1. TEDCO Funding Programs November 2013

2. Mission To facilitate the creation and growth of businesses throughout all regions of the State by supporting entrepreneurship and innovative technologies – Establish and manage programs that support innovation – Establish and manage programs that promote entrepreneurship – Funding for technology transfer and development – Funding for business formation, growth and expansion

3. Vision Maryland will be internationally recognized as a premier location for innovation, entrepreneurship and company formation – Multiple innovation clusters – Large, established entrepreneurial community – Thriving venture capital community

4. Tech Commercialization Projects Collaborative projects to leverage the effort and resources – Focused on advancing products/services toward commercialization – Defray a portion of the development costs – Allow company and its technology to mature and attract follow-on funding

5. Conventional Funding Proof of Concept Product Design Basic Research Research Laboratory Corporate Activity Commercial Launch Public Funding Venture Capital F, F, F, & F Tech Transfer Angels SBIR / STTR

6. TEDCO Programs (Plus) Proof of Concept Product Design Basic Research Research Laboratory Corporate Activity Commercial Launch F, F, F & FSBIR, TBED & SeedGrants, Corp. R&D Angels & Venture Patent Support $10K Stem Cell Research Fund $110K - $750K MD Industrial Partnership $100K Rural Business Innovation $7.5K MD Venture Fund $1M MD Innovation Initiative $215K Tech Validation $50K Tech Commercialization Fund $100K TEDCO Capital Partners $500K MD Bio Ctr-Commercialization $200K MD Bio Ctr-Translational $200K VLT Fund $500K

7. Maryland Innovation Initiative (MII) – $5.8M in funding (annually) – Foster the transition of promising technologies having significant commercial potential from Qualifying Universities – “Site Miners” walk the halls for opportunities

8. MII Funding Programs – Phase I - Pre-Commercial Research $100K Faculty – Phase II - Commercialization Planning $15K Faculty or Entrepreneur – Phase III - Early-Stage Development $100K Start-up Company proposal within 12 months of Patent License application Additional funding for multiple university collaborations

9. MII Application & Review Process – Apply on line at www.tedco.mdwww.tedco.md – Submissions by 1st of month NLT 5PM Holiday or weekend next business day NLT 5PM Submissions every other month (e.g. Jan 2, Mar 3, June 2) – Compliance review – Internal Review team due diligence – Site Miner is the proposal champion Must see proposals > 2 weeks before submission Required to sign off on all applications – Best proposals advance to Review Committee

10. MII Decision Process – Review Committee scores and ranks – Recommendations to the MII Board – Decisions of the MII Board are final – Awards notification – Non-proprietary summary use for public disclosure – Feedback to PIs

11. MII information Jennifer Hammaker Program Manager Maryland Innovation Initiative jhammaker@tedco.md (410) 715-4173 www.tedco.md

12. Tech Validation Program (TVP) – Goal - Increase non-MII campus start-ups – Team - Inventor, tech transfer, and entrepreneur – Funding -Up to $50K $40K Pre-commercial technology research $10K for commercialization analysis (also federal labs) Order of activity to be project specific

13. Patent Assistance Program – Start-up company support for ongoing IP expenses paid to MD university/college – Within 18 months of License agreement – Up to $10K Grant on a one to one match

14. Maryland Entrepreneur Resource List – Resource for: Companies to find experienced Entrepreneurs and Mentors Entrepreneurs to find their next business opportunity Entrepreneurs to collaborate and help each other – Registration Open for: Experienced Entrepreneurs Mentors – Available for Viewing http://tedco.md/program/maryland-entrepreneurs-resource-list-merl/

15. For further University Programs & MERL information Linda Saffer Program Manager University Programs lsaffer@tedco.md (410) 715-4175 www.tedco.md

16. Maryland Stem Cell Research Fund – Maryland Stem Cell Research Act of 2006 – Promote human stem cell research and medical treatments through grants to state public and private entities – Three types of grants: basic, translational, or non- clinical research on human stem cells in Maryland Investigator-Initiated Grant up to $200K/year up to three years Exploratory Grant up to $100K/year up to two years Post-doctoral fellows funding up to $55K/year up to two years

17. A NEW Pre-Clinical or Clinical Stem Cell Research Grant – RFA for Pre-Clinical and Clinical Stem Cell Research Grants to ‘for-profit’ Companies – Conduct research in Maryland using human stem cells to further medical therapies – Only for Company projects that have clearly defined and achievable milestones Pre-Clinical Grants, up to $500K project/up to three years Clinical Grants, up to $750K project/up to three years

18. Maryland Stem Cell Research Fund – The 6 th round of funding from the Maryland Stem Cell Research Fund, $10.4M in FY 2014 – To date over $100M and 289 research projects have been funded – For up to date information: www.mscrf.org www.mscrf.org

19. For further MSCRF information Dan Gincel VP University Partnerships & Executive Director MD Stem Cell Research Fund dgincel@tedco.md (410) 715-4172 www.mscrf.org

20. Technology Commercialization Fund (TCF) – Facilitate the commercialization of technology by Maryland companies – Significant collaboration/product development required – Projects up to 12 months and up to $100K award Requires a 50% company match (can be In-Kind)

21. Success Criteria – Achieving technical/budget/schedule milestones – Finding continuation funding (as of May 30, 2013) 225 projects funded; $15.4M 190 projects completed; $12.1M $532M in continuation funding 44 : 1 leverage Follow-on funds were raised from Angel, VC, SBIR, State, Debt Capital, Fed Contracts, Strategic Partners, …

22. Eligibility – Recipient must be Maryland technology based for- profit company Fewer than 16 employees (FTEs) AND – Recipient must be early stage No revenue (Revenue = commercial product sales/services) OR Venture investment no more than $500K total – Meet the ‘significant collaboration’ requirement

23. Significant Collaboration – Companies engaged in a Significant collaboration: Federal Lab, or Academic Institution in Maryland Non-profit research organization Under a license agreement or a research agreement – Companies receiving Significant coaching: Incubator companies receiving business assistance (3mo.) ACTiVATE and INNoVATE Graduates Companies receiving RBI2 assistance

24. Application Process – Proposal submitted on TEDCO website Proposal guidelines Submission deadline 1st of each month – Review process requires two months – On-Line RFA – TEDCOFunds http://www.tedcofunds.org/portal.asp

25. Proposal Sections – Header Information and Abstract – Business Opportunity – Product or Service Description – Market Analysis and Marketing – Business Operations – Project Plan and Milestones – Project Team – Budget and Budget Justification 25 numbered pages or less, 1” margins, 12 font

26. Header & Abstract – Project Title – Company Name – Company’s official contact person Name Phone Number Email Address – Abstract Non-Proprietary brief description of the company and the technology It will be used by TEDCO publicity All one page 1

27. Business Opportunity – Business opportunity to be addressed – Problem Origins How currently addressed The demand – Need – Customers Customer clearly described Value to the customer Beyond page 1, use “Company Proprietary” where needed

28. Product or Service – Describe the product or service and its relationship to the problem Clear to layperson / Enough detail for expert to assess – Stage of the technology development Benefit over other approaches Proof of principle / preliminary data Photos, diagrams, illustrations, … anything to help the words communicate

29. Product or Service – Intellectual Property (IP) Type of IP Key aspects protected Current and future products covered Geographic coverage Prior art and freedom to operate Licensor, key license terms and dates – Product development and commercialization Pathway / milestones / associated funding sources Regulatory or other required approvals

30. Market Analysis & Marketing – General Market Size /Trends Initial and Secondary Markets / Why? Customers / Value proposition – Competition (table) / Barriers to Entry – Revenue Model Profitability / Price Points / Gross Margins – Marketing and Sales How promoted / Delivery to the customer / Partners Current status

31. Competitive Comparison

32. Business Operations – How the company will operate Product development or services How will manufacturing be done – Management Team Qualifications related to operational plan Advisors and their commitment Skill set gaps and how they will be addressed

33. Business Operations – Financing required to go to market Milestones for financing Proposed sources Exit strategy (if applicable) – Financial statements 5 year pro forma (Income Statement, Balance Sheet, and Cash Flow Statement) and If in business over 1 year (Historical summary for each full year or last 3 years)

34. Project Plan and Milestones – Describe the proposed project Technical explanation of the project Advancing toward commercialization Increasing company valuation Attracting follow-on funding – Technical explanation of product / service – Project details Staffing and budget with justification Enough detail to conduct a technical review

35. Project Plan and Milestones – Specific aims and Quantifiable outcomes Justification for the approach Specific milestones and associated costs (3 groups) (Used to validate progress and set payment schedule) – Any contingency plans – Maximum 12 months – Regulatory guidelines / lab animals or human subjects / IACUC & IRB / HIPPA and HITECH

36. Project Team – List of project personnel Staff and collaborators Brief summary of applicable background Position with the company and role in the project – Justification of the sufficiency of the team for the project

37. Budget & Budget Justification – Detailed budget Match to that which TEDCO Funds (50%) Each line item (justification in narrative) – Three columns TEDCO Funding Company match Total

38. Budget & Budget Justification – Details: Minimum 50% company match (can be In-Kind) Minimum 80% in project direct costs – Subcontracts are direct costs – Labor ~ Hours / cost per hour / fringe benefits (Max. $60/hr. for company employees) – Equipment and materials ~ Units / unit cost – Travel is excluded unless critical Maximum 20% for in-direct costs Remember milestones and progress payments

39. Milestones and Progress Payments

40. Attachments – Attachments are Not included in 25 page limit – Only include Reference and support letters Detailed historical and pro forma financials Resubmission summary – Overview of reviewers’ concerns – Where addressed in the proposal – Three (3) page limit – Revised full proposal (still 25 pages)

41. Review Process – In by the 1st – 60 days to Final Decision – Four stage review Compliance Review Preliminary Review Final Review Final Decision

42. Compliance Review – RFA requirements Eligibility requirements Format requirements Rejections may resubmit without Resubmission Summary

43. Preliminary Review – Outside commercialization review (with NDA) – Outside technical review (with NDA) Both as needed to complement in-house expertise – Site Visit – Review team selects companies for Final Review Not selected applicants receive feedback Resubmissions require Resubmission Summary External reviews and Site visit typically not repeated

44. Final Review – Company Presentation 10 minute presentation to Review Committee 20 minutes of Q&A Company representative asked to leave Resubmissions require Resubmission Summary – Review committee meetings Typically 3rd Tuesday of month (9AM to Noon) (Seven weeks after submission) Keep this time open when applying

45. Final Decision – TEDCO President/Executive Director Final Review recommendations Final decision Companies notified of their result Awardees start Closing process

46. Funding Recommendations – Turned Down List of issues are given to the applicant May resubmit, addressing all the concerns Resubmissions require Resubmission Summary – Approved A formal closing NLT 90 days

47. Closing Process – TEDCO Counsel manages the Closing – Company key documents such as Certificates of Good Standing from tax office(s) Articles of Incorporation, Bylaws, Corporate Resolution authorizing execution of the convertible note, most recent Financial Statements, rent agreement with incubator Collaborative agreement finalized Evidence of regulatory guidelines compliance Etc.

48. TEDCO Agreement Terms – Funding Tranches 25% upfront 25% at Milestones with project report and invoice Final payment requires final project report and Closeout Site Visit – Corporate covenants Section 11 of agreement Covenants and revenue reporting expire with the end of the repayment obligation

49. TEDCO Agreement Terms – Convertible Note Purchase Agreement – Payback: 8% interest – May be converted to equity – Payback period indefinite until the obligation is fulfilled

50. TEDCO Agreement Terms – Milestone reports Major Milestones during project (~ 33% of effort) Final Project Report / Site Visit / Final Payment – Quarterly Financial Statements Calendar quarters beginning with closing As long as TEDCO holds a note or securities – Annual Economic Impact Reports Five years or until TEDCO no longer holds a note or securities – A TEDCO Portfolio Manager will be assigned General assistance / mentoring / networking / etc.

51. For further TCF information Henry Ahn Program Manager Technology Funding Programs hahn@tedco.md (410) 715-4165 www.tedco.md

52. Rural Business Innovation Initiative (RBI²) – Assist small technology oriented companies move to the next stage of growth – No cost to the company – Strengthening existing & emerging companies in rural Maryland – Build a technology entrepreneurial community in the rural areas

53. RBI² Assistance – Business assistance (examples) business model or strategy market strategy/analysis and competitive analysis funding opportunities and introductions financial analysis business plan and grant review – Technology assistance (examples) intellectual property prototype development manufacturing problem solving green assessments, etc.

54. RBI² Criteria – Must be developing new technologies or utilizing technology – Less than 16 employees – Annual revenues < $1M/year – Age of company not a factor

55. Regional Representatives Western Maryland Rep. Chuck Ernst 301.491.7034 cernst@tedco.md Southern Maryland Rep. Angela Singleton 410.941.9111 asingleton@tedco.md Northeast Maryland Rep. Debbie Grosh 443.986.2111 dgrosh@tedco.md Lower Eastern Shore Rep. Barry Frey 410.202.8867 bfrey@tedco.md Mid & Upper Eastern Shore Rep. Mark D. Greene 410.829.1408 mgreene@tedco.md

56. For further RBI 2 information Robbie Melton Director Entrepreneurial Innovation rmelton@tedco.md (410) 715-4164 www.tedco.md

57. Investment Programs – Technology Commercialization Fund – TEDCO Capital Partners Propel Baltimore Fund Orange Knocks Cyber Fund 2 Veterans Opportunity Fund 1 Chesapeake Regional Innovation Fund 1 1-Currently in formation stage 2-Currently raising capital

58. Propel Baltimore – Partnership of TEDCO, the Abell Foundation, and the France-Merrick Foundation – Capital commitments of $4.3M – Up to $250K in angel investment – Early stage technology company in Baltimore City – Lead investments with at least 50% matching investment required – Viable exit within 4 to 7 years – Typically post TCF

59. For further Propel Baltimore information Randy Domolky Managing Director TEDCO Capital Partners rdomolky@tedco.md (410)715-4180 www.tedco.md

60. Entrepreneurial Assistance – Achieving the Commercialization of Technology in Ventures through Applied Training for Entrepreneurs (ACTiVATE) – INNoVATE entrepreneurship and business development leadership training – Maryland Entrepreneur Resource List (MERL) – The Maryland Rural Business Innovation Initiative (RBI 2 ) – TEDCO Portfolio Workshops & Webinars – Maryland Biotechnology Center – Small Business and Technology Development Center (SBTDC) network

61. Benefits of TEDCO Funding – Access to business and technical assistance – Access to Venture Capital, Angels, and strategic partners – Publicity through TEDCO press releases – Recognition and reputation of state programs – Workshops for TEDCO funded companies only Meet one on one with experts Network with other companies

62. 3 rd Entrepreneur Expo

63. Thank you, Ronald Kaese Director, Federal Programs rkaese@tedco.md (410) 715-4170 Veteran’s Day weekend November 11 th Throughout the area: Parades / Celebrations / Museums / Sites