Funding

VALORISATION PLAN: Funding and Investment Potential

SECTION I: ESTIMATION OF COSTS

 

1 Taking into account the rest of the cost evaluation please provide an overall estimation of the total costs for full deployment/production of the R & D result.
… in terms of IPR protection
The cost of registering the trade mark could be estimated at 900 Euro.

 

 

…in terms of product development
In order to advance to product development, several different activities and cost factors should be planned:

  1. Hardware environment.  This could be a powerful Beowulf cluster that is rather cheap and could be estimated at 10,000 Euro.  Should a BlueGene computer be needed, costs for hardware would already amount to something like 5 Million Euro, which is questionable as investment cost.
  2. Cost for satellite images – these would be necessary for a production environment but could be neglected for the development since archived high resolution images are available at practically no cost.  The costs for satellite images should be paid however by the customers which increases the total cost of ownership for the customers.  Potential customers may buy such satellite images anyway because of their existing solutions.
  3. Development cost. These would be rather high and could be estimated at a team of 10 qualified developers working together per month at 8000 Euro/person.

 

 

 

…in terms of mass production
There will be no mass production.

 

 

… in terms of marketing
Marketing costs could be estimated at 20,000 Euro/month.

 

 

 

2 Based on the above assessment as well as the marketing information please provide the correct estimation of the price for R&D product in correlation with costs
  Year 1 Year 2 Year 3 Year 4 Year 5
Fixed costs 10.000 2000 2000 2000 5000
Personnel 800,000 800,000 100,000 100,000 100,000
Other running costs 5000 5000 5000 5000 5000
Marketing costs 20,000 20,000 20,000 20,000 20,000
TOTAL EXPECTED COSTS 835,000 827,000 127,000 127,000 130,000
Price per Unit     500,000 500,000 500,000
Type of Unit Complete system
Number of Units 0 0 1 2 5
TOTAL Expected Revenues 0 0 500,000 1,000,000 2,500,000
CASH FLOW REQUIRED (REVENUES-COSTS) 835,000 827,000 373,000 873,000 2,370,000
TOTAL CAPITAL required for five years 1,662,000

 

 

SECTION 2: QUALITATIVE FACTORS

 

3 Dimension of identified target groups
The target groups are all public sector organizations that deal with earth observation tasks although that may only be on the national level of one state.  They have already solutions installed and may be hesitant to replace some components.

 

 

4 Evaluation of financial Risks for R&D result
The financial risks are mostly related to the market in that potential customers may be hesitant to adopt new solutions.  There are also technical risks involved, in particular scalability of the solution, but this is explained in other sections.  This may also drive marketing costs high.  Further, since it is expected that mostly national governments may buy the solution, marketing may involve a lot of travel across Europe or further.

 

 

 

 

SECTION 3: IDENTIFICATION OF FINANCING SOURCES

After evaluating all the above mentioned criteria, please tick the best financing source for the achievement of R&D result (i.e. own capitals, banking credits, venture capital, business angels, etc)

 

1. European Funding

Define relevance of the product with the following potential funding sources and comment

1. …This is an excellent case for further funding from one of the European programmes such as FP7, although product development could not be financed from these programmes.  The activity relates in particular directly to the GMES initiative.

2. …It might also be possible to obtain funding from the Interreg Programme.

3.

4.

 

2. National Funding
1. …There has already been national funding and it is believed that at this stage, European funds will be more appropriate.

2.

3.

 

3. Private funding
1. …The real product development could be financed by venture capital sources, provided that a company is founded in Bulgaria that drives the product development and that a strategic partnership is created with one major solution providers in this area.

2.

3.

 

4. Other

SECTION 3: FINAL EVALUATION

It is requested a final evaluation considering the funding opportunities you believe most suitable for the exploitation of the R&D result, considering the possibility of the creation of a spin-off, further research, in particular, a cost/benefit analysis and a financial projection for the R&D result, type of collaboration identified (i.e. Licensing Agreement, Technical Cooperation, Joint Venture, Manufacturing Agreement, Commercial Agreement with Technical Assistance, Creation of a spin-off, Joint further development)…
The research development presented here is extremely interesting, but the way to a full and mature product may still be long and there are various risks that should be overcome:

  1. There is a technical risk that the solution cannot be fully developed into a mature product, in particular it is not clear in how far the solution presented is scalable.
  2. The marketing risk is that potential customers might hesitate to replace existing solutions although the product offered might have much higher performance and functionality.
  3. The developer is the Technical University of Sofia who have technical capacity but not the capacity for product development and marketing.  Therefore it will be imperative that a company is formed in Bulgaria that enters into a strategic partnership with one major provider with access to a world wide market.

 

 

 

 

Decision of evaluation (Please keep only the appropriate)

  • The R&D result needs major revisions
  • The R&D result has good potential of exploitation

 

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