Advancing Innovation & Entrepreneurship for Hampton University November 13, 2014 Presented by Sean Mallon Nancy Vorona 1
Agenda CIT Introduction Funding Landscape CRCF FFAP GAP Funds MACH37 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
Background CIT is a non-profit corporation that conducts the business of the Commonwealth s Innovation and Entrepreneurship Investment Authority (IEIA). CIT creates new technology companies through capital formation, market development and revenue generation services. This lifecycle focus uniquely positions Virginia to maximize its research, entrepreneurship and financial resources to create the next generation of employment opportunities for citizens. 4
Board of Directors Karen Booth Adams, CEO, Hot Technology Holdings Eric Hansen, CEO and Co-Founder, Innovative Wireless Technologies Anne Holton, Secretary of Education Terry Hsiao, Founder and CEO, Hook Mobile Karen Jackson, Secretary of Technology Hooks Johnston, General Partner, Valhalla Partners Maurice Jones, Secretary of Commerce Ray O. Johnson, SVP and CTO, Lockheed Martin David Lucien, CEO, DCL Associates (Chair) Don Rainey, General Partner, Grotech Ventures Michael Rao, President, Virginia Commonwealth University Timothy Sands, Virginia Tech Michael Steed, Paladin Capital Group Teresa Sullivan, President, University of Virginia 1 Pending Appointment 5
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 6
Funding Sources Sources of New Venture Financing Entrepreneur Federal and State Government Grants Friends and Family Angel Investors Strategic Partner Venture Capital Asset-based Lender Equipment Lessor SBIC Trade Credit Factor Mezzanine Lender Public Debt IPO Acquisition, LBO, MBO Development Start-up Early Growth Rapid Growth Exit Black shading indicates primary focus of investor type. Gray shading indicates secondary focus, or focus of a subset of investors. 7
Angel Investors Source: Startups.co 8
Angels Investors (cont.) Source: Startups.co 9
Venture Capital 10
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 11
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 12
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 13
CIT R&D 14
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 15
Key Dates KEY DATES (Estimates) October 29, 2014 November 14, 2014 (estimate) December 16, 2014 January 31, 2015 Early June 2015 ACTIVITY Preview Issued RFP issued Letter of Intent (LOI)* deadline Application deadline Award announcements June 16, 2015 Earliest project start date 16
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 Data Analytics Energy Life Sciences Modeling & Simulation 17
Federal Funding Assistance Program (FFAP) CIT supports Virginia s Phase I and Phase II SBIR/STTR Applicants State wide SBIR/STTR support Mentoring & consultation Low cost training -- live workshops & webinars Phase 0 grants to support proposal development Referrals to expert consultants Monthly SBIR newsletter 18
FFAP (cont.) Upcoming training Norfolk lunch and learn on Nov. 19 (free) at ODU SBIR workshop full day low-cost session Dec. 16 in Richmond (all agency discussion with NIH reps to give special talk on NIH) SBIR/STTR for Postdocs & Graduate students WEBINAR Dec. 11 (free) State wide SBIR/STTR support FFAP is managed by Robert Brooke Email: robert.brooke@cit.org Phone: 703-689-3080 19
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 20
CIT GAP Funds Histogram 21
MACH37 Cyber Accelerator MACH37 is America s premier marketcentric cybersecurity accelerator. The unique program validates product ideas and develops relationships that produce customers and investments. Leadership team: Rick Gordon Managing Partner Dan Woolley General Partner Bob Stratton General Partner Ledger West Associate Partner 90 day program tailored to fit each cohort company. Focus is on customer, market and product validation Funding MACH37 offers seed funding and engagement with private venture capital investors MACH37 Stars Network access to a network with over 200 market makers, cybersecurity leaders and investors Third cohort of companies began September 2, 2014, bringing total of MACH37 investments to 17 new start cybersecurity companies in first year of operation. 22
Questions? Sean Mallon: sean.mallon@cit.org, 703-689-3045 Nancy Vorona: nancy.vorona@cit.org, 703-689-3043 Rob Brooke (FFAP): robert.brooke@cit.org, 703-689-3080 CRCF: crcf@cit.org 23