4. Transfer Ultimately, Manifold is interested in achieving liquidity for the portfolio investments it has made. However, Manifold is not in the business of commercializing products themselves. Therefore, in order to achieve a return on its investment, Manifold “transfers” responsibility for commercialization by either licensing or selling the technology to one or more established companies, or starting a new company. While both of these paths can create a return on an investment, the decision about which to pursue is based on a number of factors (see below). Depending on the answers to these questions, Manifold will choose either the licensing path or the new company path.
			Dependence - Can the product be sold separately or is it a component/feature to an existing product? What is its value relative to the total product? Competition - What is the competitive landscape, and what is the industry receptivity to licensing? Capitalization - How much money will be required create a new company? Can manufacturing be readily outsourced? Product Readiness - How ready is the product for market introduction? Does it still require significant development? Extendability – Can the product or technology lend itself to a line of new products or multiple lines? Timing – What is the typical product cycle for similar/analogous products in the industry? Could it be done faster outside of a big company?
		1. Licensing Alternative Manifold will negotiate an agreement with an established manufacturer who has the sales, marketing, manufacturing, distribution and brand to create the best chance of success for the new product. In an ideal scenario, there will be 3-5 primary players in the market – enough to create competition for the license but not so many as to represent a fractious market. Depending on the market dynamics and the deal that can be negotiated, Manifold will seek an exclusive or non-exclusive license.			2. New Company Alternative Manifold will recruit a management team, arrange for financing (angels or VC’s) and support the company as it transitions and grows. In return, Manifold will own a significant percentage of this new entity and participate at the board level. Once the new company is sold or begins distributing profits, Manifold will receive its pro rata share. If the technology for the new company was a result of an external submission (e.g. individual) they too will own of a piece of the new company, as defined in the original partnership agreement.
		Why start a new company instead of doing it from within Manifold? Our answer is simple: Success is most easily achieved when people are focused on a particular task – in this case, a particular business. Creating a new, independent company, ensures that the management team is only rewarded if success is achieved in this new business. Investors, likewise, are focused on helping this single business achieve success and conflicts of interest and distraction are minimized. Manifold is in the business of diversified risk through a portfolio, but wants a dedicated team built for each of its spin-out companies, focused solely on the success of their specific entity.