The executive summary is a brief, concise overview of the key points appearing in each section of the plan. Many times this is the only section a potential investor, lender, future employee, or strategic partner will read. The length of the letter should be no more then one-and-a-half to two pages.
Recipient's Name Recipient's Title Recipient's Street Address Recipient's City, State and Post Code Dear Interested Party Description of Technology :
What is the technology in? What is the current stage of the development for the technology? In paragraph one of the executive summary, describe how the technology will be sold ( retail, wholesale, manufacturing or service ). Identity the current stage of the development for the technology ( concept stage, prototype stage, small production runs, full manufacturing production).
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Proprietary Aspects :
What is unique about the technology, and what proprietary rights does the technology have? In paragraph two of the executive summary, emphasize what is unique. Define the technology in terms of the problem it will solve or the need it will meet. Summaries any proprietary rights the business might have ( patents, copyrights, royalties, distribution rights, etc)
Intellectual Property Issues
What is the most appropriate way to commercialize the technology? Licensing, Strategic alliance, Joint venture, New startup?
The Market :
What is the market like in terms of the industry, the competition, the target market, customer needs technology benefits and market penetration? In paragraph three of the executive summary, briefly define the customers, identify various target markets, and how the technology can satisfy their needs. Explain the way the technology will be sold to the customers and what kind of distribution channels will be used.
Amount of Financing :
How much money does the technology need? In paragraph four of the executive summary identify how much money will be required to bring
the technology to market.
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Type of Financing :
What kind of financing will the venture need? In paragraph five of the executive summary identify the types of financing needed in terms of dept or equity.
Five year Outlook:
Your Name Your Title
What are the goals of the business that is developed around the technology? List the goals for the next five years in bullet form. Explain how the new technology will help your venture reach these goals.
Purpose of the Technology 1. What is the purpose of the technology?
Describe what the technology does, what problem it solves and how products based on it could be used.
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Unique Features 2A. What are the unique features of the technology?
Describe all the features of the technology, clearly identifying those that are not currently found in existing products. Describe how these unique features benefit the customer.
Unique Features 2B. How does the technology address a significant problem in the marketplace?
What problem does the technology solve for potential customers? Why is it a better solution than other existing solutions?
Unique Features 2C. is this an incremental or a revolutionary technology?
Would the technology be commercialized as an addition to an existing product, or would a completely new product be developed?
State of Development 3. What is the stage of development for the technology?
Concept stage? Prototype Stage? Small production runs? Full manufacturing production?
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Future Research and Development 4. What future development is required to get this technology to the commercialization stage?
What additional time, funding, facilities, personnel will be needed? Does this need to be outsourced?
Commercializing the Technology 5. What is the most appropriate way to commercialize the technology?
Licensing? Strategic alliance? Joint venture? New startup?
Government Approval 6. What government approvals are necessary and
what is the status of such approvals?
Limitations 7. What are the technological limitations of the technology?
List key elements that are missing. Is there a there a threat of technological obscurity?
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Liabilities 8. What liabilities may be associated with the technology?
Is there the potential for intellectual property
infringement/litigation? Other kinds of litigation? Product or customer legal liabilities?
Related Services 9. What services related to the technology could be offered?
Customer support for software? Consulting services?
Spin-offs 10. What spin-off technologies could be developed?
What other products enhancements could be developed?
Development Needs 11. What further development needs to be performed prior to showing the technology to potential licensees?
How close is the technology to a sellable product? How long will it take?
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Manufacturing 12. How will the technology be manufactured?
Who will manufactured the technology? (in house? Outsourced? Incubated?) Who will supply raw materials? (Primary sources? Secondary sources?) What are the manufacturing requirements? (Describe the manufacturing process)
Environmental Considerations 13. What environmental considerations are associated with the technology?
Does the manufacturing process pose any toxicity problems? How can these be dealt with?
Intellectual Property Evaluation 1. How to original is this technology?
Explain the current "state of the art". Start by discussing the products and technologies currently available that are similar or are under consideration. Perform an initial patent search yourself. Perform other literature searches, i.e. scientific journals, magazines, business journal, etc. Ideally you should have an attorney conduct the search. Summaries the patent and literature search result here. CLEARLY explain the differences between your technology and any you have found in patents or in the literature. This should give you the confidences to proceed in the knowledge that your technology could be protected.
The intellectual property evaluation encourages the reader to think clearly about the technical characteristics of the invention ?C especially with respect to "prior art" i.e products and inventions that are similar to the one under consideration.
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Patents 2A. Is patent protection warranted?
Is this patentable technology? Explain how it is novel, has utility, and is non-obvious to somebody practiced in the art.
2B. What is the prior art surrounding the technology?
What existing patents and/ or product and/ or published articles are similar in nature?
2C. Has the technology been disclosed publicly?
Has the work bee published either in article, abstract, presentation or poster form? Has a product been sold which embodies the technology? Supply all dates of any public disclosures or sales.
Copyrights 3A. Is copyright registration warranted?
Is this a copyrightable technology or could one be developed? Is it a work of authorship in a fixed format such as a book, computer code, a mathematical equation, etc?
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3B. If the technology is computer code, will the source code or the object code be commercialized?
Note : Object code licenses have more support issues associates with them than source code licenses. What are the support issues associated with commercializing this technology?
3C. What is the likelihood of litigation?
Could the technology be easily copied or replicated? If litigation could take place, state the potential for possible lawsuits.
Trademarks 4A. Is trademark registration warranted?
Does the technology have an associated trade name or could one be developed? What is the name? Why was the name chosen? Has it been trademark protected?
4B. Is trademark registration warranted?
Has a trademark search been conducted? If not, when will this occur?
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Governmental Approvals 5. What governmental approvals are necessary for the venture?
Identify the governmental agencies the regulated businesses in the industry. List the necessary governmental approvals required at the federal, state, and local levels. Some governmental regulatory in the USA are the FDA, EPA, FCC, USDA, IRS, Secretary of State, State
Department of Revenue and Taxation, Workers' compensation Div, health department, and planning and zoning commissions.
Trade Secrets 6. Is the technology based on trade secrets or know-how?
Note : if the technology is not protectable under patent, trademark or copyrights law, it could be protected as a "trade secret" or "know-how". What procedures are in place to protect the trade secret or know-how?
Intellectual Property Rights: Barriers to Reengineering 7. What are the barriers to reengineering for this technology?
How difficult and how long would it be for a competitor to" work around" the technology to get the same result but without infringing intellectual property rights?
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Intellectual Property Rights : Ownership 9. Who has ownership of the intellectual property?
Have other technologies been used to develop or been incorporated into the new technology? Ownership of the technology should be clearly established and documented. Does an employee, research student or subcontractor claim part ownership, or does an organization that provided a grant?
Management Team Analysis
Inventor 1. What is the contribution of the inventor?
Title, experience, talents, money, years of experience in this type of business. Include resume in Appendix.
Management Team 2. Who are the key management personnel, and what are their job description and prior experiences?
Include their successful track records, prior experiences or training relevant to success with venture and the technology. Resumes should be placed in the Appendix.
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Compensation 3. What is the compensation package for the inventor and the management team?
List in chart from salary, benefits, and bonuses.
Ownership 4. What is the ownership, including any stock options that are owned by the inventor and management team?
List in chart form. Describe the ownership of the technology. Will it be owned by a corporation (C,S or LLC), joint venture or strategic alliance.
Contracts And Agreements 5. What are the company's management-team work contracts, non- compete agreements, franchise or other contractual agreement?
Briefly describe the above contracts. Place copies of the contracts in the Appendix.
Inside Advisors 6. Who will serve on the board of directors or advisory council, including their names and titles, their potential contribution, salary and any ownership in the company.?
Highlights their qualifications and expertise that relate to the technology. List in chart form.
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Outside Advisors 7. Who are the key outside advisors, such as accountants, lawyers or consultants, and how they will be paid?
Include in chart form the advisor's name, address, phone number and any compensation (salary, stock, warrants, etc) along with a brief description of his or her expertise.
Buy Sell Agreements 8. If you have a buy-sell agreement, who will be insured in terms of life-insurances policies on key personnel for which the company is the beneficiary?
List insurance-company name, contact person, kind insurance and premium cost. Do not include other types of insurances such as fire, theft, etc.
Incentive Plans 9. What employee stock option or other incentive plans will be in effect?
Briefly describe incentive plans and place finalized document in the Appendix.
Organization Chart 10. How will the company be organized?
Prepare an organizational chart of the management structure. If the person has not been hired, list the job title.
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Current market size 1. What is the current size of the industry for the technology at the national, regional, state, and local levels?
Indicate the amount of dollars spent annually by customers and/or unit consumed. Cite the sources of information so readers believe the statements and projections.
Growth Potential 2. What is the growth potential of the market?
Tell whether the industry is expanding, stable, or declining?
Industry Trends 3. What industry trend do you predict will affect the technology?
What has been the recent history in this industry for this kind of technology? Are there any noticeable trends? Does this industry readily accept new technologies? What have been the effects of these technologies on the industry?
Competition Profile 4. Who are the competitors in this industry?
List competitors and prepare a competitive analysis chart. Note: some companies could be potential licensees; it is critical to understand their current product offerings.
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Competition Advantage 5. What competitive advantage would be offered by this technology?
First to market? Low cost? Differentiated product?
Barriers To Entry 6. What are the barriers to entry in this industry?
What has been the history of treatment of new enterprise and new technologies?
Customer Profile 7. What is the profile of the intended customer for this technology?
Is it a company or an end-user? What is the demographic profile of the end-user in term of age, sex, profession, income, location, etc?
Customer Reactions/Benefits 8. What is has been the reaction to this technology from colleagues, peers, conference delegates, readers of published articles, company representatives?
Include testimonials, focus group results, articles, etc.
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Target Market Profile 9. What are the target markets for the technology?
Priorities and list each target market and its size (in dollars)
Marketing Cost 10. For each target market identified, what is the cost of market penetration?
(In dollars) Put in chart form and include a timeline.
Market Penetration 11. How will the technology be sold?
Illustrated how the technology will be sold to the public, such as through distributors, sales reps, direct sales force, telemarketing, advertising, promotion, packaging, catalogs, customer service, warranties, or trade shows. What is the cost to access? What connections do you have?
Pricing Profile 12. What is the pricing structure in this industry?
Retail price, discount offered, etc.
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Cost of Start-Up 1. How much money has been spent to date on getting the technology to its present state?
Materials, worker-hours, contracting, consulting fees, lawyer fees, travel expense etc. Note: these are SUNK COST and may not have an impact on the market value of the technology. Knowing the historical cost is (1) a good indication of the cost associated with getting the technology
to a marketable stage (2) important to communicate to
investors/licenses who want to know what the inventor has put into the deal.
Cost Of Development 2. How much will it cost to get the technology to a working prototype?
List the task and cost associated with the development work required for a prototype.
Cost Of Intellectual Property 3. What will it cost to protect the intellectual property surrounding this technology?
Get estimates from intellectual property solicitors for the protection of the patents, copyrights, trademark, trade secrets and how identified in the intellectual property evaluation.
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Cost of Government Approval 4. What are the costs associates with obtaining regulatory approval?
List all of the milestone, timeline and the estimated costs of achieving these milestone.
Pricing Strategy 5. If the technology will be sold as product in its own right, how much will it retail for?
What are the direct cost associated with the technology and what will customer pay? Explain your pricing strategy.
Financial Value 6. If the technology can become part of an existing, what is the financial value added by the technology? What percentage of the new combined product comprises the new technology?
What is the retail price of the existing product? What are the direct cost associated with the existing product? What would be the retail price of the new combined product? What are the direct costs associates with the new, combined product?
Operating Expenses 7. What indirect costs are associated with getting this technology to market?
List operating expenses.
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Capital Requirements 8. What additional capital requirements will be necessary to get this technology to market?
Would new plant and equipment be required? Could the technology be manufactured on existing equipment?
Sales Estimate 9. What kind of customer adoption curve do you predict for this technology?
What will be the number of unit sold in year one, two, three etc?
Industry standards: Sales 10. What are the comparable license deals that have occurred in this industry?
What kind of royalty rates have been paid? What up front payment
have been made? What milestone payments have been negotiated?
Risk Analysis 1. What are the potential problem , risks and other possible negative factors that the technology might face? Design innovative approaches to solve these problem if sales projections prove wrong or unfavorable industry development occurs; Manufacturing and/or engineering cost become too high; Competition destroy your marketplace position ( a price war ensues or computer reengineering takes place); Page 19 of 23
Needed labor is unavailable; Supply deficiencies develop; Needed capital is unavailable; Licensing opportunities don't materialize; Government interference arises; Government and regulatory approvals cannot be obtained; Product liability occurs; Litigation arises because of intellectual property infringement; Problem with key management of staff members; Product development and commercialization takes longer than anticipated; Union problems arise; and Other risk issues (list and explain)
Needed Capital 1. How can the needed capital for launching the technology be obtained?
Calculate the amount of capital needed for launching the technology and explain how it will be obtained. List how much money the inventor(s) will invest, how much investment capital will be raised, and hoe much, in loans, will be required to launch the venture.
Investor's Role 2. What role will you play in launching the technology?
Define the role the inventor will play in the technology launch; ownership only ownership and manager other.
License Potential 3. Should the technology be licensed or royalty rights be given to another company?
If yes, why, and who is a potential licensee? Explain your decision by listing the reason why. Describe who might be a potential licensee.
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Corporate Partners 4. Are the potential corporate partners or joint venture opportunities?
List names, addresses and explain why they might be interested.
Proprietary Rights 5. Do you have any proprietary rights that could be sold to other parties?
Indicate who and estimate the amount of each sale. Include any distribution rights, patents, trademark, trade secrets, franchises.
Infrastructure Members 6. What infrastructure members have been identified to help launch the technology?
What is the projected cost of their services? List key advisers, including accountants, lawyers, bankers and consultants. Consultants
areas should include risk management, strategic alliances, computer technology, engineering, management, marketing, production and specialists in technology. Estimate the cost of using key advisers and any compensation that should be provided (fees, stock, salary, warrants, other)
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Growth Potential New Offerings To Market 7A. What new technology spin-off, locations, distribution venture, etc. will the initial venture pursue in the future? What new marketplaces will each of the technology spin-offs penetrate?
What will be the projected revenues from the technology spin-offs, locations and distribution centers for the next three to five years? List technologies, locations, distribution centers and marketplaces that will be pursued in the future. Project revenues for three years. Include estimated potential costs. Use chart formats or maps to describe new markets to be penetrated . Describe methods of market
Capital Requirements 7B. What are the financial requirements for pursuing the technology spin-offs, locations and distribution centers? How will you raise the needed capital for future growth?
List the estimated financial requirements for pursuing technology spin-offs, locations, etc. Explain how you will raise the needed capital. Include capital equipment, buildings, inventory, advertising, etc, in your requirements list. Identify whether you will use debt or equity to raise the needed capital for future growth.
Personal Requirements 7C. What management personnel will be needed to support the projected growth?
List the management personnel and other employees needed to support future growth. List job titles, brief job descriptions, salary, and benefits.
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Exit Strategy 7D. How will the growth plan enable the venture to obtain an exit?
Explain, in detail, how the growth plan will enable the venture to obtain an exit. Explain future plans for going public, merging with a public company, selling for cash, etc.
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