Entrepreneurial excellence was the focus of Technology Innovation Forum VI and Matthew Norden, who co-founded market analyst Lux Research and is now vice-president at venture capital (VC) firm Venrock, began the session by spelling out the formula that VCs use to evaluate start-ups -
technology + market + team
Everything has to add up, but even then it might not be enough. Winning VC funding is tough if you’re pitching against firms that require much less investment and offer quicker returns, such as internet start-ups.
For this reason, early-stage companies working with advanced materials are more likely to go through specialist funds, or use corporate backers to raise capital. Another way to develop the business is to form strategic partnerships.
And it’s here that James Ashman of SouthWest Nanotechnologies (SWeNT) – a spin-out from the University of Oklahoma, which has developed manufacturing processes for carbon nanotubes – took up the discussion.
Driving growth through partnerships
SWeNT has benefited three times from this approach. Its first partner put new applications on the table, a second alliance opened up distribution and provided new sales channels, and then the firm’s latest collaboration is helping to expand operations by bringing in a production partner to generate material (in this case a plastic/multiwalled-carbon-nanotube composite) in volumes that would have otherwise required a huge investment in scale-up infrastructure.
“Strategic partnerships are a much more fertile area than institutional investors for the materials sector, but it takes time so plan ahead and start negotiations early,” Ashman told the audience, adding that for SWeNT its partnerships had each taken 6-12 months to set up.
Protecting your ideas
After lunch the discussion switched to patents and Chinh Pham of law firm Greenberg Traurig had some useful information for developers.
Pham works regularly with the Harvard innovation lab and made the point that patents can be expensive ($10,000 – $15,000, or even up to $20,000 in some cases). The costs can soon add up, so you need to have a strategy.
“Don’t just file away, file early and around you core technology,” he advised.
Further reading on TMR+
MRS Fall 2013 highlights – part five (final)
MRS Fall 2013 highlights – part four
MRS Fall 2013 highlights – part two
MRS Fall 2013 highlights – part one