OSICP - Overview

Temple University recognizes that efficient and effective means of commercializing University technology may be through small, start-up companies that are founded by, or have a close relationship with, university faculty. The University is enthusiastic about such ventures and wishes to be supportive of faculty and companies formed for the purpose of developing and commercializing University technology.

This section describes the process that faculty entrepreneurs typically follow. To further assist campus entrepreneurs, OSICP has prepared, "A Guide to New Business Ventures at Temple University"

What do startup companies need to succeed?

• First, the technology being commercialized should have certain characteristics. It is best if there is a radical versus an incremental difference between this technology and predecessor technologies. The customer value should be very significant, the technology should be in an early stage of development, and the intellectual property protection should be strong.
• Certain industries are better than others. The industry should have ‘spin-off friendly’ characteristics that are favorable to new companies: a low level of non-technology assets, a young technology base, and segmented markets with many small firms.
• If the industry and technology characteristics are favorable, there are three other major requirements for a successful startup company: world-class technology, experienced management, and cash.
• Faculty developed technology is typically in a very early stage of development and needs further development before it can be commercialized via a start-up. Most University faculty are not experienced in new company start-ups, and do not maintain relationships in the entrepreneurial community or with early-stage company investors. That is where the Office of Strategic Initiatives maintains ongoing knowledge and relationships with sources of early stage capital, venture capital for growth, and proven entrepreneurs who have the capability of successfully forming new companies and taking them to commercial success. We maintain a working knowledge of current terms and conditions in the early-stage capital markets so that the start-up company can obtain the most favorable financing structure and pricing.

IThe Office of Strategic Initiatives and the Office of Technology Transfer actively identifiy University intellectual property and innovations suitable for a start-up company. We will assist in the creation of a start-up only where we believe that there is high potential to create substantial value and where we believe that there is a high probability of obtaining external funding for the company.

During the early phases of a start-up the Office of Strategic Initiatives may retain a board seat, and always acts as a fiduciary on behalf of Temple University.

A start-up idea will be assessed by the Office of Strategic Initiatives staff for market potential and, if it is determined that there is a high potential opportunity, we will help develop a business model and plan, recruit management and create a new, independent company. The Office of Strategic Initiatives seeks to assist in the growth of the business until the occurrence of a liquidity event, typically either an Initial Public Offering or sale of the company to a larger firm. The resources of the Office of Strategic Initiatives are available to the startup company as long as it is actively involved in the commercialization of University technology.

Term Sheet:
Once the Office of Strategic Initiatives management and the research team have agreed that a start¬up company is the .appropriate way to commercialize the University’s intellectual property, the Office of Strategic Initiatives submits a proposed term sheet to the start-up company. The term sheet spells out how the new company will pay the University for the rights to develop the technology that is being licensed. The compensation will typically include a combination of equity and royalties.