CIT Funding Sources An Overview of the GAP Funds and CRCF Programs November 2014 1
Agenda CIT Introduction Funding Landscape CRCF GAP Funds Discussion 2
CIT Mission CIT drives innovation, technology and entrepreneurship in Virginia to foster research commercialization, create new high-growth, hightech companies, promote innovative solutions, expand broadband and grow Virginia s innovation economy. 3
Service Lines and 2015 Objectives Accelerate federal funding for small business Operate CIT s GAP Funds Operate Office of Telework and Broadband Promotion Provide demand generation and infrastructure-development services Operate technology sourcing and management consulting practice Maintain a statewide research and technology plan Administer the Commonwealth Research Commercialization Fund Deliver technology solutions via R&D programs 4
Angel Investors Source: Startups.co 5
Angels Investors (cont.) Source: Startups.co 6
Venture Capital 7
Venture Capital VCs invested $9.9 billion in 1,023 deals Q3 2014, a 27% decrease in $ and a 9% decline in deals compared to Q2 2014 Investments in the first 3 quarters of 2014 totaled $33.2 billion, already exceeding the total funding for all of 2013 The top 10 deals accounted for 18% of dollars invested in Q3 There were 11 Megadeals ($100m +) in Q3 alone versus a total of 16 in all of 2013 Life Sciences investing in Q3 fell 35% in dollars and 6% in deals with $1.6 billion going into 188 deals 8
Venture Capital (cont.) Trends VC fundraising has not kept up with their rate of investing Exits (IPO and M&A) continue to trend up in 2014 9
Accelerating Commercialization Commonwealth Research &Technology Strategic Roadmap Eminent Researcher Recruitment Fund Research Matching Fund SBIR Matching Fund STTR Matching Fund RESEARCH PROOF OF CONCEPT OR INVENTION EARLY STAGE DEVELOPMENT PRODUCT DEVELOPMENT PRODUCTION GAP Fund Commercialization Fund Facilities Enhancement Loan Fund 10
CIT R&D 11
CRCF FY2015 Solicitation $2.8 FY2015 appropriation Single solicitation Limited submission Programs Commercialization Eminent Researcher Recruitment Facilities Enhancement Loan Matching Funds SBIR Matching Funds STTR Matching Funds All program materials online: guidelines, templates, FAQs, webinars, sample applications, link to submit LOIs 12
Key Dates KEY DATES October 29, 2014 November 14, 2014 December 16, 2014 January 31, 2015 Early June 2015 June 16, 2015 ACTIVITY Preview Issued RFP issued Letter of Intent (LOI) deadline Application deadline Award announcements Earliest project start date 13
Eligible Sectors Technology sector eligibility is consistent across programs Advanced Manufacturing (additive manufacturing, remote monitoring & sensing, and robotics) Communications (next-generation broadband networks, wireless telecommunications, and next-generation 911 infrastructure) Cyber Security Energy Information Technology (data analytics) Life Sciences Modeling & Simulation 14
Programs 6 programs available: Private sector companies: Commercialization SBIR Matching Funds STTR Matching Funds Academia, nonprofit research institutes, and political subdivisions Matching Funds Program Eminent Research Recruitment Program Facilities Enhancement Loan Program 15
Commercialization Program Targets young, early-stage technology companies in Virginia, with awards supporting proof-of-concept work that have a reasonable probability of enhancing the Commonwealth s national and global competitiveness. Eligibility criteria: Applicants incorporated on or after November 17, 2012 Virginia must be the principal place of business for the firm and its CEO Applicants must conduct the CRCF project in Virginia Applicants may have received up to, but not exceeding, $250K in outside private investment (not including funds from family, friends, and/or founders) Other conditions: Proof-of-concept work One-to-one match required Demonstrable economic development potential Reasonable probability of enhancing Virginia s national and global competitiveness Organizations may submit up to 2 applications in any combination under the Commercialization and SBIR / STTR Matching Funds Programs Awards up to $50K per application 16
SBIR / STTR Matching Funds Programs Targets Virginia-based technology businesses that have received recent SBIR or STTR awards in Virginia, with CRCF awards supporting commercialization of high-potential research or technologies related to the SBIR or STTR work in eligible technology sectors. Eligibility criteria: Applicants must have received an SBIR or STTR Phase I or II award from a federal agency or submitted a proposal in CY2014 and are awaiting award decision Phase I applicants must have incorporated on or after November 17, 2011 Phase II applicants must have incorporated on or after November 17, 2009 At least 51% of the applicant s employees must reside in VA At least 51% of the applicant s property must be located in VA Other conditions: Application must focus on CRCF project, rather than SBIR or STTR work Each application must be for a distinct SBIR or STTR award SBIR or STTR awards already tied to a CRCF-supported project are not eligible Organizations may submit up to 2 applications in any combination under the Commercialization and SBIR / STTR Matching Funds Programs Awards up to $50K per application 17
Tips for A Successful Proposal Consult Guidelines for specific criteria, including Objectives Plan of work, timeline Impact Market and potential for commercialization Project team Focus on CRCF project, not background information Budget and budget narrative Use current, program-specific templates 18
Additional CRCF Details Indirect costs are permitted Caps on indirect costs are program-specific and discussed in Guidelines Applications requesting direct costs only are reviewed more favorably IP agreements Executed IP agreement for dual or multi-party projects must be in place before funding is disbursed IP agreements must be durable For IP purposes, CRCF awards are not considered state funds Stem cell proviso 19
Application Process CRCF is an online process Letters of Intent (LOIs) Required Assist CIT in gauging proposal activity and identifying reviewers Applications Questionnaire Component documents to upload 20
Resources www.cit.org/initiatives/crcf/fy2015-solicitation/ FAQs document Live webinars: LOI/Solicitation Overview, The Application Process, and Completing the Budget/Budget Narrative (multiple sessions scheduled; dates, times, and registration links provided at the above URL) Email crcf@cit.org with any questions
CIT GAP Funds Investment Criteria Management Team / Founder Full-Time Commitment Integrity, Passion, Creativity Coach-ability Record of High Achievement Investment Stage Seed-Stage Focus Up to 36 Months Prior to Series-A Pre-prototype Newly-Launched Technologies Investment Range GAP Investment < $200K; >$100K Tranched < $1M Concurrent Syndication < $1M Previous Financing Follow-On Investment up to $250K Innovation Investment < $75K per Company > $50K Requires IAB Review Proprietary Advantage Unique Technology Defensible IP Position Difficult-to-Replicate Scalability Markets with Big Buying Power Potential for Dominant Market Position >$20M Top-Line within 5 years Returns > 5X Cash-on-Cash Return Industries Technology BioLife Energy Geographic Focus Virginia-Only 22
CIT GAP Funds Histogram 23
Questions? Sean Mallon: sean.mallon@cit.org, 703-689-3045 CRCF: crcf@cit.org 24