Bangalore: Aaron Joseph George, 23, is all set to spearhead his second firm. Since 2006, George has been the chief executive of Velozeta, a start-up developing a six-stroke engine (most motor vehicle engines use a four-stroke cycle to combust fuel) that he started during his engineering college days.
The firm—i2india Ventures, the Indian arm of Imperial Innovations Plc., a technology commercialization venture of Imperial College London—has a unique business model: source patents that have commercial potential, manage intellectual property, identify market opportunity, negotiate licences, provide incubation-assistance, build teams and invest up to Rs2 crore in a start-up.
The model, says George, is different from other incubators. “When budding entrepreneurs contact incubators, what they essentially end up getting is some space to work in. Real mentorship doesn’t happen. Also, incubators ask for business plans, which may not have been framed till then," he says.
With i2india, once an idea has been identified, essentially everything else, including an entrepreneur, comes from them.
In India, i2india has signed patent agreements with institutions such as Indian Institutes of Technology and Indian Institute of Science. So far, it has identified 30 patents, after rejecting at least 100.
Its plan includes commercializing 12 ideas and it is looking at forming companies for at least half of them. It is looking for patents in healthcare and clean-tech. “We are interested in enzyme technology, genetic modification and biofuels—these have huge market potential," says Deepam Mishra, chief executive officer, i2india. “It’s a relation of part-ownership with these institutes. What we are trying to do is to get people and research together to further prove the idea."
Typically, i2india takes the highest equity (30-40%) for its efforts. As far as revenues are concerned, i2india takes 20-60% of it, while the employees/entrepreneurs get around 20-30%. The institute and the scientist gets around 10-30%. The revenue sharing depends on the technology as those such as drug molecules are very difficult to sell in the market.
Besides its business plan, the firm says the experience of its parent company, Imperial Innovations in the UK, will also help it pave its way in India. Imperial Innovations is a publicly traded intellectual property commercialization company, with a market cap of $400 million (Rs1,928 crore).
In the meantime, Mishra says, the new model’s success is yet to be tested. Also, he said, it is difficult to convince the institutes and the government that this model can actually work.
An expert said the i2India model could prove beneficial to institutes, which are mostly backed by public funding, as they would not have to spend huge amounts annually to keep their patents alive. But “on the negative side, this could lead to a monopoly of these corporate firms over innovations which have actually been funded by the taxpayers," says Sujit Bhattacharya, a professor at New Delhi based Jawaharlal Nehru University, who tracks intellectual property trends.
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