Tech Transfer eNews Blog

Purdue start-up uses a smart steering wheel cover to address drowsy driving


By Jesse Schwartz
Published: November 20th, 2019

A spinout from Purdue University is working on a monitoring technology that could help prevent accidents caused by drowsy driving. continue reading »

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Equity Terms and Distribution in University Start-Ups: A Best Practice Collection


By Jesse Schwartz
Published: November 20th, 2019

Striking the right balance when structuring equity deals with faculty start-ups is a delicate challenge that requires a full understanding of the financial levers involved. Each party will be impacted as the new venture gains value while taking on new partners — and a more complex cap table. And when founder’s equity must be divided at the outset, it’s even tougher to sort out an agreement that works for all — and for the health of the company — over the long term.

Equity Terms and Distribution in University Start-Ups: A Best Practice Collection, produced by Technology Transfer Tactics’ Distance Learning Division, provides over 3 hours of instruction on how to best draft equity and dilution clauses with the long-term in mind. We have partnered with top IP licensing experts to help you draft agreements that walk this tightrope effectively, protect your university’s and your faculty’s interests, and prevent investor turn-offs that can doom the start-up’s prospects at critical stages of growth.

For complete program details, CLICK HERE.

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U of Delaware start-up receives $3.4M DOE award to make fuel cells less expensive


By Jesse Schwartz
Published: November 20th, 2019

A University of Delaware (UD) start-up recently secured $3.4 million in funding from a U.S. Department of Energy (DOE) program that will support the development of a method to make fuel cells much more economical. continue reading »

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Army scientist develops software that converts drone videos into 2D and 3D maps


By Jesse Schwartz
Published: November 20th, 2019

A U.S. Army scientist has created software that converts streaming drone video footage into 2D and 3D maps in real time. continue reading »

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U of Hong Kong researchers launch start-up to commercialize technology that converts waste heat into electricity


By Jesse Schwartz
Published: November 20th, 2019

A research team at the University of Hong Kong (HKU) has invented and launched a start-up around a Direct Thermal Charging Cell (DTCC) that can convert heat to electricity, which they say has significant potential to reduce greenhouse effects by capturing exhaust heat and cutting down primary energy wastage. continue reading »

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Plight of the Patentee: The Case for Restoring Inventors’ Rights set for release and related Kickstarter campaign


By Jesse Schwartz
Published: November 20th, 2019

Intellectual property and valuation expert David Wanetick’s seventh book, Plight of the Patentee: The Case for Restoring Inventors’ Rights is scheduled for release in January 2020. continue reading »

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Comings and goings


By Jesse Schwartz
Published: November 20th, 2019

David Conover, vice president for research and innovation at the University of Oregon (UO), will retire from his role at the end of the academic year.

Since 2016, Conover has overseen UO’s research enterprise and helped bring about a new period of growth in research and development projects, partly by creating a system that helped encourage and incentivize faculty to apply for more research grants. He has supported the university’s research centers and facilities, encouraged innovation and commercialization through strategic partnerships and tech transfer initiatives, and coordinated UO’s research proposal submissions. The university plans to launch a national search for Conover’s successor. The goal is to fill the position prior to his departure.

Source: Around the O

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Beware of employee equity, the credit cards of the venture community


By Jesse Schwartz
Published: November 13th, 2019

The following is excerpted from a guest column by Dror Futter, partner with Rimon Law, and Natasha Azar, senior manager of university relations with Osage University Partners. The complete article appears in the October issue of Technology Transfer TacticsCLICK HERE for subscription information.

When hiring venture executives and employees in the early stages of a university start-up, the buzz centers around equity. For successful ventures, these equity rights, often issued when the equity is worth pennies a share, hold the potential of delivering great wealth to those fortunate enough to receive them. However, there is an often ignored drawback to equity compensation — simply stated, it is the credit card of the venture world. As opposed to salaries that directly impact budgets, equity grants are “painless” and only upon exit of the venture does the true cost of the grants become apparent.

The painlessness of equity grants makes it a very tempting compensation tool for cash-strapped early-stage start-ups. But these ventures often risk making outsize equity grants to employees who, while important in the short term, will not have a significant long-term impact on the company. Many ventures fail to recognize that equity needs to be budgeted and, as a result, “spend” too much too early, leaving less available for additional grants to round out the leadership team and make other critical hires.

For university spinouts that often need to hire a large part of their future executive teams, mistakes in early equity grants can unnecessarily dilute founders’ and university’s common stock positions.

To understand the impact of dilution on a founder’s stake, Figure 1 below shows a hypothetical ownership summary that reflects typical ownership through financing rounds and how the dilution plays out.

As the figure shows, while the nominal value of the founder’s stock is increasing, even in a successful venture, the founder’s ownership percentage declines steeply as a result of dilution. In the hypothetical, the company has raised a total of $41 million in four funding rounds. Each of the funding rounds represented an “up round” where the pre-money represented a significant increase from the post-money valuation of the prior round. Yet the founders’ share dropped from 30% to 12% — in other words, a smaller piece of a larger pie.

The average successful tech start-up exits for $240M after a series of raises totaling approximately $40M of capital. This amount of capital is typical of the industry, and it is distinct from the need to refresh the start-up’s option pool across each financing.

Fueling growth with investment capital is the tool that allows companies to expand their team, footprint, facilitation, and marketing. In the typical funding and exit described in the hypothetical, the founders, founding team, and employees were diluted over time. While 12% of a $240M exit is definitively a life-changing event, the path to even larger personal upside can only be achieved by reducing dilution and increasing valuation.

The dilution equation is simple ($-raised/$-valuation), but the implications of driving the numerator to $0 or the denominator to unicorn status is much more nuanced. When founders are building their cap tables, they should think about how taking more dilution will ultimately create a bigger pie to take a slice of down the road. For founders and their university tech transfer partners, this dilution can be exacerbated by poor choices in equity grants to employees.

The entire detailed column excerpted above, outlining specific examples, data, and strategies for minimizing the impact of dilution, is published in the October issue of Technology Transfer Tactics. For subscription information, CLICK HERE

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UConn and UNC-Chapel Hill researchers aim to commercialize nanoparticle drug delivery system to improve cancer treatment


By Jesse Schwartz
Published: November 13th, 2019

A start-up led by researchers at the University of Connecticut (UConn) and the University of North Carolina (UNC) at Chapel Hill aims to commercialize nanotechnologies that could lead to major advances in cancer therapy. continue reading »

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Drafting and Negotiating SaaS Agreements: Best Practices for University Tech Transfer Offices


By Jesse Schwartz
Published: November 13th, 2019

“Software as a Service” (SaaS) agreements are often confused with software licenses, but the two couldn’t be more different. So, if you are using a boilerplate license agreement for your SaaS innovations, stop immediately!

The misconception lies in the term “software.” For instance, a license agreement grants the licensee the right to use and house the software in-house, whereas the SaaS agreement is granting the user access to the software. This distinction raises a host of other issues that need to be addressed in the agreement in order to protect data, comply with regulatory issues, and ultimately protect your IP. That’s why Tech Transfer Central’s Distance Learning Division has scheduled this critically important webinar: Drafting and Negotiating SaaS Agreements: Best Practices for University Tech Transfer Offices, scheduled for December 10, featuring Silicon Valley attorney and tech licensing expert Kristie D. Prinz of Prinz Law Office. Join us as Ms. Prinz takes a deep dive into best practices for drafting and negotiating SaaS agreements.

For complete program details and to register, CLICK HERE.

Also coming soon:

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U of Hawai’i revamps its nationally recognized start-up accelerator


By Jason Norris
Published: November 13th, 2019

The University of Hawai’i (UH) has announced it will internally house its nationally recognized start-up accelerator, re-naming it the UH Ventures Accelerator.

Managed by the Pacific Asian Center for Entrepreneurship (PACE) at UH Mānoa’s Shidler College of Business, the UH Ventures Accelerator will be open to start-up founders among faculty, staff, students and alumni of the university.

It will also draw from PACE’s entrepreneurial programs such as the UH Breakthrough Innovation Challenge and the UH Venture Competition, as well as other similar programs across the university’s 10 campuses.

“The name change to UH Ventures Accelerator reflects our desire to continually improve and expand our innovation ecosystem,” says Steve Auerbach, interim director of the UH Office of Innovation and Commercialization/Office of Technology Transfer. “By bringing our accelerator in-house, we now have PACE’s proven expertise and track record combined with their understanding and familiarity of UH that can take us to the next level in commercialization.”

The UH Ventures Accelerator will run two cohorts in the spring and fall each year. Participants will receive extensive mentoring, education and networking to help them launch into the marketplace. They will also be eligible for equity investment from UH Ventures.

Peter Rowan, executive director of PACE and director of the new accelerator, comments, “UH is now positioned to offer a complete suite of innovation and entrepreneurial programs from start to finish for our innovators and future entrepreneurs.”

Source: University of Hawaiʻi News

With the Ultimate University Incubator and Accelerator Package, you’ll get 3 reports detailing the best practices and benchmarks from incubators and accelerators worldwide. CLICK HERE for details, plus a $100-off savings!

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Air Force Lab licenses door barricade to protect against active shooters


By Jesse Schwartz
Published: November 13th, 2019

The Air Force Research Laboratory (AFRL) has licensed out a safe, sturdy door barricade that is portable and quick to deploy. continue reading »

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