M·CAM and the School of Engineering

Date:  Mon, 2001-01-01

University of Virginia School of Engineering January, 2001 The availability of competitively priced debt and equity financing for small start-up technology businesses continues to constrain the growth of technology nationwide. Historically, the most formidable obstacles that confront a start-up company are a lack of access to capital and a limited cash flow. Commercial lenders, often avoid the start-up technology market entirely, or at a minimum demand an accelerated repayment schedule that, given the financial constraints and management difficulties associated with new businesses, typically result in under-capitalization and a high risk of failure. Mosaic Collateral Asset Management Inc. (M·CAM) is a new corporation formed with the goal of providing lending institutions access to a markets that, to date, have been inaccessible to traditional lenders and investors. M·CAM offers banks and investors a guaranteed purchase price for intellectual property owned by a loan applicant. This effectively allows the bank to treat intellectual property as collateral. The range of assets considered by M·CAM includes patents and associated licenses; marketing and distribution rights; trademarks and copyrights; trade secrets and marketing plans; and hardware, equipment and other unique assets. Research being conducted by systems engineering professor Peter Beling and his colleagues with M·CAM focuses on improving the accuracy and objectivity of the valuation process. The central task in this work is the development of mathematical models to predict the likely value of intellectual property, relative to comparable assets for which market valuations are known. The automated prediction capabilities of the models allow M·CAM to limit the scope and number of judgments required of evaluation officers, resulting in a faster and more objective evaluation process. The initial phases of this work were conducted under a $30,000 Innovation Award from Virginia’s Center for Innovative Technology (CIT) and M·CAM’s parent company, Mosaic Technologies. CIT recently honored this project as “Best University Research and Development Project” in a statewide competition. We are continuing this work under a $600,000, three-year award from M·CAM. The focus of this award is the development of methodology for long-term updating and improvement of M·CAM’s models.