Start Ups – Creation And Issues

50 %
50 %
Information about Start Ups – Creation And Issues
Business & Mgmt

Published on July 8, 2009

Author: marcelm

Source: slideshare.net

Description

Presentation on issues related to a spin-off company formation. Given as part of an ASEAN-USPTO Program on Technology Transfer in Bangkok, Thailand, July 3, 2009.

XX

 Company separate from founding organization  Some major companies like Palm and Lucent were originally ‘spin offs’

 Becoming a metric in and of itself  Demonstration of new enterprise formation  Licenses can create jobs too  Tendency is to use a spin-off locally in preference to a license externally

 Need to put a business on a business footing  By sheltering within parent organization sometimes don’t cut apron strings  Finances become confused  Personnel commitments can be conflicted  Generating tax incentives and attracting other money

 Loss of tax status  Core competency  Market valuation problems

 Can’t be a one time licensing play › May be tax reasons to incorporate these externally › Not officially a spin off  Needs to be able to sustain itself › Platform technology is best › Platform allows future growth › Definition of platform may be debated › Pros and cons?

 Technology › This is the easy one  A Plan › Who will do this?  Money › Sometimes surprisingly, this is the second easy one  People › Toughest one › What do you do when Chief scientist wants to run a company?

 Technology › Decision to assign or license? › Assignment not possible if initiating organization either won’t or can’t › Won’t: matter of policy › Can’t: IP constitutes needed background for other IP being practiced

 Will amount be paid in cash, shares or combination?  Assignment likely to be an equity interest  License likely to be cash › Can be deferred as needed

 Becoming a very important component  How is it funded?  Sometimes this is what generates the Money and the People  Consider engaging a professional

 Business plan identifies cash needs  How do you raise money?  Smaller amounts may be self-financed in may cases  Larger amounts may require access to outside money

 Friends and Family › Amounts ~ <$250K  Angel Investors › ~ $100K to $5M  Venture Capital › ~ $1M to $25M  Public markets › > $10M

 How much will the money cost in terms of equity? › Who is providing the money? › What is value of other components?  What is plan for future money? › IPO usually doesn’t happen until 2 or 3 private financings › Each tier is called a ‘tranche’

 Technology is worth?  Cash in is $1M  On paper company is worth: › Technology ($0) + Cash ($1M)  What percentage of company should person with the cash get?

 What skills do you need?  What power will the people have?  Cost of people › More gray hair the higher the price › Compensation will be combination of cash, stock and options

 You will have at least 2 different types of people and generally 3 or more › Organization originating technology › Researcher › Where the money comes from › The people › Professional advisers

 Peace isn’t possible; settle for an operating agreement  What are key points? › Shareholders; Directors and Officers › What will company do? › Employees › Death; disability; unwillingness to act

 Deadlock breaking  Buy/sell; shotgun; puts & calls  Family breakdown  Non-dilution; coattails  Non-competes and confidentiality

Marcel D. Mongeon +1 (905) 390 1818 marcel@mongeonconsulting.com

Add a comment

Related presentations

Canvas Prints at Affordable Prices make you smile.Visit http://www.shopcanvasprint...

30 Días en Bici en Gijón organiza un recorrido por los comercios históricos de la ...

Con el fin de conocer mejor el rol que juega internet en el proceso de compra en E...

With three established projects across the country and seven more in the pipeline,...

Retailing is not a rocket science, neither it's walk-in-the-park. In this presenta...

What is research??

What is research??

April 2, 2014

Explanatory definitions of research in depth...

Related pages

Start-Up Business Problems | Chron.com

Start-Up Business Problems by Kristie Lorette, ... A start-up business owner needs to be optimistic, but often is too optimistic about seeing profits.
Read more

Guidelines regarding rollover as business start-ups

... in order to cover new business start-up costs ... A valuation-related prohibited transaction issue may arise where the start-up ... creations. 15 ...
Read more

Fed @ Issue and Financing Start-ups, Job Creation,

Free subscriptions and additional copies are available upon request to Public Affairs Department Federal Reserve Bank of Atlanta 1000 Peachtree Street, N.E.
Read more

Tax Analysts -- Start-Ups, Not Small Businesses, Are Key ...

... 2011, op-ed in The New York Times, Jared Bernstein neatly laid ... will be a hotly debated issue in Congress ... job creation. Start-ups, ...
Read more

Troubleshooting the Startup Process

Troubleshooting the Startup Process. ... Resolving startup issues requires a clear understanding of the startup process and core operating ...
Read more

Troubleshoot Startup Problems with Startup Repair Tool in ...

Troubleshoot Startup Problems with Startup Repair Tool in Windows 7 & Vista. ABOUT; CONTACT; ... It can fix issues like missing or damaged system files.
Read more

Startups.Co.Uk - Startups | Small business advice ...

Startups.co.uk: Starting a business ... Legal issues & red ... Founders Pledge has partnered with accelerator MassChallenge to make more start-ups aware of ...
Read more

Business incubator - Wikipedia, the free encyclopedia

A business incubator in business speak is a company that ... prototype creation and other services ... Startup studio; Virtual business incubator; ...
Read more