MAG Business Model (Blueprint)

Mission:

To Commercialize Value-Added Technologies

The Company will act as a conduit to the worldwide scientific/inventing community in an effort to commercialize technologies that add value to existing supply chains. In so doing, shareholders and stakeholders will have fun, make money, and make the world a better, more effective place to live.

Goals:

MAG’s shareholders and stakeholders have several goals for the Company:

1. To attract hundreds of potential value-added projects each year
2. To commercialize all projects that pass the Company’s Investment and Discovery Filters.
3. To provide investors and stakeholders with risk-adjusted returns that exceed 40%

Strategies:

The Company will implement the following strategies to meet its
goals:

1. MAG will develop relationships with both institutions and individuals in the scientific and inventing community. Such stakeholders will constitute a network, in order to increase project inputs, as well as provide assistance within projects in an ongoing basis. MAG will develop a “crowdsourced” web site to facilitate communication within this network.
   
   
2. The Company will implement a conceptual business
   model to enable it to investigate and participate in numerous, perhaps dozens, of projects at once. This business model calls for owning intellectual capital and outsourcing non-value added steps. MAG will employ smart” filters and other portfolio management techniques to leverage intellectual capital.
   
   
3. MAG will implement conceptual business models in the companies that it spawns. This outsourced model leverages equity returns while minimizing investment and risks. Management of each company will share in the value created by the investment.

Tactics:

The Company will employ appropriate tactics to support its strategies. Tactics are described herein relative to MAG’s “Process Chain,” which is attached.

The first step in MAG’s Process Chain is “Project Inputs.”

The Company would contract with various universities to act as their commercialization arm. The licensing or development arrangement would be negotiated upfront, so as not to require greenfield negotiations for each project. This same approach would be used for individuals not associated with an institution. A one-size-fits-all licensing deal would be offered to the
marketplace of inventors.

The Company does not desire to commercialize all types of technologies. This would be too broad a mandate and would likely lead to unsatisfactory financial results.

The Company’s “Project Filter” would be stated on its web site and would let the inventing community know what qualifies for investment consideration. Purely for presentation purposes, the Project Filter is shown as the second step in MAG’s Process Chain.

Employing a Project Filter creates investment efficiency in several ways. First, it focuses the Company’s attention so that its core competencies can be leveraged. Second, it lets the world understand MAG’s “sweet spot” in terms of investment appetite. Finally, it lets investors see that the filter reinforces the Company’s Mission, and therefore increases the likelihood of meeting its financial return goals.

The following illustrates elements of the Project Filter:

 

MAG’s Project Filter The prospective product must be patented and proto-typed The product must be value-added to an existing supply chain. Thus, the Company does not wish to invest in products that are category-starters. The project can be productized and branded The Company will not invest in ideas, pharma, biotechnology, nanotechnology or other early stage unproven technologies. There is a known path-to-market for the product. Total investment in the project will not exceed $5 million.

The Project Filter is designed to limit the Project Inputs to only
those that should receive serious attention.

The next step in the Process Chain is called “Project Discovery.” Projects that pass the Filter undergo rigorous scrutiny before an investment is considered.

Each Project that passes through the Filter will be subjected to a
standardized review process. Most of the Discovery will be
outsourced, lending to a scalable model.

The following elements constitute the Discovery:

1. Patent and technology review (is the product really protected; does it do what the promoter claims?)
2. Market review (is there a market and known path
   –to-market for the product?)
3. Management review (can the appropriate
   management be identified and attracted?)
4. Financial review (does the product promise to
   yield the minimum risk-adjusted return?

Each of these elements will be outsourced to companies that specialize in this area. It will likely cost $100,000-200,000 per project to discover if it should be funded. Assuming Managers are attracted to the Project, they create a strategic plan for the business.

The funding decision is the next step in the Process Chain.

The Investment Committee will determine whether a Project
receives funding. This Committee will include key members of
MAG and representatives from the various investors in the fund.

Projects that receive funding move to Step 5 of the Process Chain: Commercialization. The Project is converted to a Company, which will also employ a conceptual business model.

The final step of the Process Chain is “Grow or Go.”

To meet the needs of investors, most investments will be harvested in 5-7 years from funding.