened the LaunchLab on 1 Aug 2013
◦ Open to any entrepreneur
• Then we waited....
SO, WE TRIED IT
THE NEDBANK SU LAUNCHLAB
THE NEDBANK SU LAUNCHLAB
LAUNCHLAB COMPANY DEVELOPMENT TRACKS
* Meeting rooms and hot seats ** Preference for High-Growths and TTO Spin-outs
Source
TTOProjects
StudentVentures
ExternalEntrepren
eurs
Selection
Pitch-In Meeting
IdeaProgramme
Co
mp
any
Ap
plic
atio
n C
rite
ria
Post Incubation
Development Track
High Growth
TTO Spin out
Ideas Winners
Service/ Social
Community
Online Content
Free Office Space
Seed Capital and Market Access
Free Hot Desks**
Accounting Services
Service Provider Network
Talks
Countdown Programme**
Acceleration Programme**
Mentor Programme
Intern Programme**
Rent Facilities*
Coaching Programme
Online Portal**
Rent Facilities*Free Facilities
Co
mp
any
Exit
Cri
teri
a
LAUNCHLAB VERTICALS
27
Payments & Big Data
Paid Media Cleantech Agritech Education
The results surprised us!
GROUP OF COMPANIES
• Unistel Medical Labs
• SUNMeDIA Stel
• SUNMeDIA Bloem
• SUNMeDIA Metro
• SUSPI
• Diacoustic Medical Devices
• SNC
• SWET
• GeoSUN Africa
• Aquastel
Startups @ Beginning of 2014
• LaunchLab
• USB ED
• Surfactant Medical
Technologies (SMT)
• Custos
• Sharksafe Barriers
• Vulamanz
• Suntrack Analytics
Startups in 2014
• SUDEM Digital Elevation
• SUN Magnetics
• BridgIoT
• Cargo Telematics
Startups in 2015
(Launchlab opened 1 Aug 2013)
TechnologyTechnology relatedNo technology
2016 Pipeline
• CubeSpace
• Heliolab
• Aerospora
• Assisted our startups to raise >R85m in past year
• 201 Employees (2014)
• R187 m turnover (2014)
• Our stake ranging 8% - 100%
• 6 out of 10 are profitable (start of 2014)
GROUP OF COMPANIES
• Prototype development
• Intellectual Property protection
• Assistance with business plan
• Business model workshop
• Directorship training (IoD courses)
• LaunchLab plus programmes
• Set up company
• Legal
• Attract investors and negotiate
• VAT registration, VAT assessments,
• Tax clearance certificate
• Open bank account
• IP management
• Online shop transaction management (Turnkey solution)
• Project manager
• Access to SU trademark
SUPPORT OFFERED FREE OF CHARGE TO ENTREPRENEURS
SPIN-OUT COMPANY GOVERNANCE FRAMEWORK
• Minimum corporate governance levels in the areas of:• Business strategy and Implementation• Composition and selection of BoD• Directors and their responsibilities• Functioning of the board• Financial reporting and communication• Risk management and internal control• External and internal audits• Integrated sustainability reporting
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The University Technology Fund
“Creating a single pipeline of all the top universities’ technologies towards one fund”
RATIONALE FOR A UTF
R D GAP VC PE
R1.2bn/annum
40-70 Disclosures
C
P
Company and/or Patent
Equity !
Patent
Prototype
Business
Plan
RATIONALE FOR A UTF: FAULTY MODEL
R D MTF(?) VC PE
R1.2bn/annum
40-70 Disclosures
C
P
Company and/or Patent
Patent
Prototype
Business
Plan
Company 1
Company 3
Company 2
Company 4
Faulty Commercialisation Model
CHANGE THE COMMERCIALISATION MODEL
R D VC PE
R1.2bn/annum
40-70 Disclosures
P
Patents and Virtual Companies
C
C
C
C
Incubator
CHANGE THE FUNDING MODEL
Increase Risk
Decrease Risk
R100mR75mR25m
PLACING THE FUND AT A UNIVERSITY
R D VC PE
R1.2bn/annum
C
C
C
C
P
R75mR25m
• Invests in projects with strong commercial potential
• TTO manages and invests R25m portion of fund
◦ Primarily development work
• Investment Committee (IC) invests R75m portion
◦ Primarily in Newco’s
• IC appointed by
◦ Umbrella Fund Manager
◦ TTO BoD
◦ University Council Fincom
• Fund gets ownership in Newco’s and portion of license fees
VC TYPE FUND: UNITECH FUND
VC TYPE FUND: STRUCTURE OF UMBRELLA FUND
General Partner Limited Partners (Investors)
Umbrella Univ Fund(Limited Partnership)
Maties Fund Ikeys Fund UWC Fund Wits Fund
Ownership of the Fund
Ownership of the Umbrella Fund in UniFunds
Fund Management
VC TYPE FUND: STRUCTURE OF INSTITUTIONAL
FUND
Stellenbosch University Umbrella University Fund
Innovus (Pty) LtdMaties Fund
(Limited Partnership)
Investment Investment Investment Investment
Ownership of the Fund
Fund/InvestmentManagement
No Management Fees
GOING FORWARD: VC TYPE FUND: MODEL
R75mR25m
TTO invests
Investment Committee
UTFR500m
MTFR100m
ITF
UWC
SU+AlumniinvestR20m
WTF
+otheruniversities
• World class technologies from leading universities on the
African continent
• Highly reduced management fees
• Attracts co-investors
UNITECH FUND
Anita Nel
+27 21 808 3079
www.innovus.co.za
THANK YOU
Anita Nel
+27 21 808 3079
www.innovus.co.za
THANK YOU