1. Methodology adopted by EPO 8° annual Wipo Forum on Intellectual Property and Smes for Intellectual property offices and other relevant Institutions in the OECD Countries Being Investor Ready: the Importance of Intellectual Capital for a Knowledge Intensive Start Up WIPO, Directorate General for Combating Counterfeiting – Italian Patent and Trademark Office (UIBM) Rome, October 5th 2010 Luigi Amati

2. Methodology adopted by EPO Knowledge Intensive Companies (KICs) Key problems of KICs Intellectual Capital (IC) IC and Investor Readiness concepts A case study

3. Methodology adopted by EPO Knowledge Intensive Companies Knowledge Intensive Companies (KICs) are small in numbers but cover a key role in: Strongly affecting with new job creation Playing, as initiators, an increasingly active part in Global Markets and Value Chains

4. Methodology adopted by EPO Knowledge Intensive Companies Few numerically but playing fundamental roles: oFor both quality and quantity employment: 2% of new companies produces 50% of new employment in Europe and 70% in USA oFor the dynamism of the economy: Nokia alone has changed Finlandia phisionomy and perception oCreative destruction: today AT&T only exist as a brand

5. Methodology adopted by EPO Key problems of KIC 1st Problem: their value (assets) is mainly represented by Intangibles: human capital, technology embedded and IP products

6. Methodology adopted by EPO Intellectual Capital = Explicit + Tacit KNOWLEDGE Explicit Useful/novel idea – Patent Original expression - Copyright Distinctive elements (Physical – Shape, Non Physical - Logo) Tacit People!

7. Methodology adopted by EPO 2nd Problem: KICs need (a lot of) money! 3 Fs are not enough! (Fools/Founders, Family, Friends)

8. Methodology adopted by EPO Business Idea Recognition Knowledge Intensive Company! Technology foresight, trend research Identification of market trends Trainings for entrepreneurs and enterprises Skills and abilities needed for successful businesses Tailor made evaluation Mentoring – expert support in feasibility study, business plan, etc, preparation Incubator Location / space, equipment and services for getting started and keep going and growing Access to finance Identifying the most appropriate financing for enterprises (Business Angel Network, proposals etc) Entrepreneurial culture Initiatives, creativity, entrepreneurial spirit stimulation How to become an entrepreneur Business Platform Partnership development, Technology transfer, entering into markets A long, challenging and exciting walk, IC being the first step Intellectual Capital understand, value and protect intangibles

9. Methodology adopted by EPO KNOWLEDGE INTENSIVE IDEAS EARLY STAGE RISK FINANCE Global Value Chains Global Markets Investor Readiness IC Management New KICs (CONSTANT FLOW OF INDEPENDENT IDEAS CONCEPTS, PRODUCTS) KICs and Seed Capital

10. Methodology adopted by EPO Balanced & committed Management Team High growth potentials Sustainable Business Model Suitable strategies: with deliverable goals … a clear way out strategy ….presence of a strong strategy for intellectual capital (intellectual capital readiness) Investors are looking for…

11. Methodology adopted by EPO oMonitoring of competitive products/technologies/patents oCorrectly employing the legal tools in protecting products/technologies oEnsuring key resources (including people) are protected IC Readiness of intangible KICs

12. Methodology adopted by EPO Being able to present to early stage investors your business proposition in a convincing way, including… ……To be appealing to investors you need to be investor ready, which means….

13. Methodology adopted by EPO Intellectual capital readiness Attention, from initial stages, to ensure an adequate development and protection of the product The commercial viability of IP product

14. Methodology adopted by EPO Intellectual capital readiness IC protection increases early stage investors interests in a KIC by providing further, strong, guarantees on future returns on investments

15. Methodology adopted by EPO A Case Study: Pharmaeste (1/4) oBiotech spin-off from the University of Ferrara oResearch and development of drugs for pain: treatment of pathologies as neuropathic pain oMedical (biotech) research requires long development times (10-15 years) with high costs (hundreds of millions of ): IC protection is thus one of the most decisive factors for the success of a spin-off

16. Methodology adopted by EPO A Case Study: Pharmaeste (2/4) oThe University of Ferrara has given it: 5 patents and as many active principles; 3 full time researchers; 4 researchers on a contract; 3 high levels scientific advisors oFunding: the company has received 3.2 million oFinancial resources raised for the different development phases: 1. Phase 1 (toxicity verification) 6 million 2. Phase 2 (efficacy verification) 12 million 3. Phase 3 (clinical experimentation) 20 million

17. Methodology adopted by EPO A Case Study: Pharmaeste (3/4) oIP protection involves constant monitoring on the state of the art of alternative products and surveys on the IPRs of other pharmaceutical companies oThe IPR was secured by international patents, only critical element was valuation o……

18. Methodology adopted by EPO A Case Study: Pharmaeste (4/4) o Key people! oExternal CEO oConfidentiality agreement oBad leaver clause oStock option plan

19. Methodology adopted by EPO Thank you for you kind attention Luigi Amati luigi.amati@meta-group.com www.meta-group.com