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Posted: October 3, 2007
Micro and nanotechnology based aerospace system pilot project fund launched
(Nanowerk News) CANEUS — a worldwide non-profit organization catering primarily to the needs of the aerospace community by fostering the coordinated, international development of MNT (Micro-Nano- Technologies) for aerospace applications – has launched a "pre-seed" fund to provide partial funding for the system-level development projects recommended by the CANEUS Board. Contributors gain privileged access to downstream investment opportunities. Here is from the fund description on the CANEUS website:
Typically, the outcome of the CANEUS conference workshop sessions is the creation of ”blueprints” for the implementation of MNT aerospace pilot projects. Those projects will see the development of new MNT technologies, advancing them from the concept level through the normal stages of R&D until they are ready for incorporation in complementary combination in prototypes of high-level systems. The basic technologies, and the end-point systems they lead to, will be designed to answer the most pressing needs of the large aerospace and defense systems buyers. Moreover, they are also chosen in line with the priorities of government funding agencies.
Therefore, it is crucial that there be no delay or uncertainty at the point when newly developed technologies will be ready for incorporation into the first prototype of a high-level system. (This refers to the technologies that are related to the pilot projects that were selected by the workshop participants at the CANEUS conference. Those workshops use as a point of departure the concept papers prepared prior to the conference.) To maintain the necessary momentum, we are proposing the creation of a purpose-built fund whose sole vocation will be to provide, typically, one-third of the estimated $3M for the system prototype development step of each of the half dozen or so projected pilot projects that will issue from the CANEUS conference workshops.
We cannot predict exactly how many of the concept topics under consideration will lead to a “green light” for a pilot project that will culminate in the building of a systems-level prototype. At least four — one from each general category — can be expected. That would mean that the required seed funding for the proposed CANEUS Pilot Project Fund (CPPF) would amount to $4M to $6M. A contribution unit size of $500K, with 5% of that amount being used to fund the operation and administration of the fund, would create opportunities for seven contributors if, on average, each one contributes two units of support to the fund.
Structure and Purpose of the Fund
The CPPF would be structured as a project of CANEUS, which has been constituted as a not-for-profit organization (under IRS Rule 501(c) 3) whose board of directors would include representatives from the organizations that contribute to the CPPF. The CANEUS board will also include members who are representative of the R&D community, of the government funding agencies, and of the buyers (government and commercial) of the high-level systems that would be based on the MNT that is brought step-by-step through the R&D development process by CANEUS. The CPPF is not a venture fund, as it will not be investing in business ventures.
It will invest in projects that are still very much at a pre-commercial stage of development. A pilot project that is co-funded at a level of 33% by the CPPF will typically receive the rest of the required funding from an agency program and an investor (or group of investors) with a special interest in the particular field of that project.
The goal of the CPPF is to eventually become a self-funding CANEUS unit. Towards that end, a means must be developed that will see the CPPF generating revenue from the increase in value of the technologies it helps bring forward. One way of accomplishing this would be for CANEUS to become a co-owner of the technology licensing rights held by the original developers of the different elements of proprietary MNT. CANEUS would thereby eventually earn a share of the downstream revenues that are collected in the form of licensing fees paid by the systems manufacturers who market commercial versions of the high-level systems.
ROI: Return on Investment from the CPPF
The CPPF contributors will each have a special interest in MNT. Some will be venture capital organizations or government agencies and others will be individual investors or venture funds that have been created by large corporations (including funds that are usually used to fund internal projects of corporate spin-offs). As key members of the Investment Committee, CPPF contributors will have a clear, insider’s view of the progress of the avant-garde MNT technologies as they progress through CANEUS’s unique, collaborative R&D process.
Given the international scope of the participating team members on the CANEUS projects, this will give contributors insight that is available to very few concerning early-stage R&D developments in other countries. The communication and visibility works the other way, too. The leading MNT researchers working on the CANEUS projects (as well as others in the CANEUS community) will all recognize and appreciate the involvement and support of the CPPF contributors.
The proximity to the CANEUS-sponsored R&D projects will give the CPPF contributors privileged access to the first-round funding opportunities that will be right there in front of them when the pilot project prototypes funded by CPPF demonstrate their advantages over existing systems. It is worth remembering that these prototypes are assuredly of great and immediate interest to the aerospace buyers who have been directly involved in directing new MNT technologies through the CANEUS R&D pipeline.