Pathway B: Institutional Commercialization (Scarlet Knight Enterprises) Financial & Operational Architecture Pathway B is triggered when an internal agentic workflow demonstrates "Market-Leading Utility"—meaning its logic is robust enough to be licensed to other Power 4 institutions. This transition shifts the project from an internal Rutgers Athletics expense to a Scarlet Knight Enterprises (SKE) revenue-generating asset. Purchase & Transfer Costs (Alchemy to SKE) When SKE acquires the Intellectual Property (IP) from the internal incubator, a "Commercialization Transfer Fee" is triggered to compensate Alchemy Agentic for the transition from a bespoke internal tool to a scalable enterprise product. IP Maturation Fee: A one-time payment of $75,000 – $150,000 (depending on complexity). This covers the refactoring of code from "Rutgers-specific" to "Multi-Tenant" architecture (allowing other universities to use it without seeing Rutgers’ private data). The Employee-Innovator "Buy-In": SKE allocates a $10,000 - $25,000 Innovation Bonus to the Rutgers employee who originated the workflow, funded as part of the acquisition cost. Legal & Compliance Audit: $15,000 fixed cost for a third-party "NCAA Compliance & Data Privacy" certification to ensure the tool is safe for market distribution. Servicing Costs & Operational Process SKE does not act as a software developer; it acts as a holding company. Alchemy Agentic remains the technical steward. Maintenance & Support (The "Keep-Alive" Fee): SKE pays Alchemy a monthly retainer of $5,000 – $12,000 per agent. This covers 24/7 monitoring, security patches, and API updates. The Unwinding/Exit Strategy: The "Sunset" Clause: If the agent fails to secure at least three external institutional licenses within 18 months, SKE can "unwind" the commercial version. Reversion of Rights: Upon unwinding, the IP reverts to Rutgers Athletics for internal use only. Alchemy’s commercial retainer is canceled, and they revert to a lower-cost "Internal Maintenance" tier. Buy-Out Option: If SKE wishes to sell the IP to a third-party (e.g., a sports-tech firm like Hudl or Teamworks), Alchemy Agentic receives a 15% "Exit Participation" fee for their role as the founding architect. Estimated Token & Compute Costs Agentic AI incurs variable costs based on "tokens" (the volume of data processed by the AI). SKE (Commercial/External) Costs: Projected Monthly Spend: $500 – $2,500 per external client. The "Pass-Through" Model: SKE’s licensing contracts will include a "Compute Surcharge." If a client university (e.g., Ohio State) runs an unusually high volume of recruiting queries, they are billed for the excess token usage, protecting SKE’s margins. Alchemy Agentic (Development) Costs: Projected Monthly Spend: $200 – $750. Usage: These costs are incurred during R&D, stress-testing, and "Red-Teaming" the agent to ensure it doesn't hallucinate compliance data. Alchemy absorbs these costs within their Maturation Fee. Revenue Sharing Models Alchemy Agentic’s compensation is structured to align their technical success with SKE’s commercial success. Option 1: The Long-Term Partner (Managed Service) SKE Revenue Split: 70% SKE / 20% Alchemy Agentic / 10% Employee-Innovator Pool. Logic: Alchemy manages all technical updates, client onboarding, and troubleshooting. SKE manages sales, branding, and university relations. This is a "Service-Heavy" model. Option 2: The Tool Creator (Licensing Model) SKE Revenue Split: 85% SKE / 5% Alchemy Agentic (Royalty) / 10% Employee-Innovator Pool. Logic: Alchemy delivers the final "boxed" product and provides no ongoing support beyond basic security. SKE takes on the burden of technical support and hosting. This is a "Product-Heavy" model. The "Rutgers First" Dividend: Regardless of the model, the Rutgers Athletics Department (the original incubator host) receives a "Life-Time License" at zero cost, ensuring that the internal department always benefits from the most advanced version of the tool without further capital expenditure.