A Business Strategy for Rapid Development of Multiple Technology Opportunities

The strategy presented here will enable a technology organization to pursue several opportunities concurrently. The basic premise of the strategy is to move the technology development activities outside of the operation of the technology organization and into several new limited liability companies. One company is formed for each significant market opportunity of the technology. [See BodyShock: A Case Study in Technology Transfer] Each development company is operated separately, with its own management and financing. Operations are limited to development of the technology. When development is completed, the technology is either licensed to a third party or back to the technology organization for manufacture and distribution. The technology organization benefits through the receipt of profit distributions from each development company.

Benefits to Technology Organization

The formation of a series of technology development companies presents many benefits to the technology organization:

n Each technology development company seeks out its own people and money resources without drawing upon the existing and typically limited resources of the technology organization.

n Funding of a technology development company will avoid the problems of new funding of the technology organization. Such funding often faces valuation problems with new business partners and dilution of existing owners (Where the the technology organization is a federal laboratory or a university, it is precluded from shared ownership and direct involvement in for profit activities).

n The risk of pursuing a new technology opportunity can be shifted to the technology development company without endangering all of the investment made in the technology organization.

n Reduction of overhead may be gained by the technology organization by contracting under-utilized personnel to the technology development companies and by leasing use of facilities and equipment.

n Multiple market opportunities can be pursued simultaneously even if the technology organization does not have enough time or money.

n Profits realized from successful technology development companies will enhance the perception of the technology organization by existing and prospective investors.

n A significantly higher price may be received for the technology than if the development costs are paid by the licensee or buyer. Such licensees or buyers will demand price concessions for unproven technology.

n The probability of successful exploitation of different applications is improved by use of development and transfer teams customized for each opportunity.

n Individual development companies will attract those investors who prefer a specific focus on a particular market over a pool of opportunities and who would not otherwise invest in the technology organization.

Technology Development LLC's

A limited liability company [LLC] is a hybrid between a corporation and a partnership. It provides the shield of limited corporate liability, while recognizing income at the shareholder level in the same manner as partnership income is reported by the partners within a partnership. It is recognized as a form of business organization in most states and by the Internal Revenue Service. A technology development limited liability company is dedicated to the development and transfer of a single application of the technology. It would be operated only as long as necessary to complete this objective. As an investment vehicle, it provides for an automatic exit, or pay out to investors, upon the licensing or sale of the technology.

Operation of Company

Management of the development comp

Karl Dakin