BCIC-Mitacs Commercialization Voucher Program Guide

CONTENTS 1.0 INTRODUCTION ................................................................................................................. 3

2.0 OBJECTIVE ........................................................................................................................... 3

3.0 PROGRAM STRUCTURE .................................................................................................. 3

4.0 ELIGIBILITY ......................................................................................................................... 4

4.1 COMPANY ........................................................................................................................ 4

4.2 GRADUATE STUDENTS / POSTDOCTORAL FELLOWS .................................. 4

4.3 ELIGIBLE PROJECTS .................................................................................................... 5

5.0 FUNDING DETAILS ........................................................................................................... 6

5.1 COMPANIES IN OR ENTERING THE MITACS-ACCELERATE PROGRAM 6

5.2 COMPANIES OUTSIDE THE MITACS-ACCELERATE PROGRAM ................. 7

5.3 TERM OF VOUCHER PROJECT ................................................................................. 8

5.4 REVIEW PROCEDURE AND SELECTION .............................................................. 8

6.0 CONDITIONS OF RECEIPT OF VOUCHER ................................................................. 8

6.1 Approved Use of Grant ............................................................................................... 8

6.2 Reporting ......................................................................................................................... 8

6.3 Intellectual Property (IP) .......................................................................................... 9

6.4 Confidentiality of proprietary information ........................................................ 9

6.5 Acknowledging Funders ............................................................................................ 9

6.6 Public Information .................................................................................................... 10

6.7 Changes and Termination ...................................................................................... 10

6.8 Conflict Resolution .................................................................................................... 10

6.9 Mitacs Environmental Review Policy ................................................................ 10

6.10 Liability ....................................................................................................................... 10

6.11 Indemnity Clause..................................................................................................... 10

6.12 Insurance .................................................................................................................... 11

6.13 Program Audit .......................................................................................................... 11

Product opportunity or company stage categorization ..................................... 12

1.0 INTRODUCTION

The BCIC-Mitacs Commercialization Voucher Program (Voucher Program) helps B.C. businesses get their ideas and products to market faster. Established companies can apply for a commercialization voucher to retain a graduate student from a B.C. based Post Secondary Research Institution (PSIs) for commercialization assessments on new products or services or new market opportunities for existing products or services.

2.0 OBJECTIVE

The Voucher program is designed to demonstrate the value of industry/academic collaboration and to help develop and retain B.C. commercialization talent. The Voucher program aims to:

Build commercialization capacity at B.C. PSIs;

Increase opportunities to build relationships between PSIs and the private sector;

Showcase graduate student skills and talent to potential employers within B.C;

Assist graduate students in gaining industry and commercialization experience;

Assist graduate students in exploring career opportunities in B.C.

3.0 PROGRAM STRUCTURE Eligible Projects will aim to provide businesses with vital information on the commercial potential of their technology or business concept, allowing them to make informed decisions about pursuing the opportunity. The information generated by an Eligible Project will serve as a basis for creating a business plan. The Eligible Project may also open the door to other funding opportunities within or outside of British Columbia.

Proposals will be accepted and evaluated on an ongoing basis during this pilot phase and can start once approved. The latest date by which approval can be provided on a submitted proposal is March 31, 2013. In order to ensure sufficient time for processing we strongly recommend early submission of applications, which should be no later than March 15, 2013.

Applications must be jointly submitted by British Columbia based companies and supervising professors and graduate students or post-doctoral fellows that meet the eligibility requirements.

Forms can be downloaded from http://www.mitacs.ca/commercialization-voucher-program

Funding outcomes will be provided to the graduate student, supervising professor and the company via the contact email addresses provided on the application form.

Information on the outcome will not be provided over the telephone or via email prior to the official letter release.

Voucher applications are pre-screened for completeness and formatting, as indicated on the Application Instructions page at the front of the application form. Only complete applications will be reviewed and processed.

**The full application should be submitted via email, if in the original format, including all additional required information and signatures. **PLEASE NOTE:

All applicant companies must be ready to commit to the proposed Voucher project, both financially and time-wise, at the time of application.

4.0 ELIGIBILITY

4.1 COMPANY

The company must meet each of the following criteria to be eligible:

Provincially or federally registered as a corporation, partnership or sole proprietorship, with legal status to operate in British Columbia and having a physical presence in British Columbia.

Developing innovative new products or services for markets, OR taking existing products and services into new domestic or global markets, in one of the provincial priority areas of forestry, mining, natural gas, agri-foods, technology, clean technology, green economy and tourism The applicant must not have previously received a voucher in the amount being applied for.

4.2 GRADUATE STUDENTS / POSTDOCTORAL FELLOWS

Definitions of qualifying student participants:

o Graduate Student: A registered student that is undertaking an advanced academic

degree, either a Masters or Doctoral degree, at a BC Post-Secondary Institution

o Postdoctoral Fellow: Postdoctoral Fellow or equivalent at a British Columbia Post-

Secondary Institution, not holding a full-time, continuing appointment within the university.

Fellow must have received a Ph.D. or equivalent doctorate degree in an appropriate field within five years of initial appointment.

The graduate student/ postdoctoral fellow must meet each of the following criteria to be eligible for the Commercialization Voucher:

o Be physically present and conducting studies in British Columbia. o Have the capability and resources to complete all proposed voucher work

within the prescribed time frame. o Have knowledge specific to the focus of the proposed voucher project or

the capability to complete the assignment under mentorship.

Selection criteria for eligibility will include the following: o experience and suitability; o recommendation from the supervising professor; o endorsement from the receptor company; o no conflicts of interest.

4.3 ELIGIBLE PROJECTS The primary goal of a voucher is to undertake an opportunity assessment by a graduate student or post-doctoral fellow for a company. This professional assessment should be in the form of a written report. It is anticipated that the assessment will take between 3 and 4 months to complete. The report must examine one or more of the following factors:

Specialized Services - For example intellectual property assessments which are required to assist the entrepreneur related to business development.

Market Feasibility - An in-depth look at the market. Define the need for the product? Who are the competitors and replacements (real and perceived)? What sectors could the product be applied to, and what are the sales potentials within these sectors?

Product/Service assessment/modification– Does the product/service meet the needs of the clients? Does the product/service need to be modified to meet the needs of new potential markets? What modifications are needed? Characterization and implementation of modifications.

Operations - What is needed in terms of infrastructure, equipment, outsourcing, etc. to make the innovation a successful commercial product/company?

Human Resources - What employees may be needed to make the innovation a successful commercial product/company? Does the company possess the knowledge and expertise to ensure success in the proposed venture?

Strategy - What is the larger existing strategy of the company? An examination of current strategies should provide insight into business options that align with current company strategies and goals, maximizing the potential for commercial success of new ventures or products.

Other commercialization aspects – Other aspects that accelerate technology commercialization and adoption.

**EXAMPLE: An Opportunity Assessment examining Market Feasibility of a product could include:

Product description: What is the product called? What does it do?

Minimum product: What key features must the initial product offering include to address the target market?

Problem type: What is the problem being solved? Is the customer aware of this problem? Is this a latent, passive, active or urgent problem?

Value proposition: what are the key customer benefits of solving the targeted problem?

Buyer types: Who are the end users, influencers, recommenders, economic buyers and decision makers?

Adoption costs: How easy or difficult will it be for customers to integrate the product into their business?

Market size: What is the total market, total addressable market, total target market (most likely buyers)?

Market type: Is this a new, existing or re-segmented market?

Channel to market: How do customers want to be reached? direct, distributors/resellers, VARs, retailers, online, etc

Competition: Who are the key competitors? What is their market share?

Differentiation: Why will customers buy the product instead of the competitor's? What is the cost of entry against incumbents?

Pricing: What is the pricing model? What is the price for target customers?

Revenue: What is the ongoing revenue model? What are the proposed up-sells after the initial sale?

Lead generation: Where will the company find its customers? How will the company get referrals?

Return on Investment

A properly done report would be based on many direct customer interviews (less ideal would be customer surveys).

5.0 FUNDING DETAILS

There are two types of commercialization voucher available: A.) Companies participating in or entering the Mitacs-Accelerate program. B.) Companies outside the Mitacs-Accelerate program.

5.1 COMPANIES IN OR ENTERING THE MITACS-ACCELERATE PROGRAM Companies that are participating in, or entering the Mitacs-Accelerate Program can apply for a commercialization voucher of $7,500 in addition to the industrial research

and/or development component of the Accelerate program, to complete an opportunity assessment.

No additional company contribution is required other than that already

contributed to access the Mitacs-Accelerate program.

Preferably, the student would be the Mitacs-Accelerate intern, but could be a different student, depending upon availability.

It is required that the participating student receive the full $7,500 commercialization voucher fund as a stipend.

The commercialization voucher funds are provided to the student’s academic supervisor.

The opportunity assessment can precede or follow the research and development stage undertaken through the Mitacs-Accelerate program and is estimated at 3-4 months until completion. Information on the Mitacs-Accelerate Program can be found at: http://www.mitacs.ca/accelerate

No funds will be released prior to the assessment and approval of any ethical or environmental reviews (if appropriate).

Any scope changes to the approved project, as in the original proposal, must be approved by Mitacs and BCIC.

5.2 COMPANIES OUTSIDE THE MITACS-ACCELERATE PROGRAM

Each commercialization voucher awarded to an Eligible Project provides $7,500 in provincial funding.

The company is expected to provide a matching contribution of $7,500 towards the project.

The company must send their contribution of $7,500 directly to Mitacs.

The combined $15,000 is provided to the student’s academic supervisor as a grant.

From these funds, it is required that the participating student receive a stipend of no less than $10,000.

Any funds over and above the student stipend will be used to support project related expenses, including travel to the industry partner’s site, research and lab expenses, and equipment.

No funds will be released prior to the assessment and approval of any ethical or environmental reviews (if appropriate).

The expenditure of funds is limited to supporting the direct cost of the project.

Any scope changes to the approved project, as in the original proposal, must be approved by Mitacs and BCIC.

5.3 TERM OF VOUCHER PROJECT

The graduate student/ postdoctoral fellow will develop a project plan in partnership with an academic supervisor and a supervisor from the industrial partner organization.

The opportunity assessment will require regular interaction with the partner, but the time spent at the partner organization may vary on a case by case basis.

The graduate student/ postdoctoral fellow and the academic supervisor will ensure confidentiality of partner information as specified in the project outline

The graduate student/ postdoctoral fellow will retain their status as a graduate student / postdoctoral fellow at their university during the voucher project and shall not become an employee of the partner organization during this time

5.4 REVIEW PROCEDURE AND SELECTION

All Voucher applications will be reviewed by members from a BCIC-Mitacs Evaluation Committee. The reviewers will comment on the appropriatness of the project to the graduate student’s/ postdoctoral fellow’s academic level and skills, review whether the project objectives are achievable within the project scope and timeline, and provide comments or references to other methods that could be helpful in carrying out the project.

6.0 CONDITIONS OF RECEIPT OF VOUCHER

6.1 Approved Use of Grant

Vouchers cannot be used to pay for services already funded through other municipal, provincial or federal government grant programs.

Vouchers cannot be transferred to another business.

Vouchers may only be used to pay for work as outlined in the written agreement in the application between the graduate student and the business.

6.2 Reporting

The framework for the opportunity assessment report will be provided, and will require:

o a report confirming the application of the evaluation framework; o confirmation that a conclusion was reached based on the process.

Voucher recipients must provide this report detailing the outcomes of the project within one month after the conclusion of the project. In exceptional circumstances, an extension of up to 2 months may be requested in writing.

Certain records required to be maintained pursuant to this Agreement are subject to the protection and access provisions of the Freedom of Information and Protection of Privacy Act.

During the three years following the completion of the Voucher project, Mitacs and BCIC may collect information on impacts and outcomes resulting from the grant funding, such as new or enhanced products and processes, intellectual property generated, new customers, new or increased sales, market capture, new jobs and other significant outcomes.

Voucher recipients must agree to participate at their own cost in program evaluations that may be undertaken by Mitacs or BCIC from time to time, both during and after completion of the voucher project.

6.3 Intellectual Property (IP)

Mitacs has negotiatied IP agreements with UBC, SFU and University of Victoria.

Mitacs Intellectual Property Simon Fraser University Agreement

Mitacs Intellectual Property Univ of British Columbia Agreement

Mitacs Intellectual Property Univ of Victoria Agreement

For all other universities, the program’s policy is to take no position in the intellectual property created by the funded projects. Intellectual property is left to be shared between the university, their researchers and the sponsoring company according to the intellectual property rules of the host university, unless a separate agreement is negotiated between the university, their researchers and the sponsoring company. Mitacs and BCIC policy is to take no position.

6.4 Confidentiality of proprietary information

It is anticipated that, in the performance of eligible voucher projects, proprietary information may be collected and the opportunity assessment report may include data and analyses assembled and presented in a manner that creates a competitive advantage for the company. Such information will remain confidential between the company, the student and the supervisor unless explicit written permission to release that information is provided by the company.

6.5 Acknowledging Funders

All publications, presentations and public messages arising from Mitacs and BCIC funding must acknowledge Mitacs, BCIC, the Government of British Columbia and the Government of Canada.

6.6 Public Information

Mitacs and BCIC reserve the right to publish and/or disseminate non-confidential information regarding their grants. As public bodies, Mitacs and BCIC are regulated by the Freedom of Information and Protection of Privacy Act (FOIPP) of B.C. As such, Mitacs and BCIC will not communicate personal data of supported Voucher recipients to anyone outside of Mitacs, BCIC and Voucher funding partners without their explicit permission.

6.7 Changes and Termination

Any substantial changes must be consistent with the overall intention of the approved project.

The proponents must receive approval from Mitacs prior to any significant changes to the project.

If the project is interrupted with the intention that it will be resumed, the Voucher proponents must seek and receive approval from Mitacs prior to the interruption.

Mitacs must be notified in writing within 30 days if the project is terminated by either the graduate student/postdpoctoral fellow, or the company.

6.8 Conflict Resolution

In the case of a dispute between the company and the graduate student, it is the responsibility of the disputing parties to reach a resolution.

6.9 Mitacs Environmental Review Policy

Mitacs will ensure that the research it supports promotes sustainable development and is conducted in a manner that respects and protects the environment. Towards this, Mitacs is committed to paying careful attention to environmental considerations in its decision to fund any research. Ultimate responsibility for environmental considerations rests with the Mitacs Board of Directors which may, at its discretion, assign this duty to a subcommittee.

6.10 Liability Mitacs and BCIC shall not be liable whatsoever to the graduate student for any direct or consequential loss, injury, or damage suffered by the Voucher recipient.

6.11 Indemnity Clause

The company and graduate student shall indemnify and hold harmless Mitacs and BCIC, its employees and agents from any and all third party claims, demands, actions or costs (including legal costs on a solicitor-client basis) for which the company and/or graduate student is legally responsible, including those arising out of negligence or willful acts by the graduate student or company’s officers, employees or agents.

6.12 Insurance

BCIC and Mitacs are unable to assume liability for accidents, illness, or losses that may occur during the BC voucher project period. All participants are responsible for ensuring that they have appropriate insurance in place.

6.13 Program Audit

As part of an ongoing effort to improve and enhance the BCIC-Mitacs Commercialization Voucher Program, BCIC and Mitacs reserve the right to audit any account pertaining to a Voucher.

Appendix - A

Product opportunity or company stage categorization All exit criteria must be true in order to transition to the next stage.

Stage Target Stage Objective Exit Criteria for Stage

Product Validation Entrepreneurs or ventures with a business hypothesis, an idea for a product or an early product prototype.

Validate that the product concept provides a compelling solution to a significant market problem.

Favourable market feedback from prospective customers via surveys, interviews, phone conversations and meetings.

A representative number of customers in the target market have indicated their willingness to use/buy product when it becomes available.

Market Validation

Entrepreneurs or ventures with a product prototype or early version of a product.

Validate that a significant enough market exists to build a profitable business and acquire early adopter customers.

Venture has focused on a specific market segment and has several paying early adopter customers in that segment.

Addressable market size has significant growth potential.

Validated business model demonstrates that if sales and marketing resources are added, revenue/business will grow.

Market Penetration

Companies with early market traction and success in the ‘early majority’ segment.

Refine the business model,develop a repeatable sales process and dominate the company’s first market segment.

Venture is the market-leader in a specific market segment and expanding to adjacent segments

Majority of customers are buying standard product i.e., not dominated by services or customization – sales process is repeatable

Business is generating profit with each product sale and may be cash flow positive

Rate of customer acquisition is increasing exponentially

Market Expansion Companies with established customer base (must be the market leader in a specific market segment) and predictable revenue stream.

Implement scalable process, business and infrastructure sales process. Establish global footprint.

Mass market growth in multiple markets

Multiple channels to multiple geographies

Profitable growth through large installed based of customers