Mentor Program Orientation Regional Center for Innovation & Commercialization (RCIC)

1. Mentor ProgramOrientationRegional Center for Innovation & Commercialization (RCIC) Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50 Dallas, TX 75252 www.ntxrcic.org Ph: 972-883-4920 Fax: 972-883-4919

2. Agenda • Emerging Technology Fund (ETF) • N. Texas RCIC • ETF process & timeline • Evaluator role • Mentor role • Next steps Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

3. ETF Objectives • Job creation through company formation • Earn a return on State’s Investment! • To accelerate the growth of our economy and create jobs, we must attack “The Gap” • What is “The Gap”? The time between the formation of an idea (or product), and the formation of a viable business around that idea. Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

4. “The Gap” Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

5. ETF Regions and RCIC’s North Texas RCIC Texas Life Science CIC (statewide) West Texas Coalition for Innovation and Commercialization Central Texas RCIC El Paso / Trans-Pecos RCIC Gulf Coast RCIC Rio Grande RCIC South Texas RCIC Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

6. The North Texas Region • Population = ~7.6 million (over 1/3 of the state) • 40% of Texas’ annual gross domestic product • 63 counties, incl. the DFW Metroplex • 64Institutions of Higher Education and research: • 1 medical schools, 2 health science centers, 11 public and 18 private universities • Wide variety of research, e.g., bio-medical, semiconductor, nanotechnology, telecommunications, information systems. • Major concentration of high-tech industries, e.g.: • Texas Instruments, etc. in semiconductors • Raytheon, Lockheed-Martin in electronics and defense • Telecommunications, information services, etc. Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

7. ETF Fund I Awards • Research SuperiorityStateN. Texas • 8 projects $ 35.0 M (3) $16.0 M • Commercialization • 27 projects $ 33.5 M (6) $ 5.8 M • Research Matching • 7 projects $ 16.8 M (1)$ 1.0 M Total $ 85.3 M (10)$22.8 M Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

8. Research Superiority Grants To attract new, world class applied research talent to public IHE’s Awarded • Nanotech Research Initiative (NRI) $10.0 M • UT-Austin (UTA, UTD) • + $20M from Industry and IHE’s • 3rd such Center in the US • TxAIRE Project (UT-Tyler)$ 3.7M • Medical Fluorescence (UNTHSC-FW)$ 2.3M Total $16.0M Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

9. Research Matching Grants Matches external applied R&D funding for development of emerging technologies with substantial commercial potential. Awarded: • Global Contours (Rockwall) $0.9M Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

10. Commercialization Awards Invests in new commercialization of emerging technologies by companies collaborating with Higher Education Institutions. Awarded: • Hanson Robotics, Inc $1.50M • OptiSense Networks, Inc $1.50M • Photodigm $ .75M • Resonant Sensors Incorporated $ .60M • PrincipleSoft $ .75M • SNRLabs $ .75M Total $5.85M Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

11. ETF- Fund II • Legislators passed HB-1188 on 5/28 • $193 million for 2007-2009 biennium • Some important improvements: • Clarified “grant” vs. “award” language • Allows non-equity payback mechanisms • Clarified some legislative intent • Provides matching funding for RCIC’s • Re-invests ETF payback in the ETF fund! Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

12. ETF II – Priorities & Focus Areas • Maximum emphasis on Commercialization activity • Higher % of Fund for Commercialization • Major priority on increased deal flow • Priority/Pressure on Texas public IHE’s increasing tech-based spinouts • Governor’s direction to Regents, Presidents, etc. • Rename Tech Transfer offices to Commercialization • Standard IP agreements for use by all public IHE’s • Financial incentives to IHE Comm’l Offices for success • ETF matching funds for RCIC service expansion • De-emphasis of Research Matching Grants • ONLY large, high-potential, consortia may apply Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

13. Allocation of ETF II Funds $193 million over the biennium (9/07 - 8/09) Plus Private, Industry and Federal funds attracted or catalyzed by ETF. Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

14. New Pre-Seed Program • Early-stage company • With < $500K prior investment • With an attractive, basic business idea • Initial award up to $250K • Total $1M ‘reserved’ • Additional tranches accessible by milestone progress • Must commit to extended RCIC ‘mentoring’ • State’s investment is ‘convertible debt’ • Company has 30 months to secure add’l investment Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

15. Commercialization Deal Criteria • Early stage, technology based, private company • Must include collaboration with public or private institutions of higher education in Texas • Must provide significant economic benefit to the state of Texas • Priority given to proposals that involve • Emerging scientific or technology fields to enhance the state’s national or global economic competitiveness • A medical or scientific breakthrough or in area of clean energy • Matching funds • A substantial portion of the business must reside in the state of Texas Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

16. Evaluator Role • Evaluation of ETF applications • Similar to STARTech 10 • More structured than STARTech • More data required from the applicant up front in the application • Most NTX RCIC evaluators have day jobs • They do not mentor like STARTech Mentors Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

17. The Process & Timeline

18. Mentor Role • We are adding a Mentoring Program • Very similar to STARTech’s Mentor Program • Volunteer position • Evaluate/judge deals • Decide which deals move forward in the process • Help groom their presentations for the next pitch • Provide mentoring after they receive ETF money Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

19. Mentor Program • Will create a certification training program • Certified mentors will receive • Public recognition • Business cards • Name badges • Email address • Right to reserve conference rooms for meetings Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

20. Key Dates forRound 2.2 • 21-Aug-07 Release Request for Proposals • 31-Oct-07 Evaluators identified, Conflict of Interest Forms completed • 06-Nov-07 Early application submission encouraged • 13-Nov-07 Applications and fees due to NTXRCIC (5:00 p.m.) • 15-Nov-07 Email to Evaluators for conflict of interest with Applicants • Email to Applicants – proposal received, conflict with Evaluators • Application feedback begins • 27-Nov-07 Quick Pitches with all applicants • 03-Dec-07 Pass/Fail Phone Call (2:00) – begin debrief of ‘F’ Candidates ‘F’ Feedback Forms Due from Evaluators Shortly. • 18-Dec-07 Scored Applications Due from Evaluators (L/S deals forwarded) • 03-Jan-08 Regional Orals Dry Run • 08-Jan-08 1:1 orals with North Texas RCIC and Top Candidates • 15-Jan-08 NTXRCIC reviews ranked proposals with NTXRCIC Regional Board • 24-Jan-08 State Orals Dry Run • 01-Feb-08 NTXRCIC submits recommended proposals to State ETF committee • 07-Feb-08 Applicant Presentation Day-Austin • 21-Feb-08 State ETF Committee meets to review proposals • 22-Feb-08 State ETF Committee recommends to Governor, et al. Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

21. Need More Deals • We need to see more quality deal flow • The ETF Fund II terms are very VC friendly • Pre-seed: convertible debt (very similar to STARTech) • Regular investments • Now equity, just like VC’s • Valuation set by other 3rd party investment • State get 20% lift if first money in, other wise 20% less • State will vote along with major stock holder • More detail on www.emergingtechfund.com Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

22. Next Steps • Must sign Conflict Of Interest policy • Mentor Application? • Get password and access to applications • First meeting: Quick pitches on Nov 27th Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50, Dallas, TX 75252 Ph: 972-883-4920; Fax: 972-883-4919 www.ntxrcic.org

23. For additional and current information, forms, frequently-asked-questions, etc. see:www.ntxrcic.orgorwww.emergingtechfund.com Texas Emerging Technology Fund – North Texas Regional Center for Innovation & Commercialization 17919 Waterview Pkwy, Suite 1.50 Dallas, TX 75252 www.ntxrcic.org Ph: 972-883-4920 Fax: 972-883-4919