Funding & Patents. Enterprise & Project Management

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Osborne Heath
5 years ago
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1 Funding & Patents Enterprise & Project Management Please note that these slides are not intended as a substitute to reading the recommended text for this course. 0

2 Companies that received VC funding 1

3 Match Finance to Business Stage R&D Start-up Early Founders Growth Fast Growth Sustain Growth Maturity Business Angels Venture Capital Public Sector Debt Corporate Venturing Public Listing/IPO Private Equity

4 Where can SMEs tap into finance? Banks - SME-orientated funding schemes National Pension Reserve Fund Irish Strategic Investment Fund Private equity funds ISEQ Crowdfunding PE Govt Bank

5 4 Advantages of dealing with the banks No Equity Cheaper than alternative sources of funds Can be used as part of a package Development of a partnership

6 5 Disadvantages of dealing with the Banks Restrictions on receipt of funds "Slow no" Risk adverse nature of banking Inflexible

7 Private equity providers active in Ireland SME orientated BlueBay Carlyle Cardinal Capital Highland Capital Partners Broadlake Capital MML Growth Capital Greencoat Capital Proventus Capital Partners

8 Microfinance Ireland approves 5.4m in loans Microfinance Ireland has said 930 jobs were supported in small companies last year (2015), after it approved 5.4m worth of loans. A total of 357 small companies were supported, out of 752 loan applications. Microfinance Ireland offers unsecured business loans of between 2,000 and 25,000 to companies with fewer than 10 employees and with a turnover of less than 2m.

9 Lily O' Brien's First deal for Carlyle Cardinal c. 15 million Management likely to remain Revenues rose 40% in 2012 Exports to 16 countries, inc UK, US and Aus. Strong online presence Operating profit of 1.5m in 2012 Increase from 285k in 2011.

10 What are Private Equity looking for? Businesses with capacity to grow A deleveraging, acquisition, growth capital or shareholder reorganisation opportunity Strong management Good MIS and strong cash flows Value creation opportunities

11 Venture capital funds Atlantic Bridge BOI Seed and Early Stage Fund AIB Seed Capital Fund Enterprise Ireland Investec Delta Seroba Kernel

12 Dealing with PE/VC Advantages Assist with Involved in setting business strategy / direction Flexible and alternative form of finance / capital structures mezzanine, junior loans Increases refinance, acquisition or cash extraction capability Incentive structures for management teams Possible solution to succession issues Access to new markets or expertise

13 Deal with PE/VC Disadvantages Owners giving up equity New board directors / greater corporate governance More financial information requirements Exit timeline Due Diligence requirements

14 Financing types focus on VC/growth Typical financing pattern of an innovation-based company Growth Capital Venture Capital Debt Private Equity IPO M&A Project Financing Grants/ Awards Angel Funding 13

15 What is a Patent? A right to exclude others from: making, using, offering for sale, selling or importing the patented invention Not a right to use the invention Quid Pro Quo: sufficient disclosure 14

16 What is a Patent? A legal protection which gives an inventor the right to exclude others from performing certain activity in the country of issuance Sanctioned monopoly for a set number of years in exchange for disclosure to the public Does not give the inventor the right to make, use or sell the patented invention 15

17 Patents 16

18 17 Apple 04/02/16: Apple ordered to pay $625 million in FaceTime patent lawsuit 16/10/15: Apple Ordered to Pay $234 Million in Patent Lawsuit to University of Wisconsin alleged some iphones, ipads used its technology in processors

19 18 A Common Misperception... Patents inhibit free exchange of information. The patent laws require DISCLOSURE of the structure of the invention, how to make and use it and the best mode of the invention Patent applications are typically PUBLISHED 18 months after filing and in any event upon issue.

20 What Can Be Patented Process or Method Machine or Apparatus Article of Manufacture Composition of Matter Chemical Compounds Physical Mixtures Improvements of Any of the Above 19

21 20 Why Patent an Invention? Source of recognition for the inventor(s) Incentive to develop a commercial product License to an existing company Start up a new company Protection against imitators

22 21 What Can Be Patented? Must be: Novel: not previously known or used by others Useful: have a known use or produce a concrete and tangible result Non-obvious: Is it obvious to PHOSITA (Person Having Ordinary Skill In The Art)? Can not be found in a single or reasonable combination of patents that would yield a predictable result Can not be: Idea Law of Nature Scientific Principle

23 22 IP in Summary Law Covers Registration Duration Patent Technical Yes 20 years Utility Model Technical Yes 10 years Design Look Yes/No 5 x 5 years Trademark Brand name of product or service Yes/No 10 years x for ever Copyright Artistic and literary works/software No life + 70 years thereafter

24 What cannot be patented? Computer programmes Medical and surgical treatments Mathematical methods Business methods Discoveries Aesthetic creations New species of plant or animal Inventions which are contrary to moral standards and public order (e.g. instruments of torture) The human body and any non-separate part/s thereof 23

Contents. 1 Introduction... 1

Contents. 1 Introduction... 1 Contents 1 Introduction... 1 Part I Startup Funding Sources, Stages of the Life Cycle of a Business, and the Corresponding Intellectual Property Strategies for Each Stage 2 Sources of Company Funding...