Presentation at NRI-Conference 2014, Day 2
Ways to finance innovators'
relieve of present duties in the
clinic
Dag Finne
Senior Business Developer
Bergen Teknologioverføring AS
www.bergento.no
Agenda
Introduction
CV BTO
Case
Different interests and difficulties
Solution
BTO and the model envisaged
Elements of the solution
Agreements and associated duties
Conclusions
Compatibility with the expectations
Bergen Teknologioverføring (BTO)
Technology transfer office (TTO) that supports 8 research institutions in commercialising research results and
handling all intellectual property aspects.
Owned by the University of Bergen, Haukeland University Hospital and the Institute of Marine Research
CV
Engineer Marine Tech, Master in Management at NTNU, BI Styrekompetanse
Established 8 startups
Experience as CEO, Chairman and Board Member in software companies
Experience from ICT industry since 1993 in development and sales
Joined BTO in April 2006 as the Senior Business Developer
Focus on ICT projects and early stage funding
Responsible for 5 startups
Dag Finne
3
Case; Ways to finance innovators' relieve of present duties in the clinic
Innovators
Wish to continue as academic employees
Want a 50-50 position (can be any)
Department
Positive, but afraid of being depleted
Different interests have to be
accounted for
Start-up
Needs the innovators for 12-24 months more
(based on needs, can be any)
Has limited cash
Be aware of the limits of soft funding (ESA)
4
Development Friends,
Grants
Family,
Founders
Research
Grants
Net positive CF
Funding
5-50k
Angel
Investors
Early
Stage VC
VC
PE, Project IPO, M&A
Financing
50k-500k
500k-2M
2M-50M
2M-50M
25M+
Basic
Research
Net negative CF
‘Valley of death’
Stage of
Venture
Development
Engineering
Prototypes
Applied
Research
Production
Prototypes
Distribution Product
Introduction
Contracts
Proof of
Concept
Target
Market
Working
Prototypes
Business
Plan
Founding
Team
Supplier
Contracts
Source: Adopted from UCDAVIS Center for Entrepreneurship
Revenue
Growth
5
Problem formulated
How to facilitate research based innovation and optimize growth of start-ups without
compromising obligations of clinical duties
How to avoid infringement of ESA’s rules restricting public subsidies to private entities
These are apparently conflicting obligations set by national legislation and EU
regulations (soft funding limited to 200,000 EUR)
6
Extra Funding
Solution
Payment
University
Hospital
Agreement 2
Utilization of
personnel
University
Hospital
Department
Framework agreement
Agreement 1
Payment
BTO
Utilization of
personnel
Invoice
Funding
Payment
Agreements
Accounts Receivable
Related parties
Buy-out agreement
Start-up
7
Accounts Receivable
Payment
Extra Funding
University
Hospital
Agreement 2
Utilization of
personnel
University
Hospital
Department
Framework agreement
Agreement 1
Utilization of
personnel
Invoice
Payment
BTO
Buy-out agreement
Start-up
8
Framework agreement
The university hospital in Bergen acknowledges the obligation
of and a wish to promote research based innovation at the
hospital to the benefit of society and the inventors.
The hospital has committed to lay down guidelines to allow
innovators to dedicate time to work at their innovation project
(the start-up).
The hospital will allocate an additional budget for the purpose
of co-funding innovation generated by the hospital employees,
in accordance with underlying agreements.
University
Hospital
Framework agreement
BTO
9
Accounts Receivable
Payment
Extra Funding
University
Hospital
Agreement 2
Utilization of
personnel
University
Hospital
Department
Framework agreement
Agreement 1
Utilization of
personnel
Invoice
Payment
BTO
Buy-out agreement
Start-up
10
Agreement - utilization of personnel
University
Hospital
Agreement 2
Utilization of
personnel
University
Hospital
Department
This agreement is subject to the Framework agreement.
BTO will make a draft and present this to the university hospital and
the department for signature.
Sets terms and conditions for allocating innovators (medical
doctors) to perform work task to further develop their start-up.
Each innovator will be able to spend up to 50 % of their regular
work hours at the university hospital department.
Agreement 1
BTO
Utilization of
personnel
11
Agreement - utilization of personnel, cont’
The department shall maintain responsibility for payment of salary,
social costs, insurance and other duties of the employer.
The department will be granted funding from the hospital in order to
cover additional costs, such as employment of subsidiary personnel
for a limited time period.
BTO is responsible for managing this arrangement on behalf of the
hospital.
12
Accounts Receivable
Payment
Extra Funding
University
Hospital
Agreement 2
Utilization of
personnel
University
Hospital
Department
Framework agreement
Agreement 1
Utilization of
personnel
Invoice
Payment
BTO
Buy-out agreement
Start-up
13
Buy-out agreement
Governed by the framework agreement and reflect the terms
and conditions as agreed by the arrangement of drafting of
personnel.
BTO shall invoice the start-up an amount equal to regular
salary for the innovators/doctors plus associated interest.
BTO
Buy-out agreement
The start-up will be responsible for payment of the total invoice
as well as the value added in accordance with regulations.
Start-up
The accounts receivable from the start-up shall be handled by
BTO on behalf of the university hospital.
The hospital will take the risk of non-refundable costs. In case of
non-repayment, the costs will be converted to shares or, in case
of bankruptcy, written-off.
14
Conclusions
The medical doctors/innovators will be able to stay in their positions and at the
same time perform R&D activities to benefit the start-up
The hospital department will not suffer financially by these agreements
The start-up keeps competent personnel to enable growth
The ESA terms of minor financial support are met
No financial benefits or risks are claimed by the tech transfer office from those
agreements – role of facilitator. Return is based on the exit/selling shares of the
start-up
15
Thank you for your attention
Q&A
Dag.Finne@bergento.no