USM Start Up / Spin Off

Roadshow
Why Start a New
Company?

Value add to the technology Benefits outweigh risks

Flexibility and autonomy Opportunities for

greater financial returns
New ecosystem @ USM
Too early for industry
Contribute to economy & society
Committed Founder(s)
Wealth creation
 DEFINITION
Start-Up:
 Not created from University research
 Focuses on a single idea
 Exploits a current market niche

Spin Off:
 Based on University’s IP
 Formed to commercialise research
innovations
Target duration is 40
days between first
meeting with CIC to
approval by VC
 Business Proposal
Intellectual Property
 Determine offering and value
proposition
 IP protection – current  Demonstrate viability and commitment
and future  Background
 Product/Service
 Due diligence  Market
 License / Outright sales  Management
 Pipeline IP  Risk analysis
 Finance
 Exit
 Funding
 Seed funding from
 ThePitch@USM – Phase I
(RM5-10k)
 USM Seed Fund – up to RM50k
 Fund raising from third party
Involvement
Involvement
 Must be endorsed by VC
 Founders – time commitment, focus
on technical development
 Staff must apply for “Permohonan
Kerja Luar” and/or “Kelulusan Khas”
 Incentives and remuneration must be
authorised
 Founder(s) and University/subsidiary Equity Division
 SUSO Formation Committee to
evaluate proposition and present
recommendation to VC for approval
 % University equity to be decided on a Need to
case-by-case basis (suggested 5% – demonstrate a
20%) based on IP, space, laboratory link to the
services, equipment, and funding University
 Foster Embark on Job creation
entrepreneurial start-up
culture @ USM learning curve

Graduate Internship Pre-comm

employability funding

Equity – options Branding Income –

and shares rental, fees
  Private limited company (Sdn Bhd)

 Need to appoint a Company Secretary

and a company auditor

Board of Directors  Must hold its AGM within 6 months of

accounted year end
 University might
stipulate a non-executive
 New Section 17A of the MACC Act 2009
seat in the Board
enables commercial organisations and
 Recommended to meet associated persons to be subjected to
every quarter in the first
legal proceedings should the person
2 years, and at least once
commits corruption offences
every 6 months
thereafter
Documentations
 Facilities and Services Agreement
• Use of space, service and facilities at the
University
 Licensing/Commercialisation Agreement
• Current IP, pipeline IPs
• Fees, royalties, consultancy, etc
 Shareholders’ Agreement
• Terms for shares subscription
 Memorandum & Articles of Association
• Constitution of the company
 Executive vs Non-Executive
Executive:
 Full time salaried director
 Delegated with managerial or executive
Requirements powers by the board to manage the business
 At least 2 directors,
residing in Malaysia
Non-Executive:
 A natural person  Does not work for the company full time
 18 years and above  Receive relatively smaller director’s fees
 Of sound mind
 Determine the overall policy of the company

 Not disqualified under

Companies Act 1965
 Phase 1 Graduation
Managed by CIC Incubation - Scaling up of
business
Evaluation - Incubator services - Graduate from
- Entrepreneurial the programme
Initial - Induction training program - Moving out
- Entrepreneurial - ThePitch@USM
- Initial meetings training program
- Proposal - Technology
- Market validation development
- Business model - ThePitch@USM - Market traction
- IP protection - Licensing/
and IP due Commercialisation
diligence Agreement Phase 2 & 3
Managed by incubator team/USAINS
Targeted: 40 days
Trade sale – sale of assets and business

Merger – merge with another company

Redemption of shares – share returned to the company

Initial public offering – raise capital from public by listing in

stock exchange
Winding up – subject to winding up rules and procedures
Thank
You!