The Advanced Technology Program Assessing Outcomes (2001) / Chapter Skim
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Panel I: The ATP Objective: Addressing the Financing Gap for Enabling Technologies
Panel I: The ATP Objective: Addressing the Financing Gap for Enabling Technologies
Pages 105-116
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From page 105... ...
The panel includes · Elizabeth Downing, the proprietor of a start-up company that has received government support from several programs, including the ATP; David Morgenthaler, a successful venture capitalist, who has not been associated with the program; and · Kathleen Kingscott of IBM, who will outline why a large company values partnerships programs such as the ATP.
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From page 106... ...
Many venture capitalists have neither the time nor the background to be ideal partners. So-called angel capital (from family, friends, or wealthy investors)
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From page 107... ...
If successful, this will substantially reduce the technical risks as perceived by private investors. Reducing Market Risks Market uncertainties are also great.
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From page 108... ...
Advantages of ATP for Small Companies Downing concluded by saying that federal funding programs have made it possible to reduce the technical risks of the technology sharply. Recent technical breakthroughs have allowed the company to move to "limited manufacturing." The company is now at the point at which it is able to look for private sources of capital, including venture capitalists and corporate partnerships.
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From page 109... ...
How Venture Capitalists Evaluate Potential Investments To elaborate this point, Mr. Morgenthaler described how Morgenthaler screens its opportunities for investment using a simple seven-step checklist, which includes · the need you are addressing, including the size of the potential market; · the product or service to fill the need;
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From page 110... ...
This has to do with the final item on my list, which is the internal rate of return. In many ways this is the limiting criterion on venture capital investments, because we always have our limited partners looking over our shoulders.
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From page 111... ...
Venture capitalists cannot finance all of the companies that need additional finance. As you may know, Internet public financing is starting to experience serious trouble.
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From page 112... ...
5 The Department of Defense has successfully addressed this gap with the SBIR Fast Track Initiative to speed awards for companies that can attract outside investment. See National Research Council, The Small Business Innovation Research Program: A Review of the Department of Defense Fast Track Initiative, Charles W
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From page 113... ...
Product cycles are becoming steadily shorter; at IBM they are now measured in "web years," of 90 days. The pace of innovation is illustrated by the fact that half of IBM's hardware revenues come from new products, that is, products introduced in the past six months.
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From page 114... ...
These partnerships involve three kinds of partners: universities, industry, and government. Universities bring breakthrough ideas and talent; industry brings marketplace experience.
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From page 115... ...
It needs the stability of multi-year budget commitments, to support the kind of long-term view that is implied by the notion of support for enabling technologies. Policy Issues for ATP Issues: In addition to the uncertain political environment, ATP faces a number of Declining ATP budgets.
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From page 116... ...
Maryellen Kelley of the ATP Assessment Office noted that some have criticized ATP for making multiple awards to the same companies. She asked Kathleen Kingscott how many of IBM's nine ATP grants involved new partners.
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