The VIC Approach
An abundance of commercially promising but nascent technology is available for licensing from the nation’s universities and federal research laboratories. The US federal government annually sponsors about $120B of research and development. Add to this, the novel innovation created by international research institutions, and the pool of potentially game-changing technologies is enormous.
Much of the technology created from this research ends up stranded because it is not sufficiently developed to attract large company interest. However, many of these technologies have exceptional commercial promise.
The challenge is in assembling all the pieces necessary to harvest the best of these technologies in a manner where the potential reward considerably outweighs the apparent risk involved in developing and commercializing early-stage technologies.
Universities represent a good source of technical talent, and university inventors frequently have an interest in working with start-up companies to commercialize their inventions, especially if the relationship is structured in a manner that allows them to continue in their full-time faculty positions.
The VIC Technology Venture Development business model has been optimized to overcome the limitations of traditional technology transfer approaches and take advantage of the massive base of research conducted by US and international universities and similar organizations.
VIC develops and then drives strategic initiatives and activities within our companies to rapidly create value and significantly increase the probability of success.
For example, when considering whether to license a new technology, VIC’s internal Opportunity Assessment Team:
- Engages in an initial competitive landscape and intellectual property review
- Conducts interviews with potential customers to better understand how the technology will address unmet market needs
- Performs a market analysis to evaluate market structure, size and growth prospects
- Identifies barriers to entry
- Outlines a general commercialization path
Only when all of these initial success criteria are favorable, do we consider licensing a technology into a newly formed company created to develop the specific technology. This type of careful consideration goes into all of our business development activities at all stages of company development. We don’t just support companies; we know what they need to be successful at various stages of development, and we proactively drive those business development processes.
In the early stages of a portfolio company’s development, full-time, executive-level business management may not be practical or affordable. Instead, VIC recruits industry-specific experts to work closely with its executive team in an advisory capacity, and VIC provides its management services on an as-needed basis so that human resources are used efficiently and cost-effectively.
The cost of having a highly experienced team is spread across a number of companies ensuring that cash burn is minimized throughout the portfolio. This model gives our young companies exceptional management teams that would otherwise be unaffordable.
As a given portfolio company matures and products begin to emerge from the research and development phase and progress towards the commercialization phase, industry-specific experienced permanent management is placed full-time in the company.