You’re interested in commercializing your discovery, but aren’t sure what to expect or where to start. KUIC is available to talk you through the steps. In the meantime, here’s a general overview to get you going with the planning process.
STEP 1: FORM THE COMPANY
Once you’ve decided to go for it, generally the first step is to legally form a company. There are several different business structures, each with its pros and cons.
Sole Proprietorship: A sole proprietorship is the most basic type of business to establish. You alone own the company and are responsible for its assets and liabilities.
Limited Liability Company (LLC): An LLC is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.
Limited Liability Partnership (LLP): A partnership in which all partners (depending on the jurisdiction) have limited liabilities, one partner is not responsible or liable for another partner’s misconduct or negligence.
Non-profit 501(c): A tax-exempt nonprofit organization in the United States.
C-corporation: Refers to any corporation that is taxed separately from its owners.
S-corporation: An S corporation is similar to a C corporation but the corporation's income or losses are divided among and passed through to its shareholders. They must then report the income or loss on their individual income tax returns.
STEP 2: ADD PEOPLE
A great idea needs people to make it successful. You don’t have to hire full-time staff, which most startups can’t afford, but you will need help. Identify key team members – ideally whose skills and experience complement yours – and the roles they will play in moving your discovery along.
These people can be any of the following:
- Scientific advisers
- Research collaborators
- Business partners
Faculty considering commercialization often ask, “Would I have to leave my job at KU?” The answer is no. Although both KU and another company can’t simultaneously employ you, you can have a non-employee role at the company as a collaborative researcher, board director, shareholder, and/or consultant. Some faculty even take a sabbatical to dedicate themselves to the start-up for a few months while it gets off the ground.
STEP 3: THROW IN IDEAS
You have a company and people, now you need something to sell – likely one of your discoveries made in your role at KU. So the next step will be to get a license from KU that gives your company the rights to commercialize the intellectual property (IP) around that discovery.
STEP 4: WRITE A PLAN
What is the company’s ultimate destination and how will it get there? These are the questions you will answer in a business plan. The value of a business plan isn’t so much in its mere existence as it is in the process of writing it. Expect a well-written business plan to take weeks or months to complete.
The process will involve researching the market, articulating the value proposition of the product, interviewing prospective customers and partners, talking to thought leaders in the field, putting together budgets and timelines, and identifying the main risks along with strategies for mitigating those risks.
You will need to submit your commercialization strategy to KUIC. The NewVenture Creation business strategy slide deck template (MS Powerpoint) can be downloaded to help simplify this step.
STEP 5: MOVE IT ALONG
You have a vehicle (the company), traveling companions (the people), a purpose (the ideas), and a roadmap (the business plan) – you’re ready for your road trip!
Oh wait, now you need to put some gas in the tank. As they say, money makes the world go around and start-ups are no exception.
Funding: Passion Doesn’t Keep the Lights On
It has been said that investors invest in people, not ideas. While that’s true, the second part of the sentence is often forgotten. Investors invest in people…with plans.
Whether you’re looking for angel investors, venture capital, or traditional loans, we can show you how to present your business plan – capital requirements, cash flow projections and market potential.
Seasoned investors aren’t gamblers; they like to back companies with a plan. We can work with you to help present your business in the best possible light.
Traditionally this has meant using personal funds, credit cards and contributions from friends and family. While this route can help an entrepreneur retain his or her equity, often these funds run out as businesses are undercapitalized.
These early investors are often not just a great source of funding, but also of mentorship as they tend to have deep expertise in certain areas. It’s a benefit to both the investor and entrepreneur when this ‘smart money’ is involved.
When a new venture needs more than a couple of million dollars, venture capitalists are often the best source. While VC firms generally require considerable equity, their expertise and deep pockets can bring the necessary momentum for many companies to make it to the next level.
Funds are available from either government (federal or state) grants and/or foundations. Government entities want jobs and foundations eagerly invest in ventures whose outcomes can positively impact their missions.
STEP 6: LASTLY
You’ll know you’re well on your way to your destination when your company is landing customers, getting regulatory approvals, obtaining partnerships with major industry players, and/or focusing less on research & development and more on sales & marketing.
Although KUIC can’t guarantee your success, we can give you the best possible shot at it.