Mark McKinley Talks About Venture Capital
October 30, 2012
By: Stephen Kent
, general Partner in Bay City's McKinley Technology Group
, spoke to Rotary about the projects his firm has partnered in as a commercialization specialist for new technology.
McKinley started his career at Dow, where he was instrumental in the development of Dritech, the super absorbent polymer used by Proctor and Gamble in the Pampers product.
McKinley's purpose is to take a new technology and turn it into a successful business. "When you do that the risk is really really high but the reward [for success] is really great." For a large company like Dow, it can take 20 years from idea to a successful venture. Some projects, however, can turn in just a few years and may return 16 times the investment.
When taking on a project "It's not just about the invention or project... in fact it's more about the market opportunity.", he said. "There is nothing more gratifying than seeing a product being pulled into a market. Conversely, there is nothing more disappointing than having to push a product into the market."
Moving a product requires knowing the market: its size, the market needs, competitive understanding, how the product differs. One must know how to penetrate a small market. The venture much be able to profit with less than ten percent of the market it competes in.
McKinley talked about the fact that inventors are creative vertically. Entrepreneurs are creative horizontally. The two make a powerful team but must recognize each other's abilities.
Describing the commercialization process, there are generally four stages over a 5 to 9 year period. The first year may require 20 to 100 thousand dollars. By the final, commercial state the venture will need on the order of 25 million dollars.
Among the key items for success is making sure that the inventors don't have a controlling interest in the business. McKinley gave several examples of why this is crucial. Essentially, the business side may need to make market decisions that don't agree with the inventor's love of the product.
The McKinley group's purpose is to verify the technology aligns with a market. They shape and develop the companies, organize and manage the teams, lead funding efforts, direct the business and provide a profitable exit for the investors.
McKinley went on to talk about his firms $20 million high growth technology fund. He talked about commercialization and networking then illustrated the process with a number of successful products they have developed and brought to market.
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CLUB NEWS and ANNOUNCEMENTS
The Real Bob Rogers???
Thanks to Dee Dee Wacksman
for the Halloween decorations, candy, etc. Of course we should mention the head dress that President Kim wore. She didn't wear the Groucho mask but Bob Rogers
was glad to put it on, along with the head dress, before the meeting was over.
said that the Foundation Gala
was a great success. Everyone should, right now, mark the first Friday in November 2013 for the Gala next year.
Cindy also reported on the fund raising results for the Golf Outing
. Revenues were 13,724 and expenses 6,187 leaving a profit of 7,520. That's the best the event has done in recent memory!
reported on an e-mail from Jency Schnettler
, our ambassadorial scholar who is now residing in Shanghai. Jency has been there a little more than a month and has a great apartment. She has classes in Chinese Society, Chinese Demographics, and Chinese Culture. She has an internship with the U.S. Commercial Service, which has given her a new insight into Michigan's efforts to expand abroad.
Jency reported on the Rotary club, which meets on Tuesday nights. They get a large number of visitors with 18 at the last meeting. She reported on their major project and on discussion of water projects. She also reported on the Rotaract Club. There will be more to come from Jency.
The Badge Box
has been reorganized alphabetically. Today was the first experiment with an ongoing project. Pay attention to the box until we get used to it.
noted that the 50/50 drawing
, which is normally split between the club and the winner, on Birthday Tuesday goes entirely to the Rotary Foundation in the name of the winner. This year the board voted to designate that contribution to the Polio eradication effort. Rotary has fought Polio since the 1980's. Chuck noted that we're down to three countries with any cases. There were 489 cases last year and there were only 175 cases, a 64% decline.
Remember to contribute to the clean water campaign and contest:
Put SILVER in OUR JUG ---
PUT BILLS (and checks) in the MORNING JUG
DATES TO REMEMBER
April 11, 2013.
(See the official schedule at
Nov 6, 2012: Rotary Video
---- ELECTION DAY ----
Nov 13, 2012: 10 Minute Rotarian
Nov 20, 2012: Rotary Homecoming
Organized by Rob Clark
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