Speaker 1 0:00 Good afternoon and welcome to today's spotlight session webinar, entrepreneurship and express licenses presented my Autumn. My name is Sammy Spiegel, one of autumns professional development managers and I will be your staff host for today. We're continuing the great discussion started during our annual meeting in New Orleans with a new online opportunity item spotlight sessions. During today's session, you'll watch a popular panel recorded at the annual meeting, then participate live with our panelists for a dynamic question and answer session. All lines have been muted to ensure high quality audio and today's session is being recorded. If you have a question for our panelists, we encourage you to use the q&a feature on your zoom toolbar. If you have a technical question or comment, please feel free to use the chat. Should you need closed captioning during today's session, Zoom closed captioning feature is turned on and available on your toolbar. Before we begin, I would like to take a moment to acknowledge and thank autumns online professional development sponsors, Marshall, Gerstein, IP and the Michelson Institute for intellectual property. We appreciate your ongoing support. I now have the pleasure of introducing you to our spotlight session presenters from the original presentation and some will be joining for today's q&a. Viva Brady Carnegie Mellon's University University's manager, business development and licensing has more than 10 years experience in academia both in teaching research and an administration. She worked in universities around the world including Morocco, Mexico, and the US teaching different courses and managing multiple projects where the common denominator is technology and communication. HeyMy Chopra, the moderator for today's panel manages the life sciences portfolio starting from the inception of the invention to licensing and commercialization at UN ventures. Amy has several years experience in technology transfer matters including past positions at the Brigham and Women's Hospital, and University of Massachusetts. She received her PhD from Wayne State University and MBA from Boston University. Kelly Parsons, Associate Director of Technology Commercialization at University of North Carolina, join the Office of Technology Commercialization in 2008. Prior to joining the UNC office, Kelly participated in the UNC Kenan Flagler business schools launched the Venture Program. Kelly is a registered patent agent and earned her bachelor's degree in biology with a minor in chemistry from Virginia Tech University and her PhD in microbiology and immunology from Wake Forest University. Ken Porter, the UN ventures director needs a team of dedicated professionals who serve faculty, staff and students at the university. Sorry, I see a chat coming through okay, just making sure it wasn't any technical issues on my end, sorry about that. can serve most recently an innovate Calgary as VP for IP management, and Director of Social and clinical innovations where he co founded the western Canadian innovation offices. He holds a BS degree from University of North Carolina at Chapel Hill and PhD in chemistry and MBA degrees from Duke University. Joining us for the q&a today is Rebic matagal, Carnegie Mellon Senior Manager licensing and business development and mentor in residence. He has been at CMU since 2006, and now focuses his efforts on assisting with the formation of startup companies around the university inventions from all departments. CMU tech transfer office has launched about 10 to 12 startup companies per year over the last 10 years, or on university owned inventions, making CMU one of the most efficient universities and startup company creation for research dollar. Reid received a BA in Political Science and Economics from the University of Dayton, a JD from the University of Pennsylvania and an MBA from CMU. Welcome all. I will now launch the presentation delivered at the annual meeting in New Orleans attendees. Please submit your questions for our panelists throughout the presentation, you'll be able to at the end as well. And once our recording concludes, our panelists will join live to answer your questions. Speaker 1 4:04 So very much him and thank you to my esteemed collaborators, Speaker 2 4:08 and to everyone who is in this session, get along and don't turn him over this mask. So I am foodweb washing Brady, one of the licensing managers in the tech transfer office in Carnegie Mellon. I am here in place of our associate vice president who was supposed to be here, but some for some personal matters. He unfortunately could not join us. And I'm going to take you today in 10 minutes really quickly, so I might skip a few of the slides to keep it for the asked questions. So in the journey that we took in Carnegie Mellon for Express licensing. So this journey started in a very special unit that we have in the university under the robotics Institute, and it's called the anorak or the Nash A Robotics Engineering Consortium, and he started in 1998. Now, the tech transfer office in Carnegie Mellon started in 1993. So you think about it? Well, coming up with all these numbers, we had really just few comparatives and few success stories to rely on. So in anorak, we decided we're going to run this pilot. Why? Because Enric works on technologies that are really high up there at the TRL at the technology readiness level, and they are ready to be go into the market. So this specific technology where we started the pilot, the core tech was funded by NASA. And the wrapper technologies were funded by different industries, for example, the vision system was funded by NASA. And then the wrapper Technologies was funded by, let's say, Ford. So what we were in is pretty much homogeneous technology. And we thought, why not think about a license? That would be for all, and why not think about some terms and conditions that would suit this pool? What we came up with in 1998 was two standard deals. And you could read them right there. So type A 10% equity, with royalties, that's half market. Type B was 15%. Equity, no royalties. And that was based on the few numbers or comparatives that we had one of our startups at the time 1997 was public, Lycos, if you remember, like us, a CMU spin off that went public. And so we said, oh, well, probably more is gonna go public. So let's just get full equity. Then we offered few services with this tendered license. And these are we the university would take on hiring outside counsel in order to help incorporate these spin offs in order to do the shareholder agreements in order to do the bylaws, etc. Then, if they would like some incubation space, it's there to take, we had opened the Align credit and offered it for $25,000. Then we keyed in in this tendered license the initial sender license into pilot some time, a number of hours of the the Technology Transfer offices officer say 10 hours from the directors, the executive director in order to help through this journey. We negotiated and see dilution cause to $2 million, we had a board seat. And then within this board seed, we had some veto rights on transactions that would dilute equity. So then, what we said is we ran with the pilot, and then within one year, we actually deployed it throughout the entire university. And throughout this entire university. Remember how I said in our AC works on some high TRL? Well, not all the seven schools within CMU work on this technology that's ready to be pushed to market. So for example, our probably Heinz school psychology departments might not have a technology that's ready. So what are we going to do? We just decided we're going to be fair to everybody. And this is going to be the center plan for all faculty members. And then we're running with it. We had few prerequisites that have to happen. And these fewer prerequisites are still happening today. We had to have at least once the Muir as a founder, we had to weave sharing under the CMU policy, and then we adjust for the non waiving creators, then we keyed in the business plan. We don't ask for the business plan from the get go. We keyed in as milestones in our standard agreement. And then no, absolutely no substantial investments from the university towards the IP or towards the company. So these are prerequisites for this to happen. Okay. So remember how I said that we had rights and we had board seats, and then we had anti dilution clause. Okay. So we had we ran with these guidelines for four years, we had a little bit of fighting with the VCs because we asked for things that they usually ask for, and they're happy to have but they didn't want to share with universities. So there was a little bit of, quote unquote, fighting, maybe little shenanigans there. So we, we thought, as we're going through this process, the back and forth with the VCs It took time for the investment to happen in the company. Did it happen? Yes. But for how long? And What? What? What is the quality of that process? So if you see the end tunnel, yes, the investment was poured in the spin off. But is it worth it? We asked this question. What can Carnegie Mellon do to maximize the opportunity for success of the inventor, creator, and the spin off for our mutual benefit without substantially increasing the risk to the university? And so we went back, and then we wanted to assess the situation. Like, can we really reduce the shenanigans? Pretty much. So what you have here in this slide is a comparison between the pilot that we run with all the numbers and we all the package services. And then what after brainstorming, after doing some benchmarking, we actually talked to the VCs, who wrote letters to our CMU president saying that C Tech really, really is bad. And and we talked to our faculty members, because by 2000, we had a pool of seasoned entrepreneurs, not just first timers who are going into the deal, for the very first time, we saw what happened in the market. So we had a little bit of comparatives to us. And we came up with this equation. So I'll let you read the equation. It's pretty much 5%, equity, 1% royalties, for non exclusive licenses, plus warrant, and then we do a 1% premium for the exclusive so it becomes 6%, equity, 2% royalties. Now, one of the good things that the VCs really liked us like, is dual royalties for three years, when you pour in when you pour the cash into when you invest in our spin offs, the cash stays within the startup, it's not going to be extended to the university. Then we said, okay, what can we do to really be successful is to bring our faculty member close by, we're not going to be sitting across from the faculty member are going to decide for what they can choose in order to make a successful deal. They have to choose it. So it becomes a discussion. And this is what they could choose from in 2002. Would you like us to be involved in your legal documents? Would you need some incubation space? Do you still need the line of credit, we're going to have different patents expense for up to three years, we have no special protections or right no veto rights, no board seat, no shenanigans were moving on. Then with it, thank you, 2000. And, and eight, we had to do a little bit of more thinking after we produced few of the startups and we benchmarked for, and then not much changed. When we looked at this from 2002 to 2008, really not much changed, other than we replaced the line of credit with gap funding, rather. Because some use that as revolving credit rather than just $25,000. You buy equipment and you start the work. Still, we have different patents, expenses, and then still no special protections. And with the no special protections, there were some pros and cons. And even prior to 2008, for our guidelines, when we presented when we presented these slides to upper management, these were the advantages and these were the does advantages. And then as a conclusion, we actually had all of them. Speaker 2 14:02 So the ones that I would cite is everybody was happy about the fact that the cache stays in the startup for up to three years. Then we had then we had transparency, we just put our Terms and Conditions licenses online for everybody to see. Then we removed ourselves from any special rights so that our startups get some smart money fast. We knew that we're gonna get lower equity and lower returns. But then at the time, still we had no data and the removal of the special rates and DeVito wing just helped few of they're always bad guys to have Have to be bad guys. But then you learn from it's one over all the ones that we had, as startups. And, and we learned from it. So here goes with those special rates. And with the pilot, we used to have two startups per year. Now we have 10 startups per year. And then we had one symbol of startup that decided to increase its option pool from 15 to 20%. That's normal to actually 65%. And you can guess what that would that did to everyone. The VCs really liked the warrants and introduction of the warrants, we started speaking their own language, though, mathematically, anti dilution up to 2 million or the warrant 2 million is pretty much the same. Our companies have raised up to 1.7 billion and this number is really, really low, because all we compute is based on pitch book.com, if you know pitch book.com so that it's public information, it's disclosed. We are using one reference rather than the startup itself. Some startups would give us the numbers would not. And then we had some multiple acquisition and successes, we Duolingo being the largest and most recent. What's next for Carnegie Mellon? We are in the process of pretty much finalizing these steps. So for software, and there's a lot of software, and CMU, no patents only copyrights, we want to have the rates. So 3% equity for exclusive and two and a half for non exclusive both instances would we would be 1% royalties. And for open source after benchmarking and talking to peers, and then doing few of our investigations, we ended up deciding we're going to use UC Berkeley's idea. So thank you, whomever is from UC Berkeley, thank you very much. We're going to take your good standing agreement with the 1% equity dilutable faculty choice, discuss it and we think we're going to roll with it. So that is for. That's for Carnegie Mellon. And it's standard spin off license. And now, am I within time, you can Unknown Speaker 17:34 talk for two minutes. Speaker 2 17:39 What can I do? Can I take a question? Sure. Yes, as long as I welcome probably one question. Yeah. And please, Speaker 3 17:48 all of any of you and all of you who has a question, please use the microphone, because it's actually distinct recorded. Speaker 4 17:56 I have one question. Can you talk a little bit about more about the terms of the warrant? Speaker 2 18:04 Yes, I can, if you allow me to get. So the warrant actually is keyed in our license and it says the following. So what it says is within 30 days from the effective day licensee will execute or deliver the shares. And then we'll execute or issue the warrant. Did they did the licensees cumulative capital funding equals the sum of 2 million or 30 days prior to any change of control event? And so as you know, or many of you do, we just attach it for with the template for them to execute whenever they're ready, and you could find it in our template online. If that's that's a Speaker 5 19:11 quick question. I was surprised to see 5% equity for a non exclusive license. I'm wondering of your I mean, it'd be very unusual for any of our startups to take a non exclusive so of the deals you've done, how many of them are non exclusive, how many exclusive? Very Speaker 2 19:25 good question, I do not have the exact number for that to let you know accurately. Sorry, but I know that we do not get the push that we get from any faculty member regarding the the 5% or the 6% is when they go and compare to another university. And then they come up with just that comparative rather than, for example, say another university would would liquidate and sell within the first round of funding while we wait until a certain time Um, so it's if there is any push, it's easy to convince the faculty member to for divine. Speaker 6 20:08 So UNC Chapel Hill launched its Carolina Express program in 2009, with the first license being executed in March of 2010. This is a standard, fully non negotiable license exclusively exclusively for use by early stage UNC startup companies. And certainly it was controversial at the time. I do remember actually being I think it was in New Orleans in 2010, being in the audience, and actually had one of the panelists call me back and say, Archie from UNC, you're the person who did this Express license thing. So I'm glad to be here a few years later down the road to kind of talk about what our experience has been with us. Startups are not required to use the Express license. And so we've certainly had plenty of companies come back, especially initially and say, Well, can we just tweak this section or this section? Or can you make these small changes. And what we found to be really useful in implementing this was to come back with a hard stance of saying you can either take this license exactly as its presented, or will offer you a standard market license, and we can work from there. And so I would say kind of, in over a decade, I've had one company actually come back and want to negotiate versus Oh, nevermind, we'll take we'll take the very friendly financials that you're offering in this license. We've now executed this license with over 70 companies at UNC and 50 Plus, of those are still active. So we do feel that the Express license has met a number of the original goals that it was implemented to carry out. One certainly was to foster foster an entrepreneurial culture. So you know, this was initially triggered by some activities, as most often are of maybe more politically empowered faculty members, right to, you know, with complaints of what takes so long to get a license to the tech transfer office, it takes so long to get my company started. I think the reality is, is we had to take think about this as a win win scenario. As most of you probably aware, the reason that that process sometimes takes a really long time is because the founders or maybe not seasoned entrepreneurs, they're not familiar with how to negotiate an agreement or what they should be considering. So at the end of the day, it was really a win to be able to take for us, a very bare bones staff, and I know most of us are, would love to have a few more bodies in our offices. So we could really cut down the amount of time that they spent working on these deals. And what we really also wanted to take advantage of here was we really didn't want our startup companies using the very limited resources that they had paying attorneys to negotiate against us. Right, we really wanted that money going into developing the technology. And then ideally, paying that patent cost, right that we were much better served there than having attorneys be able to charge billable hours to basically go back and forth with us. There also was a desire to promote transparency among the faculty. Right. So they're, you know, there's always the talking amongst inventors of oh, well, you got a better deal than I did, right. And so this kind of cut that off at the knees and saying, Look, you know, this is going to be the set deal for everybody. We also wanted to make sure that these licenses were attractive for investment and for partnership. And so we feel like we've accomplished that as well. So for us kind of our rule is that this sealer is generally available. If right, so we do have a list of criteria that they have to hit. One is that we ask that they submit a detailed business plan application. And so kind of to hit on that I think you kind of mentioned this, we're not asking them for a full business plan, right? A lot of these companies are very, very early. And that would simply be an overreach. But we have a set of questions that have evolved over time that we ask these companies to walk through. And that allows us to evaluate whether or not they're actually ready to start a company. So even though we are offering this to you and startup companies, we do utilize that as an opportunity to kind of tap the brakes and say, Okay, we're still behind this. But there's clearly some aspects of this company you haven't thought through and let's work through those further before you actually launch the company. All the IP rights do have to be owned by you and see. So simply, certainly, what we don't want to do is force these terms down the throats of our university collaborators. We have a lot of successful collaborations and CO owned IP with other institutions. And so our general stance is that if it's cold With other institution, these, this license is off the table. We have had some cases where the other university reached out and said, we're happy with this, let's just proceed. But most of the time we do a standard license in that case, as I mentioned, we don't accept any modifications other than due diligence milestones are negotiated. And I think where this is playing in more now than ever, is that we have agreed internally that this license, as drafted, will not necessarily be available if significant resources had been invested by the institution. So, you know, what we're seeing at UNC and others is that, thankfully, departments in schools and even our vice chancellor for research is starting to think more proactively about how to actually invest internally in technology development. So if we're really advancing the technology in house, we want to think about terms that reflect that level of advancement into the technology. So lessons learned, and thanks to consider, you know, certainly our office spent a lot of time sure Kathy, about there could speak to this. When this was first rolled out in 2009, talking to local VCs, talking to corporate counsel, and coming to terms that they felt like they could endorse what their clients and that they would be willing to invest in. And I think that really, that took a lot of time. But I think it did really pay off in the end. And that, you know, for us, at least in our area, there were three or four firms that were representing most of our companies. So if all of them were kind of bought into the language, it was really easy to get the folks that they were working for, to kind of buy into this model. So that worked quite well for us. We did have to decide on approach for how to manage requests for changes. So I know that there are expressed licenses, with other institutions where they will agree to negotiate to some level, I have found taking a hard stance has made our life easier. The other thing that we saw, initially, I don't see as much anymore, where I had companies, third party companies coming in and saying, Okay, I'm gonna send you a term sheet. And they would send me the Express license term sheet, right. And so the stance that I've taken there is to simply go back and say that's not available to you start over. So I won't even negotiate from that line. And I think that's really kind of helped kind of squash that. Speaker 6 27:29 One lesson that that we really had to learn, the hard way was that startups will pivot, right. And so I think we've all seen that plenty of times, where we have, you know, startup companies coming out of the university, we put in a lot of time and resources to help them get off the ground. But ultimately, the university technology really didn't get legs. And so they moved on to something else and move forward. And so I'll go into the exact terms here in a second. But initially, the way the upfront fee was Bayes was an exit fee. And the reason for that is that UNC does not have a school of engineering, we're not an ag school. So we're really heavily life science based, right. So we're gonna, we're talking 80 to 90% of the technologies that we're working on, are going to be biotech. And so there are two factors there. One, we all know the rate of success there is low, we're going to see a lot of this company simply not make it just because that's the nature of space. The second issue is, once again, we had a lot of really early stage technologies, and really a lot of first time founders. And so dealing with them with the equity and the documents was really a heavy lift for our office, especially given the number of startups that we were doing. So we use the exit fee to say, Okay, let's do this. So that way, we're not kind of putting that burden on ourselves and the company to move forward. The problem there is, you know, if they terminated the license with the university, it was very difficult, even if it survived termination to make good on that exit fee. So we have now, and I'll show you this in a second, we now have kind of gone to a little bit of a hybrid model of taking some equity in the companies to try to kind of get at the value that universities putting in there. And others determine if the different different terms needed for different technology types, right. So I think this is always a case of Know thyself. Know the culture of your university know the types of technologies you're handling. And so right now at UNC, we really are starting to see a lot more interest and resources being pumped into software, thinking about you know, healthcare and it and those technologies don't inherently fit very well with the standard terms for our biotech licenses. And so we are exploring, putting together a separate Express license for for that type of technology. So obviously want to keep that in mind as well. And then I would also recommend establishing a process upfront for updating your Express license terms. So this is a We've been there done that. So, you know, our Express license was put into place shortly after the Great Recession. The terms reflected that right? You know, at any las auto meeting, etc, all you heard was the sky was falling, there is no money, how are we going to get these things out? Right. And our terms reflected that the issue that we had was that there really wasn't a clear mechanism in place for us to come in and update them. Right, it was kind of this, here's what you've been promised. And here's what you're going to continue to get. And so, this past year, we undertook an effort to get buy in from across the university, and from our local area to say, look, we at least need to adjust, we're still going to be pretty light handed. So as you'll see here, I still tell most of my faculty when they complain about terms, that I consider their license effectively free. So once I showed them some real market terms, they got pretty quiet even about the updates to the license. But as you'll see here, for the exit fee, we went from the point seven 5% fee to a 1% fee, that actually now converts to 5% equity among $2 million upon $2 million of investment in the company. So once again, this was our way of trying to still avoid a lot of the early stage equity paperwork, that was a struggle for the companies. And for us, while still having an opportunity to take equity in the companies when appropriate. For clinically approved products, we've gone from 1% to 2% royalties, non clinically approved products has gone from two to three. And then another space that frankly, we kept hitting that didn't fit within our model were licensed services. So we had a lot of companies that wanted to use, whether it be models or technologies to provide whether it was cdmo, or contract research organizations. And that really didn't fit well. So we've kind of built that into our Express license now, so that we can address that easily. We did slightly increase sub licensing fees, but we do tear them back down at 10% After completion of a phase one. And then for sub licensing, royalty revenue, this is probably a whole different panel of how to kind of get at that some of the rationale, at least for taking 20% of what the what the stirrups received initially, was just the ability to to audit that number. But the reality is we realized at the end of the day that we were giving a substantial piece of revenue, by not just having it paid through to sublicensees, we've now added pre emptive rights, our maintenance fees have stayed the same, I would say one area that, you know, probably I would have liked to address were milestone fees. But we felt like we were kind of, you know, picking our poison, right or the things you wanted to adjust. And ultimately we decided to delete those out. And then we do allow a one year grace period for payment of patent expenses under the Express license, I will say that I'm gonna get a big kind of asterisk next to this one. And that we do allow provisional PCT and us cost to float under this one year grace period. That does not apply to foreign filings. So if a startup company wants to fall foreign, they have to pay out the pocket day one. And so one thing we have had to be careful about as well in this scenario, are companies that understand the grace period, and understand timing. And that if they're if they're clever enough, right, they could time it such that some of these more expensive filings fall under the grace period. And so so we've eliminated that. We're pretty vocal with them about what we're going to cover and not going to cover. One thing that's not detailed here, but it's it's on our website, happy to share with anyone is that if a company comes back and says, Look, you know that one year is coming up. And we don't have the cash than it's at our offices discretion to negotiate a payment plan with that company. Right. So we may take additional equity, and has some other increases in the financials in exchange for for payment plan. With that, I'll turn it over to Ken. Unknown Speaker 34:15 And if anyone has questions Unknown Speaker 34:18 quicker, yeah, absolutely. I'm gonna sit here. Speaker 7 34:24 Kelly, how do you determine what is a significant fraction or a significant amount of further investment, that translational investment that goes into a company that would disqualify it from this opportunity? Speaker 6 34:35 Yeah, that's a good question. So I think actually talking from Bob, because do you have an equation I believe for like the hard number? Was it like a million dollars or something like that? I'd say for us, it's more of you know it when you see it. And that actually has worked pretty well. Right. So I think one thing that our office has excelled at is just lines of communication with faculty and with departments, and so on. Then when we see that initial company interest, we immediately have those conversations and reach out and say, Okay, let's talk about what's being done here, what your company is going to do, and what the expectations should be. The nice thing is that a lot of our internal resources are now being kind of formally rolled out. And so if you're going to take money, you're going to take it off formally under one of these programs. So it's really clear to say, Okay, you participated in X program, therefore, you may not be eligible. And what's really interesting is we've actually had a few of those programs, route grant language through our office that basically says, this is going to go in the award letter. And there's a statement that will say something like, you know, in exchange of, you know, accepting these these funds for this project, you recognize that, you know, this program internally, and then the Office of Technology Commercialization, maintain and likely will not grant you either a startup company, in some cases, they just simply prefer that and not even go into a startup company, or that they're going to be at the table for discussing what type of license terms they're going to get. So that's made that a little easier as well. Any other questions? Speaker 8 36:14 I'd like to stay seated. Can everybody hear me? Okay? We have a big sign here that says his mics are really sensitive. Be careful with that. So I will try to be careful, we're really pleased to be here. And we were gratified by the turnout. Kelly and I did this panel at the eastern reading region meeting in Raleigh. Last time, we had an Eastern Region meeting. And the audience was a yes, thank you very much. I have gotten to the end of talks and people and back said, Well, I didn't hear what you said. Eastern Region meeting most of them What 2018. And actually, Carnegie Mellon was represented also, Scott, what's God's blessing? Bob, Scott, Scott at Carnegie Mellon was represented. So we have basically the same panel, and about the same size of audience and we went through all of our stuff. And we said, who in the audience uses an express approach, and two people raise their hand. And so I'll start that off. So who in the audience uses an express approach? Okay, so we're growing. We're growing. And so I'd like to start out by, you know, building off of one of Kelly's slides, which is why why do we do this and, and there are lots of reasons and Kelly listed some great ones, and you have support the ecosystem support, entrepreneurship, support, the faculty, the fairness, all those things are, are great reasons for doing express the Express approach. I was first exposed to it in Boulder. Back in the early 2000s. Kyle left cough was a managing partner for boulder ventures. And Kyle said, If you want my money, the deal is 1% equity, all the way through. So and in, in essence, 1% exit fee. And so if you wanted to cause money, that's how you did it. So the reason we did it, and bolder was because it was foisted upon us, it was demanded upon us and, and actually worked, okay, because, you know, it really supports to get the technology, I'll approach and support faculties for the ecosystem. So fine, we did it. And then I moved to Calgary in 2013. And, and when I got to Calgary, they had a complete the complete opposite model, really, really bespoke model. So we had a 2000 square foot to 200,000 square foot incubator. And we had money we were at like a separate 501 C three from the University of Calgary was called the Innovate Calgary. And the approach in 2013 was, we'd invest in companies, we'd start the companies, and so we'd find a CEO, we put a quarter million dollars and quarter, quarter million dollars in we would provide back office support CEO, you know, the whole deal. And before that, we would take 50% equity in the company. And, and that model works great. And there was some terrific successes that came out of that model. But you can only do that once or twice a year because it was so labor and capital intensive. And so that meant that you said yes to two opportunities. You said no to all of the other ones. And the faculty started becoming disaffected with that model. And so that had to stop because we were losing the we're losing the support of the faculty. And so we say, well, let's, let's do exactly the opposite of that. And let's get some deals on the table. We have to we kind of have to rescue our reputation. And and so we knew about the Carolina Express model and a couple Kathy and Kathy was tremendously helpful and helping us set up an approach that could get turned us into from bespoke into a volume office. And and the terms and in Canada. The the inventors, well, there's no by dole in Canada, and so and so the VIP P IP ownership is governed by university policy. And so like University of British Columbia is institution owned, just like the US. University of Waterloo is inventor owned with hardly any reporting requirements University of Toronto is 5050 joint ownership at the University of Calgary he was inventor owned, but the inventor had an obligation to share royalties with the university if they made royalties. And remember, we're a separate organization. And so if faculty wanted to work with us, they had to assign to us. And so we owned we a private company, a for profit, we were a for profit company, owning the IP, and then we would put it into a startup, we could assign it. And so we had, we went one better, we had an Express Assignment and express license, and that got us into some trouble. And a couple of places, I wouldn't recommend it. But our but our deals are our deal terms were 1% royalty and 1% Exit fee. And so the idea is just to get it out the door. And, and that had been modified over time, over time. But that really did kind of turn us around in the eyes of the faculty, and the eyes and the, in the entrepreneurship ecosystem. So so that were great, to some extent. And, and then I went to University of Maryland three years ago. And when I got there, folks, we're already putting the Express, we're roughing in the the Express approach. And so we took we took about a year to update our license agreement and kind of refine our terms a bit. And, and we've been using it now for about 18 months. So so that's our so that's our experience so far, and in Maryland, and and then wanted to talk to us a little bit about the why again, so why do it, why are we doing it and, and so while we were, while we were rewriting our license, we're always working on our strategy. And you know, nothing, nothing to surprise anyone our our mission is to is to, is to from the research at the University of Maryland to create positive economic and societal benefit, yay. And then the objectives under that are to support faculty and staff entrepreneurship and innovation to start companies secure capital, create jobs, experiential learning opportunities for students, and grow revenue. And, and just this past year, we changed, we have a new president, we have a new provost, we have a new vice president of research, we have a new strategic plan and new strategic plan was just launched like two weeks ago. And so I took our strategy, and I mapped it to, and I mapped it to the university strategy. And the university strategy was like four themes, and three objects or three goals under each theme. So 12 total possible bullet points, and each of my each of our objectives hit at least three of those, except for generate revenue. So, so I just met with VPR for it for the very first time. And then showed him this market mapping exercise and how we were aligned with universities mentioned. And he said, you know, Canvas is great entrepreneurship, experiential learning opportunities. But you know, you really have to bring in revenue. So there's the tension we all spent we all face and that's the tension with the express terms. And ours aren't as generous as or favorable is, from an entrepreneurs point of view as as, as you can see, certainly, and depending on how you look at it, maybe not Carnegie Mellon, either. So we have, maybe we have the revenue mix a little bit high. Still, I think we're in general, on the low side of fair, Calgary, we're definitely deeply deeply discounted, we're kind of on the low side of fear now. And a College Park, we don't have a medical school. So only a few of our teal deals are biotech. And we have to make, and we have one set of terms, but still, you know, we have medical devices, we have lots of engineering stuff, we have software, all kinds of different sowed lots of different sectors, that one set of terms has to hit and and so we're not so dogmatic about its Take it or leave it. We're willing to negotiate whether we have a success fee in this model was negotiate assess the success fee or the royalty rate, if we exchanged it for something else. And so we do want to keep high on our list of priorities, being fair to all faculty. And so we say that these numbers don't have to be exactly the same thing deal to deal, but the overall value of the package needs to be similar. And so that's what we strive for. And so here they are. And just like I built our model on the back of UMCS Express model, I built the slide on Kelly's. So Thanks, Kelly. So on the left is the regular the regular term so 6% founder shares fully diluted will the exit fee, which we call a success fee is 1.5%. And again to back load we you know, as we're saying that this is low side affair, we want it very back loaded so you don't take cash out of a startup. So we should all remember that In addition to equity successively, yes, yes, royalties, 3%. But there's a royalty holiday until 3 million. And actually it's in cumulative sales. We started out with annual sales, but change the cumulative sales. And so the thought there is that a royalty out of a startup is never going to move the needle on our revenue. But if it if it sort of gets sold, and that that's when that royalty is going to come into play financially, so, so don't take money out of a startup, if you don't, if you can, sub licensing fee 20% of non royalty consideration, so that three percents a pass through for the for the sublicensees. And then like ABS Franssen, milestones from from sublicensee was 20%. Pre emptive. Right? Yes, so we work with those age and and hope to have our own funds to invest one day to co invest as as financing rounds, mature Speaker 8 45:54 maintenance fees, no. Milestone fees, no patent cost. So here is one thing, red flag red flag patent costs that, that Kathy warned me about, and which Thank you, Kathy. So you're the if you have a if you have a grace period for a return of patent costs, and that startup wants to file and everything. And then when the when the when the bill comes through, they go out of business, and you're left holding the bag. And in fact, so we have 45 active startups, and we're holding about a million dollars and investment for them. And we only have a million dollar patent budget. So about a full years is invested in our startup right now. And so we did kind of a hybrid approach. And so pass patent costs at Calgary, you know, for the bottom bargain basement terms, we expected full reimbursement on day one. And then since this assignment, that startup company has all the ongoing costs. In Maryland, we don't expect the patent to pass patent costs for three years. So we got a three year grace period. But during the grace period, we'll pay for the US rights, but any foreign rights, the startup has to pay. And that's been really helpful. Because you know how expensive the foreign rights are, and especially if you're using someone else's credit card. So that's pretty much the the model, and how it has, how it is played out. Since we've since we don't, we don't? Well, before I say before talking about the numbers anymore. So it's an express license, you know, this is one page out of a 20 page or 25 page document, the rest of the license. So we were really careful to put the term all of the other all of the legal terms to what we really needed. And again, since we do negotiate this license, we've found to have just been bimodal. Some people accept it. So maybe half of the folks accept it as is and sign it the other half cent higher their per hour lawyer and and we get a heavily red line, or we can get ahead if we get a red light draft back. And six months later, we go all the way around, and we end up where we started. Because what's in the license is what we need. And you know, we've only been doing this for 18 months. And so as we get more confident in those terms, that's exactly what we tell people now. And so that's that's helped. It's helped shorten those, those protracted negotiations. And in fact, somebody when, when they're asked me why I was doing this, I'm saying I want to get out of the negotiation business. And I really do because that's, you know, time consuming, and also relationship consuming process. So the things that don't fit. So if you look at the royalty, so 3%. So that's tremendously discounted if your software, but then the 6% equity, you know, there's not very capital intensive so that 6% holds up. If you're biotech 6% goes away immediately. As it gets diluted, the 3% royalty is kind of low to fair, but the success fee holds up for biotech. And so it fits pretty well and family feel to have one set of terms that fits pretty well with a variety of sectors. So that's where we are. And so for negotiation, what it doesn't fit as if it's a commodity. And so we have a lot of engineering technology, and like I'm working on a license right now, where they're selling into the OEM auto market, and that's really low margin. And so I have to be cognizant of that with a 3% royalty won't fit there, because there's only a 3% royalty to start with. And so can reduce that without changing things. But then maybe they want a reduction in the sub license fee just to help the company get going. Because we we don't put a grace period on the sub license fee. But you know, in the interest of keeping the cash in the company, maybe we trade a lower sub license for anti dilution and the in the equity or maybe a save will issue is safe. And so you know, all things are available as long as the valuable value is similar. And we have used this similar, similar approach for copyright and the terms are practically the same except of course there's no because there are no hidden fees. And then for the open source we have, we have executed the open source twice. And we use the Berkeley model as well. And we call Berkeley and they helped us set it up. So that's where we are. Yes. Questions? Speaker 9 50:16 Can you just talk about the mechanics of the open source? Do you prohibit your faculty from releasing open source and tell them? No, no, you Speaker 8 50:23 see, I did put what we get public, when we give free and exchange for 3% equity. We acknowledged the university's role, the university's willingness for open source release, and the university statement that the company is in good standing. Speaker 9 50:35 I guess what I'm saying is if if it's been released, open source, why would they do that? Speaker 8 50:40 That's why so that's why so some companies want that release. Speaker 10 50:45 So I find the royalty holiday really interesting. So many of our inventors are graduate students. So how did you socialize this with CO inventors who are not faculty, and who are not probably holding founder shares, etc? I can, you know, I look at my policy, I can see real pushback and problems down the road by giving, you know, a startup, the ability to go royalty free. And I don't know very many of you guys, but our I don't know any of our startups that have done 3 million annual sales, but Speaker 8 51:27 Right, well, so I haven't had any pushback from that. And what I'd say is you don't take money out of a startup. And, you know, the value of the royalty is for the downstream when the company gets bought, then the royalty becomes significant. And that's when that's when the royalties are paid off. Speaker 10 51:42 Yeah, but royalties are on sales. I mean, they're making sales. And for me, when I look at any of our, our financial deals, I'm here at we're not happy, but I will work with them on minimum manuals, etc. But once they're start selling, then that's a different, you know, animal for me. So I find that interesting. Speaker 8 52:03 Well, you know, it's all of these are compromised. So one tire went slower. So the road holidays a really good deal. Yeah, so Speaker 6 52:11 I assume you to chime in here, I, I've actually found less issue with that. As much as just the lower up fronts, lack of milestone fees, etc. And frankly, where I've seen that situation come into play is when there are multiple faculty on an invention, and only a portion of them are actually going to be founders. And so this is where I think once again, kind of that relational aspect of tech transfer is critical. Because typically what I'm doing is talking to the key inventors and faculty associated with technology. And if one of them isn't a founder, and voices displeasure with this model, we just say that directly to everybody involved, say, Look, you know, here's an individual who's not at the table as a founder in the company. So therefore, they're not happy with this. And we have to respect that under our discretion of whether or not to use the license. I will tell you, I've had two outcomes. I have had situations where we negotiate a standard license. I had also had situations where the faculty member says, Well, maybe you're not such an ugly founder. Why don't you come on board with us to start the company? So I think those kinds of conversations are important in managing expectations. Speaker 11 53:25 A faculty member is satisfied, right? Yeah. Speaker 3 53:30 Yeah, one second. Before I go on, I forgot something, which I should have said to you earlier, which is at the conclusion, please go to your audible connect to complete the session evaluation. That's important for autumn, select agendas, to find the session and read the speakers and provide your feedback that again, it's very important for them. Now being the moderator, I have to ask the questions first. I'm sorry. I will ask very simple questions. So it won't be going on for too long. So one question that I had, which I cannot tie to your interest is who handles your equity? The three of you I mean, anyone can talk about that? Is that any equity manager or anyone? Speaker 8 54:22 Nigel, we hold our own equity. We do have Nigel, Nigel long and Trade Street partners provided advice to us. They're hired not by us but by the CFO. And Nigel's been invaluable to us. Like when we get a shareholder agreement, it goes to the bottom of my desk because I don't want to read it. But I do reads it for me every time and provides great advice. And and it's well we have a brokerage company we know shares, and they're not all just in a desk drawer somewhere. Speaker 3 54:52 Now Julie, want to say just a cute few words of what you've what you provide to the university. Sure Speaker 4 54:56 we have a system I can name Nigel Long Trade Street advisors. So we've been engaged by the University of Maryland. Yes, it's been almost three years about two and a half years ago to assist them with centrally managing their portfolio of investments in private companies. And what we found is quite a few might be saying it was, it was really an experience to help put that portfolio together to organize it, to get all the information in one place. But it's, it's been an interesting experience, I think it's been of value to the university. So the things that we do include negotiating the equity deals up front, man managing the equity along the way, reporting on the valuation of the company progress of the companies, providing some input on some of the policies. So for instance, one of the things and I don't know if you guys spent a lot of time thinking about this, a big challenge that we found when we took on the assignment was just information, just access to information from somebody's company. So we really wanted things we push for just information rights early in the process. Eventually, if the company makes a deceit or Series A, you know, the university will get that those rights. But between that period of time, there just needs to be more access to information. tagalong or CO investment rights are something that we really tried to push for. This increases the opportunity for the university to participate in secondary offerings and sales. And so, you know, I didn't expect to speak but thank you. Speaker 3 56:35 You can never trust the moderator, your neck and pick on anyone I want you. It's a place of power. Speaker 8 56:41 Thank thanks so much. Well, I will say that when I was in Calgary, we had an external investment committees made made up of local local VCs and find other financiers. And we'd meet quarterly, and update the information on our company on our portfolio companies quarterly. And we have one FTE that we devoted to gathering that information for us. Speaker 6 57:08 So for for UNC, under state and university policies, we have a foundation that has to hold our equity. So, you know, certainly, I don't necessarily push our Express licenses on figs as much as it's once again, kind of knowing what your own situation is. So that was part of the reason we started with an exit fee. And now even still, we have an exit fee that converts to equity, is that dealing with the foundation on our equity is challenging, on a lot of different levels. Right now we have a scenario where we have a lot of equity in a holding company that has a number of fully owned subs. Without question, the subs are very valuable, the holding company is right now worthless. And we're having to move heaven or earth to convince the foundation of arguments why they would take an opportunity to sell equity in the holding company and take it in the subs. So it has been quite Jack challenging. I will say that Bob shared with us, I don't know if you're familiar with this chair. But that's kind of analysis of some of the strategies that you could take with equity. And I thought that was really quite good. Because, you know, the point I think that he made, which was, which was very valid is look, you know, you could ideally just time the market, right? You can watch but who is that person? Maybe it's Nigel, I don't know, I need really to talk to you. You know, who are you going to have that's going to do a good job of that and actively watch the market and time it. And then there was another proposal that he had basically said, where the the equity have sold off in chunks over what 18 months, Speaker 2 58:40 it was either eight or 12 months, but then he ended up. So to answer your question. And thank you for answering. For me. We it's between SeaTac and our investment department internally in CMU. And then if it is to hire some external company in order to continue what we decided we'll do so. And we just went through Duolingo with this exercise. And Bob Bob, who is the vice president of the tech transfer office at Carnegie Mellon has done and I don't think that the slide is there, which regarding the matrix, and that isn't Speaker 3 59:22 the last slide. It is and we may I still probably the one with the matrix, right? Thank Unknown Speaker 59:27 you. Yes, yeah, I Unknown Speaker 59:29 just think you just go back. You want to use your computer to try to open I don't know if I just put that slide in yesterday. Speaker 2 59:42 So you wouldn't be at the end. So basically, what he did is a study of what is the best case scenario for us. And it was this was, that's the one Unknown Speaker 59:51 Yeah. Speaker 2 59:56 So he went through all the scenarios and then We ended up deciding along with or suggesting to the president's office investment department that the timing schedule is best for us. And it was either over eight or 12 quarters, but for our books age was the best. So we went with that. Yeah, and then I'll just leave you with. It has enough details. It's self explanatory. So that's what we did in order to handle Speaker 8 1:00:32 Calgary, we made the decision, our our investment committee made decision for us, they were always wrong. But that we were a private company, and we didn't distribute anything. And so we didn't have we didn't have the, we didn't have the risk of making a bad decision for our inventors or other stakeholders. All of those proceeds were ours. Unknown Speaker 1:00:55 One more question. And I swear I'll get off the stage. Speaker 12 1:00:56 Okay. Brian Wright with Auburn University we've recently implemented and I can't, we haven't done long enough to point to success as we've switched to warrants. The idea being that, you know, we don't actually hold equity unless there's a exit a liquidation event. And then it converts and sells all at the same time. And we're so we're just getting out of the business of management and shareholder agreements, and voting and all of that. And we keep and we asked for observer rights on board meetings. Unknown Speaker 1:01:23 Do you have any experience with that? Is there a warning sign? You want to hold up for me to have a stop doing it before we do it long term? Speaker 6 1:01:32 We haven't tried it. So I would love to hear how it goes for you. Because maybe I want to maybe I want to go to that as my next move. Okay. Speaker 8 1:01:39 We did that in Colorado. It's very great, gratifying, but also very time consuming. You have to go to board meetings. Oh, that's separate. I mean, well, I thought that was the question. I thought that was the question. Oh, sorry. Yeah. Speaker 3 1:01:55 This is actually going to be my next question with talking about warrants. Have you used convertible road notes, warrants or safes in a startup license? And do investors like one versus the other? I think early on father had talked about the warrants several of us them, I'm going to voice Speaker 2 1:02:14 Bob's input, would you use warrants and according to his research, very meticulous research, the investors really like warrants because we speak the same language versus the anti dilution clause. We do not use safes. But the the way we work in Carnegie Mellon, anything that is CMU intellectual property, we handle we manage at the tech transfer office. If we do an analysis, and it's not CMU, IP, it's a student related. They own their own IP or faculty member where we waive the we don't have any rights in there. It's handled, but we call Schwartz Center and our Schwartz center who is also incubating us safes as well. So yes, we do not use safes with faculty IP or CMU IP, but then the Schwartz center does. Speaker 3 1:03:11 Okay, great. The questions? Yes, please. Speaker 13 1:03:21 I just wondered if you guys had any performance expectations of your startup licenses, so they don't become zombie companies, and you can't get them out. Speaker 6 1:03:31 So like any company, any license that we do, they have to have due diligence milestones. So that's the one and only thing that we negotiate within our Express license. Interestingly enough, my experience largely, especially in biotech, is that I actually encourage them to push the proposed dates out. So I usually have, you know, overly ambitious founders who will come back with clinical trial dates, and I'm like, Okay, can we let's chat about reality. Right. And frankly, I would say that, for me, that's also another warning sign of whether or not we need to pump the brakes on the company, right? So if they come back with dates that are like, okay, like, that would be great. But let's talk about reality. That's one thing. When they come back with dates from like, clearly, you're high on something when you wrote, then it's like, well, maybe you're not ready to start this company, because you don't even understand the market or you don't understand what's required to get an IND approved or something like that. Right. And so then we'll say, Okay, let's hold off. Let's get let's help educate you on this. So that is a tool that we actually use to kind of decide whether it's a go no go to as well. Speaker 2 1:04:41 Thank you for saying that about the HI. Whenever we reviewed the milestones, you could tell that somebody actually spent time on the business side rather than just the research and then sign and go and then yes, that is a red flag in order to go with them through everything. And that's why we don't ask for a business plan from day one, we let them simmer the business plan, there is a back and forth there isn't the entrepreneur in residence in order to help. And quite frankly, what if anybody's going to initiate the milestones as a first timer, there is somebody who needs to be on top of the milestones along with the entrepreneur. Otherwise, if they do, they're, they're not my experience, they're not on top of their milestones, they need a little nudge in our licenses, we do not tell them that we're going to send you an email to return the milestone you have to be, you have to be proactive, but then we find ourselves looking for back to for our startup, if it's a first timer. Now, if it's a seasoned person, that's another story. They are on top of things, they we we work in agreement, but and even so there needs to be a little nudge soldiers a lot of compliance efforts to be put towards the milestones, Speaker 6 1:06:05 I would add to that. Always sit down with first time entrepreneurs and first time management. And I talked to them about this due diligence milestones and what the expectation is, right? So what I conveyed to them is I said, Look, if you know I'm hearing from you, and as you hit obstacles, you're communicating with our office, and we understand what's going on. And here's where you are in raising your round. Or here's where you are in kind of technical development, and you hit a snag, we're gonna work with you. If you go into complete, utter silence, and then you call me out of the blue in two years, and you want me to renegotiate your due diligence milestones and you want a patent payment plan, I'm probably gonna laugh at you, right. And so I found that does help. And just having that kind of set baseline conversation, because I do find that the startup companies become very just communicated with us letting us know what's going on, here's kind of our issue, or here's our win. And then we build on that. So the only warning on that is I do have one CEO that calls me weekly, because he says he does not want me to like you really don't have to call me. I found that to be helpful as well. Speaker 7 1:07:21 Building on Kelly's point, to for Kevin photo, do you guys have reporting? Actually, I can't remember the Express license either. Do you guys have regular reports as a part of the Express license? Obviously, it's not a financial terms that would be up here? Yes, yes. Yes, we do. And secondly, if I may do that, do you see a difference between a sort of an even mix or a slant one way or the other on? Inventor only founding company, IT vendor only companies like where they're so early, they don't have people on the outside. And then inventor Plus Local VC firm and business executive, right? Because these are both would might be eligible here. For those. I wonder if you saw more of one than the other. Speaker 8 1:08:06 We require a business lead, we don't negotiate with our faculty. Speaker 6 1:08:11 We do not require as a slave, but I 100% I'm happier when the faculty member walks in with the business lead, getting the same numbers. I would say that fortunately, we're seeing an increase in the number of folks who are getting kind of matched up with management early on. But you know, I would say it's always good, you know, sometimes it's good, your problems are changing. So I'd say you know, 10 years ago, we always been there and in our area that there weren't a VCs, you know, there's no money. Well, now VCs will happily come to our area and invest, that's becoming less of a problem. We still do have a drought with management. And so you know, frankly, it's another topic, but I'm hoping in a virtual world that I can tap More into kind of some of the management talent in the northeast and elsewhere, because that's the one thing we think we still desperately need more of. Speaker 8 1:09:01 We're really fortunate in Maryland, we have a group called TEDCO. That's financed by the government that it's like a pre SBIR two rounds of your phase one. And actually phase three, they skip phase two of 100,000 $150,000 with a 50% success rate, and they require business. They require a business partner and so by the year, that's the first thing that new companies do and by the time to get ready for the license, they have that person. CMU Speaker 2 1:09:28 does not require the business lead but we would be happy if actually it's kind of the BI would come with the business lead. Having said that when we know our faculty and we know their flavors and and we do go through whoever is interested in a startup, the one of my first meetings would include the entrepreneur in residence, who would walk them through, okay, here is this. This is my experience. This is the experience is this what you would like to do and Do we know of these people? Would you like to talk? Speaker 3 1:10:05 So I have a question. How would you lead to another question? How do you all pick winners and winners and losers? I love asking this question because nobody has an answer to it. Speaker 6 1:10:16 Well, I always say, who says they know how to pick a winner is lying through their teeth? Right? Because we've all I mean, I don't know, maybe one of you out there, and I love to talk to you, um, I love to hire you. You know, I think we've all seen things that we think are slam dunks, and they fall miserably on their face and things that we think there's not a prayer. And somehow that ends up being a big win. Right. And so I just think they're just too many variables. And in fact, that was part of the thought behind the Express license was, let's take more shots on goal. Right, let's get companies out there and let the market and the science that come out, right, because that's the true test. I think the where there is a danger is I know that we went through a period of time, which I think was kind of a necessary evil, where really, the university wide support for entrepreneurship was growing. And so there was this push of like our faculty X, once a company, they get a company, right? Even if all of us in the tech transfer office, we're like all the red flags, right? All the warning bells, this is a horrible idea. And, you know, we watched enough of those situations. Turns out that at least now there is it's more of a balance of, you know, more companies is not better, more good companies were strong companies are better. And so that kind of comes back to this, you know, business plan, application and growth of let's just make sure that you're actually ready to launch. If you're not, let's help you get ready to launch. So yeah, that would be my answer to that question. Speaker 2 1:11:49 Great. So yeah, we the first model that I showed you, the pilot, when we rolled out the first year, they weren't picking winners. So you would they would the SeaTac, that tech transfer, then at CMU would take 80 dockets or disclosures, they will take one or two and work on them. And they got lucky and we got like costs and it went public. Right. But then the other, what would you tell the other faculty members? No, you're we're not going to work with you. The idea is not going to be there. If we did that, and we can tune with it with that Duolingo would maybe not be like Luis Vaughn would go by himself. Why? Because he started with reCAPTCHA. And we wouldn't take recherchez the winner, maybe. So he's second one came, then he's third one is the one that went IPO, we would have missed it completely for taking winners and losers. So we consider anybody even psychology department is the same as robotics department, every for every disclosure is treated the same equally. We talk and we give the time equally to any faculty member. They love it. We love them. We are allies, there is no distinction between I think, and who am I to think because the market really fluctuates one way to think and say, I see it, this is going to happen. And then sometimes it even depends on the personality of the pie himself, pushing this to markets and believing and pivoting and being all about what the general today told us. You go there and be flexible. And so I can't really guarantee the personality of the pie who's taking this and running with it. We don't take winners we don't take we don't call them losers, we don't call them winners. If we feel that there are red flags, we are there to help. And even so we don't know where it's gonna go. We just apply them at the Speaker 3 1:13:55 end of the day. So what have you noticed and I think some of you address this in your presentations. But what have you noticed are continual challenges not addressed by your Express license? So you know, it's an express license and you're saying, gee, I miss something. Maybe I should have put that in or, you know, am I missing something here? Like as compared to any other licenses that you've done? Any challenges you see? Speaker 6 1:14:26 Ours just doesn't fit software? Well, so that's why that's why we're going back to okay think about maybe stealing something from you guys or something. I don't know how to set something up that works better for that. Speaker 2 1:14:37 I can't think of any like major challenge chat. Yes. Unknown Speaker 1:14:42 No major challenges people accept it. Do we have? Speaker 8 1:14:45 I think any spam costs if anything, people companies pay us last. And when they end when there is three years since the last time they owed us anything. They really don't want to pay us Do I need to hire someone to go out and be stern? Because you know, I call up or my our financial person calls up and say, oh, can we'll, you know, we'll get back to you. And they don't. And so again, it goes back to the administration. So the administration has to tell us, how important is revenue to our model? Speaker 3 1:15:22 Did your administration have any goals for you, when you when you started the Express licenses? Or when you put them for the the expected to do a lot of them? And I guess, being a state institution? Was there an idea in there that gee, if you do more of these Express licenses, but startups will have job developing more economic development? So was that ever a part of you know, doing the doing the license or drafting the license? Speaker 6 1:15:53 I will say so I'll kind of echo an earlier session I witnessed earlier on talking about kind of, was, How to Train Your Dragon, I think fully. And so that was the issue we had initially is that, you know, you'd have the companies who were behind on due diligence, they weren't making their patent, they weren't paying their patent cost and the weeds hold their feet to the fire. And then they call it administration. And we'd all get called to the you know, the big office, and then the person in charge with path, a faculty member in the back and say, It's okay, we'll make it go away. Right. What meanwhile, it's just it wasn't comfortable way. But you know, over time with communication, and now everyone's kind of bought in to the fact that the who has to make the decisions, so yeah, so that's Speaker 14 1:16:39 good. Thank you. Yes, I think at least two of you mentioned that you would negotiate with a faculty member. And I'm just wondering, does the Express license somehow make it more palatable? Because I just look at that as the conflict of interest from the faculty members? Huge, we wouldn't be allowed to do that. And but I suppose if it's an exclusive license, and it's the same for everybody, is that how you guys suit Speaker 6 1:17:04 by justify it? Yeah, so there is no negotiation. So that's what makes it easier from a conflict of interest. I would say that our conflict of interest office is very, very conservative. And they actually prefer this because the faculty member can't weigh in on the terms they just are. They're just basically so Speaker 14 1:17:21 I was gonna say, do they are they not allowed to do that? If they don't take the exclusive license or stress? They Speaker 6 1:17:27 have to pick a side depth accent? Yeah. Speaker 3 1:17:33 Well, I think Is it close to we have a few more minutes left. So any other questions? Yes, please. Speaker 15 1:17:44 I was wondering if you could talk a little bit about the structure of your office so that like it, you see, we have tech transfer. And so that's me, and we deal with negotiating the license. And then we have a Venture Lab with the three accelerator accelerator program. So and what are your strategies as far as making sure that communication between those two groups Unknown Speaker 1:18:09 submit that for next autumn, that's a whole nother. Speaker 8 1:18:17 So we have about 15 years well, about 20 people, including the part time people in week two, we have an admin group for a compliance and stuff like that. We have an IP group follow patterns, licensing group that kind of does everything. And we have a startup group and startup group is one FTE plus seven or eight for part time people, ers or site miners. And so that's, those are the folks that helped take care of applications. And I will say that since COVID, we have check ins amongst amongst all the licensing and startup people Monday through Thursday, and the communication has improved tremendously. Speaker 2 1:18:55 We are a small office and my conclusion from attending any autumn is that we're all understaffed. So, so in addition to our VP who spent 20 plus years in the, in CMU, and in the industry, we have, which is very helpful, which is hired and Associate Director of IP. Our licensing managers, we have six licensing managers, I think 1233 of which are patent attorneys. So the rest of us goes to the associate director of the IP in order to discuss her IP and the laws and patents etc. And then we have two administrators, one person who is mentor in resident who's to be a patent attorney, and then progress. He's very good at networking. So he's mentor residents and he's the startup person and then two database managers. It's, it's it's very challenging all the time. Speaker 6 1:20:04 So I'll start by just making a shameless plug of, I am getting ready to hire, or sports to be on the lookout as to here, it's a great time to be looking for a job in tech transfer, that's for sure everyone's looking everybody's looking and there's not enough people, especially if you can pick winners and losers, definitely. So I think to answer your question, and kind of the evolution that we've been through is that we have our tech transfer group, that we have a group called kickstart venture services, which is there to provide support services, they run our accelerator lab space. And originally, they actually respond out under our School of Medicine said even report up to the same lines as us. Their metric was to start companies, right, they had no accountability for patent cause, I mean, they had accountability for nothing other than start company. And if you just imagine what that look like, you get a pretty good picture. Right? Now they're under the same organization umbrella with us, which is, I mean, that was a tremendous move forward, to get it more cohesive. That being said, there's still come at natural push and pull that, you know, when a family member comes to them and says, I want to start a company, they want to be supportive. And I have had a faculty member call me the devil on the shoulder because, like, you know, okay, let's, let's slow down a little bit. Because I find that especially, you know, we have a lot of grad students and postdocs who want to start companies, and that's great, and even faculty, but they don't fully understand what they're getting ready to commit to. And so, you know, I tried to provide the voice of reason of, this is a second job, here are the things that you're going to have to do. If you really want to do this, we'll support you, but let's think twice about it. But the we do have regular standing meetings with our team and the kickstart team to try to make sure that we kind of know who each other are talking to because faculty do form shop, I think you've met them, right? If you don't get an answer, like one person, they'll go somewhere else. So we try to keep that dialogue between our groups. Speaker 3 1:22:04 So I think last and final question, lessons learned by the whole by the whole experience of doing Express licenses, some wisdom, you are now empowered to our wonderful audience Speaker 8 1:22:17 can evolve just like ours is evolving. Caroline's evolving, current balances evolved and evolves to, to fit the time and the place. Speaker 6 1:22:31 Yeah, I mean, in our universities evolved to right. So that's kind of my point. You know, markets evolve, universities evolve. So for us, something that we're trying to put into place now, I mentioned, was a kind of preset policy on how we're going to continue to reassess so that folks don't think that now it's in print, that's going to be available to them the same way, five or 10 years from now. So I do advise people that when you roll it out that you also roll out your structure for how you're going to continue to reevaluate and basically evolve it over time. Speaker 2 1:23:02 I think it's very important for the entire university to work as one unit. So if he Dex has non negotiable, and somebody goes to another source, it's non negotiable. To move to move things ahead. Speaker 3 1:23:20 Well, if there are no more questions, thank you all for coming. And hope to see you all soon. Hope our paths cross again. And thank you to my distinguished panel for doing a wonderful job. Speaker 1 1:23:39 Hello, everyone, thank you so much for submitting your questions throughout that presentation. panelists. Thank you for joining us, once again, to kind of do some follow up questions. We have a lot of submitted questions that have come through which is excellent. There was one or two questions that came through the chat that I saw some answers go to panelists. So I'm just going to read those out. And then I'm going to post the answer into the chat so that you everyone can see those. So the first question was for Carnegie for licenses, which include both patents and related software? Is the patent license enough? Or do the startups also need to get the software copyright license? So I'm going to post reads detailed answer into the chat so that everyone can see that? And then, while you're reading that one, our other question came through was for Ken, Ken, I know you typed in an answer, but I'm gonna just see this one. So it said is the exit fee in addition to the equity or in place of how is it structured and Ken's reply was that it is in addition to structured similarly to UNC change of control fee, so I just wanted to make sure that all attendees saw those questions and answers before we got to the other submitted questions. Okay, so with that, I'm just going to go down the list and or Under for the submitted q&a, I'll read the question out for all of our attendees and panelists feel free to jump in and answer as you would like. So our first question was, do any of your programs have a requirement to utilize other university programs or resources, for example, Ichor, in order to access the Express license? Speaker 3 1:25:21 Well, in some cases, we do encourage our faculty members to go ahead and do the ICORE program, or there have been situations where you know, people don't do the ICAR. But the, you know, the, the feeling is to encourage them, because many times faculties, faculty members have no idea but the market or the business. So if they do the ICORE program, they get a sense of, you know, who will buy the technology? Is there a market for it? So it's a good thing to have in the university? Speaker 6 1:25:58 Yeah, so the short answer is no, we don't require them to utilize any other particular resource. Certainly, we try to pair them. So if we, you know, meet the founders think about the technology, and we see if they're a good fit with resources, we help pair them up. But they certainly aren't obligated to go through any of them. Unknown Speaker 1:26:19 Same answer for Carnegie Mellon. Speaker 1 1:26:21 Excellent. Kennedy things Adams already paid me cover the UN. Speaker 16 1:26:25 portion. No, no, they had me covered it. Well. Perfect. Speaker 1 1:26:29 All righty. Our next question, for those that do board observer board member requirements, when do these expire? Based on a certain time or a certain milestone? Speaker 6 1:26:46 We don't sit on the board. So I don't have any. We don't either. Speaker 1 1:26:52 Same across the board. Perfect. Next question. How do you all discourage a faculty startup when you think they're not ready? Having those difficult conversations? Speaker 3 1:27:06 Well, it's not an easy one, because many of the technologies that universities are so early and you know, invest in faculty members think there's a huge market for their idea, they may find a target and small cell lung carcinoma or something and the thing they can cure small cell, but you know, that's so in answer to your question. You know, others piping Of course, we try and tell them these things. We have an entrepreneur in residence, we have mentors who try and help faculty members understand what it takes in the commercialization process. The other thing we can do is we try and license the technology out. And if we get a lot of licenses or licenses, we tell the faculty member, Hey, your technology is so good. So many people are licensing it, do you really want to do a startup? Because during a startup takes a lot, and the main faculty member may be too interested in his work or her work, and maybe a student to some beers may decide to take it over? So in answer to your question, those questions are hard. If you can prove to them that there's a market for it, that helps. And, you know, the entrepreneurs and mentors out because they had business experience and starting companies and selling them, etc. Speaker 16 1:28:27 I'll add a little bit there, hey, you mentioned TEDCO mi program. And so that's often the first money into into startups to $100,000 was first phase 150 for the second. And we have we have part time, they're like entrepreneurs and residents that help the faculty prepare those applications. And so during that, during that application process and the feedback we get from Maryland, I mean from TEDCO the ones that are too early, don't get the money and and so it's a good checkpoint and the development of companies often to the first money in but if a company is not ready, they're gonna get the first money and until they already Speaker 6 1:29:16 Yeah, and I guess it added a couple of things. I mean, one is really early on that it happens to be relevant a majority of the time is the very often we see whether it be a faculty member or postdoc member who's gung ho about starting a company and I think this is going to be rough. So by asking, why, why are you so excited about startup here? Why is it something you want to do? And I've had a lot of conversations that without me even saying much, they've talked themselves out of it, right? Oh, like they were just put so much fun and, and then you can see him go like, Oh, this is a lot of work and you kind of see them like self digest or this process of like, oh, maybe it sounded better than it really is gonna be Right. And so there's that kind of first layer that says a second, I use a lot of parenting analogies when it comes to tech transfer and startups. And I think the other is that I feel it's like kind of like mom's syndrome, right? Like, you know, telling your teenager something, they're never gonna listen to me. You know, I'm stupid mom. And so the best way I find to help them is to match them up with experts, right, whether that be entrepreneurs, whether it be contacts at companies, who would eventually be their strategics. And then when they point out holes, they listen. Right? So I just try to be a conduit for that information. And that, you know, sometimes it's not, no, it's just to kind of help something and what do I have to do to get this ready to go? Speaker 17 1:30:43 I'll just echo those same things. We don't see ourselves as a gatekeeper where we're the one saying no, we'd like to make introductions other people and have them give the voice reality. But also, we have a very close working relationship with our faculty generally. I'm now the startup mentor within the office, but I've been the licensing manager before that. So I've been at CMU for 16 years, I know a lot of the faculty and like, we trust each other, we have a good working relationship. So a lot of times this conversation starts with like, who's going to be in the company? Is that going to be used the faculty member? Do you have any student who's ready to move into the company? Like, quickly, they realize like, No, I'm not moving into company. My students aren't interested. It's like, what are we talking about that? Speaker 1 1:31:35 Thank you, I know those conversations can be challenging. That's all really good insight. The next question we have submitted is what further suggestions or comments do you have for an office who is thinking of developing and implementing an express license? Speaker 1 1:31:57 Not a session of ground but any other? Yeah. Speaker 17 1:32:02 I wasn't at CMU when our startup play or express license was developed. But we got input from lots of different stakeholders, both inside university, you know, do you already have faculty members who've done startups before? Talk to them? Do you have investors that work a lot with your companies, talk to them, you have lawyers that work a lot with your startups, talk to them, and make sure your senior administration is bought in and got to back you up? When you're telling people this is the deal? Speaker 1 1:32:39 Great, let's keep rolling through cuz I know we have a lot of questions that are coming through the next one for each of you. Where does your new ventures Office Live in the university or system org chart under VPR? The president's office externally or somewhere else? Speaker 6 1:33:01 I'll go ahead and just keep your Yeah, I think I addressed this in the original talk that our kickstart venture office used to sit within the School of Medicine was not under our same unit. That was a hot mess for all the reasons that you could anticipate. So now we are under a separate unit. We report up to the chancellor as a special unit for innovation, entrepreneurship and economic development. So we're all together under the same umbrella now. Speaker 17 1:33:30 at CMU, the enterprise creation or the entrepreneurial Support Center, is separate from the tech transfer office. But as I'm in the tech transfer offices, I'm sort of the bridge between the two sort of operationally. So we have a separate Sports Center for Entrepreneurship. They have the EIR, they have the ICORE program, they have some funding programs, they have a pitch competition, they have an accelerator, and I'm sort of the bridge for the ones where CMU owns the IP, but the Entrepreneurship Center works with everybody undergraduate masters, students, alums, so on where we don't own IP. And we all report up through the vice president of research. Speaker 3 1:34:12 I think same thing at the University of Maryland, we have the VPR we eventually all the Department of Reacher's research we all report to but what is really interesting about the unit versity is we have a group which helps faculty members to startups and look for funding outside the university or maybe inside the university. So that group is headed by Allah, and it's run pretty well. Working in different universities. This is one really good thing I see at at the university is that there's a whole separate center just for startups, and and you know, finding money and funds for the startups. And we have a technology ventures office. We have about 15 people or so, in that office. They do all the technology licensing, marketing and, and all of that, which is a classic licensing person's job. Speaker 1 1:35:10 Okay, the next one I see here is how do you handle faculty founder consulting agreements? Do you allow non compete terms and use? Speaker 17 1:35:26 Maybe go ahead, I don't really have a good answer. I'm not personally involved in consulting agreements. So Speaker 6 1:35:35 there would be an ideal, and then there's where we're at. So we would really love for there to be a mechanism, because frankly, we have a lot of faculty that want the university to weigh in on their consulting rooms, they want to do the right thing, right. And the the majority of faculty really are trying to be good citizens, right. But, you know, our Counsel's Office is burdened, and all those other things. And so a lot of, you know, there's some hesitancy to provide kind of just oversight for all the consulting agreements on campus. So what our office did to kind of lend them a hand is we've basically drafted a clause for them, that they can tack on to the end of every consulting agreement, they sign that says, you know, basically anything under their employment policy for you, and C, Trumps anything in the consulting agreement, regarding IP, etc. So it's a nice way for them to feel like they're covered and they're doing the right thing, and that we can kind of get at them. It's not a perfect solution, but it works most of the time. For the non compete. You know, under those policies and guidelines, there's no claw through to non compete within the research within the institution. But I was in more than ever, over the last couple of years, I am seeing issues with faculty hitting non competes in regard to the fact that they you know, they've left their former venture, the venture is funded on its way. And now they really want to start a new company, and they're stuck up against the non compete for their prior startup. So I think it is something that we probably need to do a better job educating our faculty on and kind of what they're getting into and what the expectations are for this type of relationships. Speaker 16 1:37:15 We don't review the provisions of consulting agreements, but any consulting agreement with our faculty, founder of a startup would be subject to a conflict of interest and have to be disclosed our conflict of interest committee. Speaker 1 1:37:29 Great, thank you both. Alright, it looks like the last question that I see submitted so far. So attendees, if there's any other burning questions, feel free to submit those now. The last one I have here is what sort of clawbacks do you use for Express license with few payments or requirements for years? Is it more likely that tax we'll get technologies will get stuck in a poor opportunity for an extended period of time. Speaker 16 1:37:56 For us, we have verifiable diligence milestones at all of our contracts and and just like any for any license, if the technology is not being developed, the license can terminate. Speaker 17 1:38:10 We're the same. Although, to be honest, we're not really wanting to be in a position of pulling the rug out from underneath our faculty startups if they're still making progress. So generally, what happens is they're out raising funding, and the investor will say, are you in compliance with your license? And like, no, they're not. So let's amend the let's mend milestones, or they will be in compliance, where we really start to push back as after our three year patent deferral period, if they took that option. When that expires, and we're like, we're holding this this pile of patent expenses for you. It's time to pay up, like, Are you a real business now or not? So that's when we start pushing towards termination. Speaker 6 1:38:52 Yeah, I echo that and then just say a couple of things. So it kind of is common about something being stuck, I would say, actually the opposite. So when we build our due diligence milestones into our license agreement in startups, we do approach those a little differently than if we were licensing something and the Big Pharma, right, because we understand that there's going to be a lot of initial hurdles that they need to overcome to keep moving forward. So typically, we will include a financing milestone, depending on the company, we might include milestones around hiring management or scientific advisory board or something in that regard. And then we're also sure, especially in biotech, we'll build in milestones around some of the early preclinical data that needs to be done. So let's say they need to do X study in a certain animal model. We'll put that in there as a milestone. Now, certainly, to echo read. The last thing we really want is the pulling technologies back. So yeah, you know, a lot of times they're communicating with us and you know, it's science like it usually does takes way longer than you expect it to. We're like, okay, Look, we're just gonna sit on this. And when you get to the point that you're ready to raise funds, and the VCs are going to question your license, we'll do an amendment and update everything. Not a big deal. So yeah, we do that, quite frequently. Speaker 1 1:40:17 antastic? Well, it looks like that is all of the questions that have been. Did I see, I see, actually a couple more sorry about that. We have another couple minutes. So if that's okay, we'll keep going. Do you include rights to improve in the Express license, Speaker 6 1:40:34 they don't improve improvements, don't include improvements. No Speaker 1 1:40:38 read shaking his head as well. Can any difference there? Speaker 16 1:40:42 We we didn't. But we're moving towards towards that. But very, very narrowly defined improvements. So new IP that would be subordinate to the licensed IP, for a fee will be licensed in for a fee. And we did that because we found that when we didn't have the improvement option, that these subordinate patents are coming up, and we've just put it in the company for no fee. So we would like to make it a formal option that they exercise and pay a fee. Speaker 17 1:41:11 But we'll give a more detailed answer now that Ken's prompting me. So we don't give them any automatic right to improvements. But if they come up, as Ken says, was sort of the subordinate inventions within a six month period, we'll just add them into the license as we speak or that than we want to a new license. Speaker 6 1:41:30 Yeah, we typically will do a small thing to add of them. Speaker 1 1:41:37 Okay, and I think this may actually be the last one now. What are you having problem? When you are having problems with your Express licensees? What are those problems? For example, slow on payments, little communication or reports? And then how do you work to resolve them? Speaker 3 1:41:53 I would say all of them. That that could be that's thing, these I've seen cases of being slow on pay, you know, on each of those, but there are some startups will do an excellent job. I wouldn't you know, it's not all startups. But I think what is my view? How do you work to resolve them? I think the biggest thing is the communication with the founder and with the with the management team. Because in that communication, you get to know really well, where they are mean, emails are fine. But this definitely calls for a face to face conversation. But I think we've had problems and all those, all those areas. Speaker 16 1:42:38 I don't think it I don't think those problems are exacerbated by the Express approach. I think they're the same whether it's Express or not. Speaker 6 1:42:45 A couple of strategies that work well in there. administratively burdensome, but they're useful, especially around expenses. So let's say we have a startup company. And we're doing the Express license. And we're hitting national phase by Clemson, right, which we don't cover under our delay. What we do is require prepayment, right? Because it'd be really, really easy to end up with like 5060 $70,000, depending on how aggressive these companies are, and filing fees, and they're like, Oh, I can't pay them. So we actually send them an invoice ahead of time with the estimate, and say, Look, if we receive this money by x date, you know, we'll file your application and as long as the venturi is, if we don't, we're not. We've also had issues with companies that couldn't seem to pay their bills on time. And so what we've had them do is put a deposit down. So we basically said, if you want to keep your license, you put $10,000 or whatever amount you choose, on deposit with our office, and we'll draw it down. And we get, you know, below some, you know, minimum balance, we're gonna come come back and ask you to refill your cup. And so, you know, that has worked well for companies that are moving forward, but just couldn't seem to figure out how to process a payment. Speaker 16 1:44:08 Yeah, so pen costs are really the Achilles heel of the Express approach. And and we started out with a three year holiday for all patent costs, your holiday for past patent cost and ongoing costs for three years. But we stopped that for foreign filings and and so we don't require payment of past patent expenses, that execution and then for that three year pendency of the grace period, the startups responsible for all the foreign costs, and we often require prepayment. Speaker 17 1:44:41 So we're similar on our patent expenses that our deferral option does not include foreign nationalizations. One of the things that we're sort of struggling with philosophically is the unwritten option. agreement in some sense, where faculty members say, Yeah, I'm thinking about a startup like, Okay, we'll go ahead and file a patent application. And then they never get around to doing the startup like we have these patent expenses that are growing. Are you still interested in the startup or not? You said that five years ago, at what point? Do we say we're just gonna go out of licenses to somebody, which in a lot of cases is an idle threat, because the technology can't get licensed? Because it's not further far enough along in development. So we're carrying all these bad expenses? We're reporting to senior management, like, here's this burden of patent expenses that are related to these possible startups. Are you okay with us doing that as sort of a cost of business? Because we have these success stories over here? Or do you want us to like, clamp down on these faculty and say, we're not spending any more money on your pads? Like, what do you want us to do? And we're in transition between different vice president research. So we're raising the issue internally, but we don't have any resolution. Speaker 1 1:46:05 What looks like that is Is there one more? Sorry? Is everyone okay with one more? Yeah. I know, we still have a little time left, how do you manage IP from a terminated startup license? Do you keep it or abandon it? Speaker 6 1:46:21 I think that's dependent on you know, any IP that you're gonna manage as an institution as you're gonna evaluate what that value is. I mean, I will say, though, in the last year, I have relicensed two buckets of IP that came back from startups that folded, right, and they didn't fall because the technology was bound, they folded for other reasons. And, you know, one of them actually was put into a new startup company, and they just closed their series A and are marching along. So, you know, it's certainly not a, you know, if it comes back from a startup, I'm certainly not gonna just throw it straight in the trashcan. Right. I think it's just a reevaluation of where it is, you know, is there any progress? We do require the startups or just existing companies grant back rights to any data that they generate for our technology while they hold the license. So sometimes they do come back with additional validation and data. So yeah, I mean, I think it's just a case by case. Speaker 3 1:47:21 Well, in one case, I'm looking at a joint invention agreement, and the technology has is it was a license and the technology came back and the faculty member and the office said, let's just do a startup. And lo Behold, the startup actually has money right now, to pay for our patent costs, which are a huge problem. And earlier, the points I was raising with regard to little communication, you know, this problem somebody had raised, that we do, I mean, at least I've seen that, in my experience, that those are problems I see in licenses. And at times, and startups, you know, I think the communication could definitely get better. Because many times we don't know what the startup is doing. We have diligence milestones, but you know, you still may miss a few. So that's what I was saying our communication with them is fabulous, because you know, you meet someone in person, I think you can get a lot more accomplished than through events are having. Speaker 6 1:48:20 This has really resonated with people. I think I joked about this in the presentation, but sometimes Now they call me a little too much. But I tell people, I'm like, Look, if you're uncommunicative, and you miss milestones, and you're late on your payments, there's probably not going to be a lot of debate about whether or not to call your license. If you're communicating, you're updating us, here's our setback. Here's what we're trying to do. You know, we're in diligence with these folks, can you help us with this, we're going to bend over backwards to help you keep pushing down the path. And so I find that, you know, most of our companies are actually extremely communicative, if not, sometimes more than we want them to be. Because we understand that they have learned that that's the ticket to kind of getting us to help them continue to move forward. Speaker 17 1:49:09 Also, my role as the startup mentor within the tech transfer office, that a big part of my job is helping them to people who are thinking, thinking about forming startup get to the point where they're forming it, but also working with the companies that are already graduated and like continuing to make introductions for them to investors and so on. So there's, there's value add for them to like, continue communication with us. And like, a lot of these people, like they're updating me in a regular basis, like, here's what's going on, I know you're out talking to investors, I want you to know what's going on with their company. So similar to what Kelly said, if like, if they're in communication, like I'm sort of an adjunct member of their team and know what's going on. And then I can communicate that to the licensing managers like, what do you know about this company? They're behind under patent expenses, like, here's what's going on and raising Money are like they're falling on your face, whatever, I have that sort of inside knowledge. Speaker 3 1:50:10 But it's the startup also, it's a very risky affair. And both sides understand that Silvan they missed a few payments or you know, they do any of those things that you mentioned. You know, you can talk to them, you can see what they want to do try and increase the, maybe it's payments can be paid over a series of months, maybe we can increase, you know, maybe we can change the diligence to match what they've actually done and match what they're capable of doing. Because the idea is for them to succeed. So we can do that. So there are a few things you can change in the terms of the license through an amendment if they have a good argument to keep the technology. Speaker 1 1:50:56 Excellent. Well, I know we have covered a lot of ground today. So I just want to say on behalf of autumn thank you so much Reed Kelly Ken Haney for such an informative discussion and presentation back in February as well. And attendees. Thank you so much for joining today as well as submitting such great questions to keep our panel on their toes and give you lots of good insight. As a reminder, a recording of the webinar will be available for viewing on the autumn Learning Center within a few days at this event and it is included in your registration and slide handouts will also be provided there that were from the annual meeting and as well as certificate of attendance and all that good stuff. Please remember to complete the webinar evaluation which will open automatically when you close out of the session. This helps us serve your needs in the future. And again, I will just say thank you and I hope everyone has a great rest of their day and again, we appreciate you joining us. Speaker 3 1:51:51 I want to make a plug for the autumn Eastern meeting, if you don't mind is coming up in September 12 and 13th Transcribed by https://otter.ai