- Space Entrepreneurs Provide the Focus for a Major USC Marshall Event
- Meet Visiting Technology Research Scholar Johan Bruneel
- The Third Installment in the CTC Entrepreneurial Finance Series: Exiting through IPO, Merger, or Buyout
Space Entrepreneurs Provide the Focus for a Major USC Marshall Event
On April 4, 2006, CTC will host the first Thought Leader Forum to focus on the private space industry and how USC can educate the next generation of space entrepreneurs. It is called Space Billionaires: Educating the Next Generation of Space Entrepreneurs For decades, aerospace was a critical industry in Southern California dominated by huge government contractors. In fact, a recent survey by the Los Angeles County Business Technology Center, a CTC partner, found that, historically, aerospace technology is considered to be the most important technology to come out of Southern California. That same survey found that nanotechnology, biotechnology, and wireless are the three technologies to watch in the future. Does this mean that aerospace is on the decline? Nothing could be further from the truth. In fact, recent advances in materials and information techologies as well as regulatory changes have helped to spur an emerging interest in the private space industry. More importantly, new business models have made the private industry an increasingly attractive launchpad for entrepreneurs wishing to start companies that serve the industry. No one knows this better than The Honorable Andrea Seastrand, Exec. Director of the California Space Authority, who will be our kick-off speaker. In December 2005, the federal government, gave credence to one segment of the private space industry when it released a 123-page document spelling out the proposed rules governing space tourism.One of the leaders of the space tourism segment of the industry, John Spencer, president of the Space Tourism Society and Red Planet Ventures, will be moderating a lively roundtable discussion about opportunities in the industry for entrepreneurs and the investment community. He will be joined by Bill Collins, managing director of Starboard Venture Partners and an investor in Zero Gravity Corporation; Dr. Fred Best, coordinator of NASA's eleven commercialization centers; Jeff Greason, co-founder of XCOR Corp.; and Karen Randall, director of special projects for the SETI Institute. Last year, SpaceShipOne, designed by Burt Rutan and funded by Microsoft founder Paul Allen, achieved the first manned flight by a private spaceship to win the Ansari X-Prize. Dr. Peter Diamandis is the co-founder of the X Prize Foundation, the founder of the International Space University in France, and the co-founder of Space Adventures, which brokered the flight of businessman Dennis Tito, the first private citizen in space, to the International Space Station. Dr. Diamandis will be our keynote speaker. The afternoon roundtable discussion turns to how to prepare the next generation of leaders in the space industry, particularly the next generation of entrepreneurs who will follow in the footsteps of Elon Musk, Jeff Bezos, and all the other pioneers in this dynamic new industry. The discussion features attorney and space investor Rick Citron to moderate a diverse roundtable that includes Janice Dunn from the California Space Authority; Guillermo Sohnlein, President of the International Association of Space Entrepreneurs; Kevin Bartram, president of Sponsorship Strategies; Tom O'Malia, Director of the Lloyd Greif Center for Entrepreneurial Studies at USC; and Madhu Thanavelu-Girardey, Conductor of the Graduate Space Concepts Studio at the Viterbi School of Engineering at USC. David Knight, a serial entrepreneur with over twenty years experience in starting, building, selling and taking public companies in the consumer and technology arenas, will wrap up the day's discussions in his own inimitable style focusing on the role that USC can play in this emerging industry.. A networking reception featuring Astronaut Buzz Aldrin and other surprise guests will complete this exciting day. For more information and to register, please go to http://www.usc.edu/org/techalliance/Space2006_home.htm Faculty and students should contact Kathleen Allen for a special discount code. There is limited seating for faculty and students at this rate.
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Meet Visiting Technology Research Scholar Johan Bruneel from Belgium You recently participated in a research project that benchmarks different European models for nurturing and growing innovative start-ups. What are the common characteristics of successful models? Probably the most important characteristic of successful models is a clear strategy and vision on what is needed to meet the specific needs of start-ups. Organizations, such as business incubation centers, can only be successful in supporting start-ups if they act as coherent entities that coordinate the different aspects of supporting start-ups. The successful models we studied acted as a one-stop-shop for entrepreneurs that wanted to start an innovative company. These organizations offer financing, networks, and coaching to the start-up companies along their life cycle, which implies that such groups have their own means and people to develop this type of support organization. A second characteristic of the successful models is that they identify the entrepreneurs before they actually start the company. The decisions made during the funding of a company have significant implications that may make the future coaching process less efficient. One example is the effect of external investors. Companies that have external investors on board have a commitment to these investors and a set plan of action that makes the coaching by the incubator team more difficult. Based on your observation of some of these successful models in Europe, what have you concluded in terms of the financing of start-ups? Do you have any recommendations? We have learned that financing of innovative start-ups should be phased, and equity investment built up gradually. The amount of money a start-up needs depends strongly on the stage of its development. Before founding the company, entrepreneurs often need to test and evaluate the assumptions in the business plan. This refinement of the business plan requires very limited amounts of money, typically between $15,000 and $30,000. Entrepreneurs often lack these sums. It is much more difficult in Europe than in the Unites States to accumulate personal funds, mainly due to the institutional system. Although gross salaries in Europe are comparable to those in the US, the net salaries are much lower because of high social security costs. In addition, private investors are only interested in larger deals and investments. Investing these small amounts reflect on their returns because of proportionally higher costs of due diligence, managing and monitoring. As a result, a lot of potentially viable projects fail to get funding. To tackle this problem, the successful models cooperate with local/national government agencies that provide these amounts in the form of subsidies. A second important factor that contributes to the success of the studied models is that they have their own fund. This fund is especially important to bridge the gap between local seed funds, angels, and the professional venture capital funds. How important is the role of coaches in the success of the start-ups? Several studies show that most innovative start-ups are founded by people who have only worked in a research environment, whether it is in a university, public research organization, or incumbent firm. As a consequence, the commercial and marketing skills necessary to develop the business model are often missing. One could assume that start-ups can bypass this knowledge gap by hiring experienced consultants via the market. However, start-ups do not have the financial means to attract professional guidance and conversely consultants have little experience in coaching start-ups which makes their advice often irrelevant. Based on our study, we saw that start-ups need both active and passive coaching. Active coaching entails the guidance of the trajectory (e.g. choosing the best business model, evaluating the technology, and the freedom to operate…) while passive coaching refers to the sounding board function, which is equally important. What we learned, though, is that both forms of coaching are complementary. Let me clarify this with the discussion of one of the models we studied. The Finnish model, Sitra PreSeed Service, started as a network of Angel investors. Their assumption was that Angel investors, in addition to providing funds, also actively help the start-ups in their further development. In practice, however, Angel investors proved to be quite passive and only fulfilled their role as board members. As a reaction, Sitra started to set up an additional network of experienced business developers who want to join the founding team of an innovative start-up. To contact Johan Bruneel, please call the Greif Entrepreneurship Center at 213-740-0641.
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The Third Installment in the CTC Entrepreneurial Finance Series: Exiting through IPO, Merger, or Buyout On February 21 at 5:30 p.m., CTC will present the thrid in a series of Expert Panels on Entrepreneurial Finance, sponsored by Alschuler Grossman Stein & Kahan LLP . The focus of this panel is exiting the venture through an IPO, merger, or buyout. At some point in the life of a new venture, the entrepreneur (and the investor!) will want to capture the wealth created by the successful growth of the company. Our expert panel considers the various ways to do that as well as which is most appropriate for a particular type of venture and what the timing should be. Louis Dienes has put together a stellar panel consisting of Rachael S. Wexler, a partner in Alschuler Grossman Stein & Kahan LLP’s Transactional Department. About the USC Marshall Center for Technology Commercialization The USC Marshall Center for Technology Commercialization identifies, encourages, and supports technology entrepreneurship activities at the University of Southern California and its broader Southern California neighborhood. For over five years, it has been the central source of information, research, education, and services related to the commercialization of USC technology through new start-up ventures. CTC assists inventors with IP issues, business feasibility analysis, business plan development, start-up financing, management team acquisition, and related issues. |
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Johan Bruneel is spending four months at USC in the Lloyd Greif Center for Entrepreneurial Studies to work with Asst. Professor Helena Yli-Renko on an important global study of how innovative start-ups develop their internationalization strategies.
