Funding

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 this section we expect an analysis of funding needed or expected for valorization of the R&D result. An estimation is expected (range of costs not obviously exact amounts)
… in terms of IPR protection
 

In terms of IPR protection the R&D developers could possibly apply for a utility model. The company has to submit an application to the Bulgarian Patent Office. It takes a few months to make the needed studies and explorations by the Patent office, and if with positive outcome, the company would only then be issued a certificate of utility model. The provisional costs for the entire procedure and related costs would range between 2-3000 BGN for IPR protection on the territory of the country. At the moment international IPR protection is not foreseen and is not deemed necessary, as the product is not even placed on the Bulgarian market yet. International IPR would incur costs that are not considered reasonable for the company at the moment.

 

…in terms of product development
 

In terms of product development no further costs are needed. The prototype is already developed, at good quality, production costs and market price – hence this stage no further development of the product is needed.

 

…in terms of mass production
 

In terms of mass production – 1000 pieces per month (12 000 pieces per year) – the following equipment and resources (and respective costs) would be needed for the first year:

-          equipment (lathe and drill machines for metal cutting, lazer for engraving the metal body of the silver pen) – 30 000 eur

-          premises rental – 10 000 eur

-          personnel – 10 people with average monthly salary 500 eur.

-          materials – 200 000 eur for 12 000 pieces per year

 

… in terms of marketing
Galvano is willing to organize mass production. The company is looking for a strategic partner for being in charge of the marketing and distribution of the product. All related costs are expected to be taken by the potential partner sought. The Galvano company is willing to deal with the production only.

Yet, the marketing costs for the first year on the market are roughly estimated to 60 000 eur.

 

 

 

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 200 000 270 000 468 000 440 000 440 000
Personnel 60 000 72 000 140 000 150 000 180 000
Other running costs 40 000 20 000 80 000 20 000 20 000
Marketing costs 60 000 30 000 20 000 20 000 30 000
TOTAL EXPECTED COSTS 360 000 392 000 708 000 630 000 670 000
Price per Unit 25 eur 25 23 20 20
Type of Unit Piece
Number of Units 12 000 18 000 36 000 40 000 50 000
TOTAL Expected Revenues 300 000 450 000 828 000 800 000 1 000 000
CASH FLOW REQUIRED (REVENUES-COSTS) - 60 000 58 000 120 000 170 000 330 000
TOTAL CAPITAL required for five years 60 000 eur for the first year

 

SECTION 2: QUALITATIVE FACTORS

 

4 Dimension of identified target groups
An estimation of the proportion of the target market (described in Section 3) which we expect to take
 

Initially the silver pen is intended to be placed on the local (Bulgarian) market. According to expert estimations the market could take around 300 000 pieces.

In general, the silver pen has the potential to be sold on the global market due to its wide area of application. Besides the everyday use, it is expected to have a large demand on the market in areas where water is contaminated as is in Africa for instance, or in some Asian countries. It could as well be sold to International Development Aid organisations, to the Red Cross, to charity organisations, etc. The silver pen is as well very prospective to be used in the army for various peace-making missions.

 

 

 

6 Evaluation of financial Risks for R&D result
 

The product is completely developed and in terms of further R&D development risks it holds no financial risk.

 

 

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

Note: INTERVALUE partners are expected to pre-define a list of existing European funding sources for product development available for the country and advisors will check whether the proposed product is relevant for that funding source or may define an additional source
1. … N/A. The company is not willing to apply for EU funding as European projects are deemed inefficient by the company.

2.

3.

4.

2 National Funding
Note: INTERVALUE partners are expected to pre-define a list of existing national funding sources for product development available for the country and advisors will check whether the proposed product is relevant for that funding source or may define an additional source
1. …N/A. The national funding schemes that are appropriate for developing a new product for instance, require IPR protection.

2.

3.

3 Private funding
Note: INTERVALUE partners are expected to pre-define a list of existing private funding sources for product development available for the country and advisors will check whether the proposed product is relevant for that funding source or may define an additional source
1. … The company is looking for private funding – this could come from a business partner willing to invest in the production, or this could be bank loan to set up the production site.

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)…
 

On the basis of the overall assessment of Galvano’s new product – the silver pen – the experts opinion is hat the most suitable financial instrument for commercialisation of this product would be private financing. This is further justified by the company’s capacity to organise the production process. With this in mind, joint-venture of commercial agreement with technical assistance are deemed as the most suitable form of partnership.

 

 

 

Decision of evaluation

The R&D has a high potential of exploitation

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 this section we expect an analysis of funding needed or expected for valorization of the R&D result. An estimation is expected (range of costs not obviously exact amounts)
… in terms of IPR protection
 

In terms of IPR protection the R&D developers could possibly apply for a utility model. The company has to submit an application to the Bulgarian Patent Office. It takes a few months to make the needed studies and explorations by the Patent office, and if with positive outcome, the company would only then be issued a certificate of utility model. The provisional costs for the entire procedure and related costs would range between 2-3000 BGN for IPR protection on the territory of the country. At the moment international IPR protection is not foreseen and is not deemed necessary, as the product is not even placed on the Bulgarian market yet. International IPR would incur costs that are not considered reasonable for the company at the moment.

 

…in terms of product development
 

In terms of product development no further costs are needed. The prototype is already developed, at good quality, production costs and market price – hence this stage no further development of the product is needed.

 

…in terms of mass production
 

In terms of mass production – 1000 pieces per month (12 000 pieces per year) – the following equipment and resources (and respective costs) would be needed for the first year:

-          equipment (lathe and drill machines for metal cutting, lazer for engraving the metal body of the silver pen) – 30 000 eur

-          premises rental – 10 000 eur

-          personnel – 10 people with average monthly salary 500 eur.

-          materials – 200 000 eur for 12 000 pieces per year

 

… in terms of marketing
Galvano is willing to organize mass production. The company is looking for a strategic partner for being in charge of the marketing and distribution of the product. All related costs are expected to be taken by the potential partner sought. The Galvano company is willing to deal with the production only.

Yet, the marketing costs for the first year on the market are roughly estimated to 60 000 eur.

 

 

 

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 200 000 270 000 468 000 440 000 440 000
Personnel 60 000 72 000 140 000 150 000 180 000
Other running costs 40 000 20 000 80 000 20 000 20 000
Marketing costs 60 000 30 000 20 000 20 000 30 000
TOTAL EXPECTED COSTS 360 000 392 000 708 000 630 000 670 000
Price per Unit 25 eur 25 23 20 20
Type of Unit Piece
Number of Units 12 000 18 000 36 000 40 000 50 000
TOTAL Expected Revenues 300 000 450 000 828 000 800 000 1 000 000
CASH FLOW REQUIRED (REVENUES-COSTS) - 60 000 58 000 120 000 170 000 330 000
TOTAL CAPITAL required for five years 60 000 eur for the first year

 

SECTION 2: QUALITATIVE FACTORS

 

4 Dimension of identified target groups
An estimation of the proportion of the target market (described in Section 3) which we expect to take
 

Initially the silver pen is intended to be placed on the local (Bulgarian) market. According to expert estimations the market could take around 300 000 pieces.

In general, the silver pen has the potential to be sold on the global market due to its wide area of application. Besides the everyday use, it is expected to have a large demand on the market in areas where water is contaminated as is in Africa for instance, or in some Asian countries. It could as well be sold to International Development Aid organisations, to the Red Cross, to charity organisations, etc. The silver pen is as well very prospective to be used in the army for various peace-making missions.

 

 

 

6 Evaluation of financial Risks for R&D result
 

The product is completely developed and in terms of further R&D development risks it holds no financial risk.

 

 

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

Note: INTERVALUE partners are expected to pre-define a list of existing European funding sources for product development available for the country and advisors will check whether the proposed product is relevant for that funding source or may define an additional source
1. … N/A. The company is not willing to apply for EU funding as European projects are deemed inefficient by the company.

2.

3.

4.

2 National Funding
Note: INTERVALUE partners are expected to pre-define a list of existing national funding sources for product development available for the country and advisors will check whether the proposed product is relevant for that funding source or may define an additional source
1. …N/A. The national funding schemes that are appropriate for developing a new product for instance, require IPR protection.

2.

3.

3 Private funding
Note: INTERVALUE partners are expected to pre-define a list of existing private funding sources for product development available for the country and advisors will check whether the proposed product is relevant for that funding source or may define an additional source
1. … The company is looking for private funding – this could come from a business partner willing to invest in the production, or this could be bank loan to set up the production site.

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)…
 

On the basis of the overall assessment of Galvano’s new product – the silver pen – the experts opinion is hat the most suitable financial instrument for commercialisation of this product would be private financing. This is further justified by the company’s capacity to organise the production process. With this in mind, joint-venture of commercial agreement with technical assistance are deemed as the most suitable form of partnership.

 

 

 

Decision of evaluation

The R&D has a high potential of exploitation

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