Contents
Foreword
Preface
Acknowledgments
Part One: Creativity and the Roles of the Inventor, Innovator, and Entrepreneur
Chapter 1: Creativity and the Entrepreneurial Process
Getting That Bright Idea
From Idea to Invention
Distinct Roles of Inventor, Innovator, and Entrepreneur
Closing Thoughts
Chapter 2: Protecting Your Invention
What Is Intellectual Property?
How Intellectual Property Law Works
Basic Forms of Intellectual Property
International Treatment of Intellectual Property Law
Innovation Process: Diffusion and Adoption
Appropriating the Profits of Innovation
How to Decide Which Intellectual Property Tools to Apply
How to Identify Intellectual Property in Your Organization
Developing an Effective Invention Disclosure Process
Chapter Takeaways
Appendix 2.1: Remmey's Granted Patent
Part Two: Building Business Models
Chapter 3: Understanding Strategy Basics
From Strategy as Plan to Strategy as Direction
Introduction to the Strategic Management Process
Why Is Strategy Important for Any Enterprise?
Strategy in a Rapidly Changing High Technology Environment
How Often Should You Change Your Venture's Strategy?
How Do Managers Formulate a Strategy?
Three Levels of Strategy and How They Interrelate
Basic Tools for External Analysis
Internal Analysis and Organizational Design
Understanding Organizations and Their Cultures
Challenges of Organizational Design
How Organizations Survive Turbulence and Change
Reflections on Strategy in the Entrepreneurial Context
Chapter Takeaways
Chapter 4: Strategies to Grow, Restructure, or Harvest Your Business
Growing
Restructuring
Harvesting
Diagnosing the Situational Context of the Industry
Closing Thoughts
Chapter Takeaways
Chapter 5: Key Elements of a Business Model
What Is Your Business Model?
Creating the Business Model Step by Step
Chapter Takeaways
Part Three: Crafting Strategic Alliances
Chapter 6: Introduction to Strategic Alliances
What Is An Alliance?
Strategic Alliances
Forces of Deconstruction on the Value Chain
Vertical Integration Decisions
Strategic Alliances with a High Component of Technology
Chapter Takeaways
Appendix 6.1: Comparison of Main Alliance Modes and Their Contractual Features
Chapter 7: Managing Alliances
Filling the Strategic Gaps
Doing It Better
Step 1: Decide on the Strategic Logic for the Collaboration
Step 2: Select the Right Partnering Candidates
Step 3: Design, Structure and Negotiate the Alliance
Step 4: Managing the Alliance Step 5: Measure and Assess Performance
Step 6: Check the Merits of Continuing the Alliance, Either Adjust or Exit
Step 7: Start the Cycle Anew: Strive to Create a Connected Network of Alliances
Closing Thoughts
Chapter Takeaways
Chapter 8: How Alliances Complete the Value Chain in Biotechnology and Pharmaceutical Business Models
Risks and Uncertainty Associated with Drug Development
Value Chains in Pharmaceuticals and (Bio)Pharmaceuticals
Completion of the Biotechnology and Pharmaceutical Value Chain through Alliance Formation
Business Models in Pharmaceuticals and (Bio)Pharmaceuticals
Recent Trends and Emerging Business Models in Healthcare
Alliance Formation Crucial to Biotechnology and Pharmaceutical Business Models
Chapter Takeaways
Part Four: Understanding Legal Agreements
Chapter 9: Contract Law, Key Legal Agreements for Business, and Incorporation
Elements Constituting a Contract
Form of the Contract
Cross-Cultural Differences in Contractual Agreements
Nondisclosure Agreements
Shareholders' Agreements
Incorporation Issues: Choosing the Appropriate Legal Structure
Sole Trader (Sole Proprietorship)
Corporations
Partnerships
What Is the Right Choice of Vehicle?
Intellectual Property Issues Pertaining to Incorporation
Chapter Takeaways
Chapter 10: Investment Agreements
Investment and Finance
Preferred Shares
Transferability of Shares and Exit
Other Terms of the Investment Agreement
Chapter Takeaways
Appendix 10.1: Investment Term Sheet
Chapter 11: The Intellectual Property Landscape
The IP Perspective
Copyright
Designs
Know-how or Trade Secrets
Trademarks
Closing Thoughts
Chapter Takeaways
Chapter 12: Basics about Patents
Patent Facts
Filing Patents - Overview of International Patent Treaties
Patent Application Processes
Trends in Global Patenting Activity
Closing Thoughts
Chapter Takeaways
Chapter 13: General Patenting Strategies in High Technology Industries
Developing a Patent Strategy for Early-Stage Businesses
Questions to Ask When Devising a Patenting Strategy
Defensive and Offensive Patent Strategies
Real-Life Examples
Strategic Patenting - Claiming First to Win the Battle
Strategic Patent Considerations for Generics Drug Companies
Chapter Takeaways
Chapter 14: Navigating Technology License Agreements
Structure of a Basic Technology Transfer Agreement
Outline of the Agreement
Competition Law and Antitrust Provisions
Heads of Terms or Memorandum of Understanding
Chapter Takeaways
Appendix 14.1: Sample Heads of Terms or Memorandum of Understanding
Part Five: Competitive Intelligence and Due Diligence
Chapter 15: Competitive Intelligence and Patent Searching
Asking the Right Questions - Doing Various Patent Searches
Business Intelligence for Benchmarking
Competitive Intelligence
Carrying Out Information and Patent Searches
Searching for Technical and Business Information
Going from Patent Data toward Technology Intelligence
Chapter Takeaways
Chapter 16: Due Diligence
What Is Due Diligence?
Preliminary Issues before Commencing Due Diligence
How Legal Due Diligence Works
Nonlegal Due Diligence
Issues in Cross-Border Due Diligence
What If Due Diligence Uncovers a Problem?
From Innovation to Cash Flows and Beyond: Due Diligence during the Business Life Cycle
Closing Thoughts
Chapter Takeaways
Part Six: Valuing Company Cash Flows
Chapter 17: Valuation Using Discounted Cash Flow
Why Valuation is an Important Skill to Learn
Compounding and Discounting Money: Present Value Techniques
Definition of Net Present Value
Internal Rate of Return
Meaning of Intrinsic Value
Valuing Young Growth Companies with No Dividends
Overview of Discounted Cash Flow Methods
Present Value of an Infinite Stream of Dividends
Zero-Growth Perpetuity Model
Constant-Growth Model
Multiple-Period Dividend Growth Model
Introduction to the Cost of Equity
Capital Asset Pricing Model
Enterprise Valuation Method
Defining the Weighted Average Cost of Capital
Applying the Enterprise Valuation Approach by Discounting Free Cash Flows
Practical Advice on Selecting the Proper Discount Rate
Establish an Estimated Range of Valuation Values
Next Steps for Testing Your Key Assumptions
Next Steps for Practicing Valuations
Chapter Takeaways
Appendix 17.1: Using the Enterprise Valuation Method to Value a High Technology Company
Chapter 18: Valuation Using Market Multiples and Comparable Deal Transactions
Enterprise Value of the Firm Is a Market Value
Putting the Money to Work in the Business
Why Accounting Values Are Not the Same Thing as Market Values
The Economic Balance Sheet Reflects the Capital Market's View
Financing the Business: The Pecking Order of Finance
Important Characteristics of Equity Markets
Who Sets the Market Price of a Stock?
Measures of Value Used in Appraisals under a Variety of Circumstances
Relative Valuation by Comparing Similar Companies and Transactions
Typical Ratios and Multiples Used in Relative Valuation
Case Study: Determining the Technology Value of a Sample of Comparable Biotechnology Firms
Selecting the Right Multiple for a Given Situation
Chapter Takeaways
Chapter 19: Venture Capital Method of Valuation
Activities of Private Equity Investors: An Overview of the Industry
Financial Intermediaries versus Principal Investors
Buyout Funds
Megafunds
Venture Capital Funds
Typical Venture's Life Cycle of Development
Creating a Venture Capital or Private Equity Fund
How Venture Capitalists Improve Their Chances for Success
Special Case of Life Science Ventures: Recent Exit Trends
Venture Capital Method of Valuing Young Fledgling Firms
Case Study: TSP Enterprises Seeks Venture Financing
Applying the Venture Capital Valuation Method
Adjusting the VC Method for Multiple Rounds of Financing
Summary of Two Financing Rounds for TSP Enterprises
Multiple-Round versus Single-Round Financing
Questions When Applying the Venture Capital Method
Closing Thoughts
Chapter Takeaways
Chapter 20: Valuing and Structuring High Technology Strategic Alliances
Valuing Licenses as the Present Value of the Future Benefits of Ownership and Development
Basic Licensing Models - Sharing the Economic Pie
Case Study: Advanced Dermal Delivery, Inc. and the Launch of the New Transdermal Patch
New Product Opportunity
Licensing Deal
Upcoming Licensing Negotiations
Constructing the Financial Forecasts and Licensing Model
Comparing Spreadsheet Results
Next Steps: Sensitivity Analysis
Developing Scenarios to Quantify the Risks of New Product Failure
Developing Other Likely Scenarios and Negotiating Points
Final Tips on Negotiation Preparations for Structuring the Deal
Chapter Takeaways
Chapter 21: Conclusion
The Basic Broth of Business
Building the High Technology Business Venture
Notes
References
About the Authors
About the Contributors
About the Web site
Index
