1. 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: 972-883-4919www.ntxrcic.org Mentor Program Orientation Regional Center for Innovation & Commercialization (RCIC)

2. 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 Agenda Emerging Technology Fund (ETF) N. Texas RCIC ETF process & timeline Evaluator role Mentor role Next steps

3. 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 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.

4. 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 “The Gap”

5. 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 ETF Regions and RCIC’s Texas Life Science CIC (statewide) El Paso / Trans-Pecos RCIC West Texas Coalition for Innovation and Commercialization North Texas RCIC Central Texas RCIC Gulf Coast RCIC South Texas RCIC Rio Grande RCIC

6. 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 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 64 Institutions 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.

7. 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 ETF Fund I Awards Research Superiority StateN. 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

8. 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 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 –3 rd such Center in the US TxAIRE Project (UT-Tyler) $ 3.7M Medical Fluorescence (UNTHSC-FW)$ 2.3M Total $16.0M

9. 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 Research Matching Grants Matches external applied R&D funding for development of emerging technologies with substantial commercial potential. Awarded: –Global Contours (Rockwall)$0.9M

10. 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 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

11. 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 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!

12. 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 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

13. 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 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.

14. 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 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

15. 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 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

16. 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 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

17. The Process & Timeline

18. 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 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

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. 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 Key Dates for Round 2.2 21-Aug-07Release Request for Proposals 31-Oct-07Evaluators identified, Conflict of Interest Forms completed 06-Nov-07Early application submission encouraged 13-Nov-07Applications and fees due to NTXRCIC (5:00 p.m.) 15-Nov-07Email to Evaluators for conflict of interest with Applicants »Email to Applicants – proposal received, conflict with Evaluators »Application feedback begins 27-Nov-07Quick Pitches with all applicants 03-Dec-07Pass/Fail Phone Call (2:00) – begin debrief of ‘F’ Candidates ‘F’ Feedback Forms Due from Evaluators Shortly. 18-Dec-07Scored Applications Due from Evaluators (L/S deals forwarded) 03-Jan-08Regional Orals Dry Run 08-Jan-081:1 orals with North Texas RCIC and Top Candidates 15-Jan-08NTXRCIC reviews ranked proposals with NTXRCIC Regional Board 24-Jan-08State Orals Dry Run 01-Feb-08NTXRCIC submits recommended proposals to State ETF committee 07-Feb-08Applicant Presentation Day-Austin 21-Feb-08State ETF Committee meets to review proposals 22-Feb-08State ETF Committee recommends to Governor, et al.

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 3 rd 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. 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 Next Steps Must sign Conflict Of Interest policy Mentor Application? Get password and access to applications First meeting: Quick pitches on Nov 27 th

23. 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: 972-883-4919www.ntxrcic.org For additional and current information, forms, frequently- asked-questions, etc. see: www.ntxrcic.org or www.emergingtechfund.com