1/20/2015

Mission

• To find nascent ideas and assist the originator in the creation of new ventures

• To enhance the success of early stage entrepreneurial technology companies in growing into going concerns

• To support the economic growth of the region

Vision

• To catalyze the creation of 40 new companies that employ on average 100 people within five years, creating 4000 new jobs.

• To be recognized as one of the five best regions in the United States for startups

Near Term Milestones

Incubator Manager Reach Break-even in

Incubator Operations Reach Break-even for

Start-Peninsula events Successfully lobby for

funding of super-computer

Further diversify sources of revenue

Increase revenue such that a receptionist can fit the budget

Successfully apply for Fab/Lab funding

Incubator Manager Continue engagement

on Science Park vision Continue development

of Entrepreneurship Clubs at regional universities

Recruit an additional five client companies by March 2014

Continue to engage strategic entities across the region in support of entrepreneurship

Committees

Incubator Manager

PTI Board of Directors

NIA Board of Directors

Advisory Board Review Committee

Advisory Board

Composed of local business leaders:HR – Anne Lise Gere – Owner Gere ConsultingEntrepreneurship – J.R. Locke – Director Hampton University IncubatorCapital Formation – John Paris – Managing Partner, Private Equity Practice, Williams MullenEntrepreneurship – Marty Kaszubowski – Director Center fo Economic Engagement, Old Dominion UniversityBusiness – Mike Kuhns – President Peninsula Chamber of CommerceAccounting – Paul DiNardo – Partner Wall Einhorn ChernitzerOnline Marketing – Tim Jones – Owner Eternal WorxEntrepreneurship – Tim Ryan – Director Triangle Business Innovation CenterFinance – Anne Shuford

Responsibilities Mentor Incubator clientsProvide expert assistance in their respective areas of expertiseBecome involved with funding Incubator clients

Investment Fund/Network

Establish a $2MM Seed and Angel level investment fund that can make 40 x $50K investments in the next 2-3 years and participate with other larger funds when appropriate***This continues to be a gap. Will focus on funding for startups in 2014***

Advantages to IncubatorOne more reason that businesses would seek our servicesAdds credibility with both investors and clients that the incubator would have skin in the game.Advantages to Incubator ClientsEliminates biggest reason new businesses fail is lack of access to capital

Establish an Angel network of 150 high net worth individuals who each pay $1000 per year to participate ($150,000 budget/yr) and commit to making one $10,000 investment during the three year period for a total of $15,000,000 over three years.

**This continues to be a gap. Will focus on funding for startups in 2015***

Copyright Peninsula Technology Incubator All Rights Reserved1

Regional Strategy: Ideation to Commercialization Pipeline

Funding

Because of competition between municipalities it is expected that we will operate largely on funds provided by the City of Hampton however other sources of revenue are materializing.

Other potential sources of funding include:1)Rent for Space estimated at approx. $30K2)Profit on Start Peninsula 3.0 estimated at $10K3)Proceeds from Grants from Federal EDAP program (unlikely but potentially larger $25K – $500K)4)Actual proceeds from SBA Grant ($50,000)5)We view matching contributions from Newport News as possible in the 2015 timeframe.

Funding cont’d

Funding Source Amount Percentage Amount Percentage Amount Percentage Amount Percentage Amount PercentageHampton EDA $50,000.01 56% $50,000.01 51% $0 0% $0 0% 100,000.02$ 53%Start! Peninsula 3.0 Sponsorships $20,630.11 23% $17,837.37 18% 38,467.48$ 21%SBA Grant $2,500.00 3% $15,527.15 16% 18,027.15$ 10%Rents Paid by Clients $9,152.90 10% $6,604.53 7% 15,757.43$ 8%Value of Subsidized Rent from NIA $7,464.38 8% $7,464.38 8% 14,928.75$ 8%Fees Paid for Accelerator Programming $0.00 0% $1,085.20 1% 1,085.20$ 1%Regional Efforts/Consulting $0.00 0% $1,000.00 1% 1,000.00$ 1%Interest $0.51 0% $1.41 0% 1.92$ 0%

Total $89,748 100% $97,433 100% $0 0% $0 0% $187,181 100%

* Value of Subsidized rent calculated as 3981 Sq Ft @ $10.50 vs $18.00 market rate3981 18.00$ 71,658.00$ 3981 10.50$ 41,800.50$

Annual 29,857.50$

Table DPERCENTAGE OF INCUBATOR OPERATING EXPENSES FUNDED BY HAMPTON EDA

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Totals

Client CompaniesTYPE

# Client Name SI/AI Level 0 Level 1 Level 2 Level 3 Level 4 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total

1 York and Whiting SI 1 3 1 42 Global Green Energy Alternatives SI 1 3 3 63 Laser and Plasma Technology SI 1 2 2 44 Pancopia SI 1 2 25 Flow Diagnostics SI 1 0 0

New Client Totals 0 1 2 1 0 8 8 0 0 16

TYPE# Client Name SI/AI Level 0 Level 1 Level 2 Level 3 Level 4 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total

1 SMD Corp SI 1 1 2 32 HIS Energy SI 1 37 45 823 Citadel Logic SI 1 3 6 94 EMB Infotech SI 1 3 2 55 US Education Gateway SI 1 5 1 66 CrossRope SI 1 29 23 527 FreePing (Formerly HeadCount) SI 1 44 43 87 Existing Resident ClientTotals 0 0 3 1 3 122 122 0 0 244

TYPE# Client Name SV/AV Level 0 Level 1 Level 2 Level 3 Level 4 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total In Out

1 Feedback SV 1 15 5 20 1

2 Jane Lockhart AV 1 36 36 1

3 Dianne Cesvette AV 1 36 36 1

4 Michael Cook AV 1 40 40 1

5 Myra Hicks AV 1 40 40 1

6 Steve Woll AV 1 36 36 1

7 Duncan Hamra AV 1 36 36 1

8 Will Jenkins AV 1 36 36 1

9 Landon Bland AV 1 36 36 1

10 Colin Coyle AV 1 18 18 1

11 Judy Bradby AV 1 40 40 1

12 Tom Spalthoff AV 1 36 36 1

13 Abigail Johnson AV 1 18 18 1

Totals 0 12 0 1 0 15 413 0 0 428 1 12

TOTAL ALL CLIENTS 0 13 5 3 3 145 543 0 0 688

Full-time Part-time Full-time Part-time Full-time Full-time Part-time Full-time Part-time

29 25 26 17 55 422 3 2 3 4 6

$6,000 $0 $03rd Qtr 4th Qtr

Actual Revenue Aggregate

Hampton Virtual in Aggregate

CLIENT STATUS

EST. REVENUES OF VIRTUAL CLIENTS 1st Qtr 2nd Qtr

EST. vs ACTUAL REVENUES OF RESIDENT CLIENTS 1st Qtr 4th QtrEstimated Revenue Aggregate

$18,000

CLIENT STATUS

CLIENT STATUSEXISTING RESIDENT CLIENTS

NEW RESIDENT CLIENTS

VIRTUAL INCUBATOR CLIENTS

2nd Qtr 3rd Qtr

HOURS ASSISTING CLIENTS

HOURS ASSISTING CLIENTS

HOURS ASSISTING CLIENTS

$897,500 $3,675,500

$24,000Total

$0

Part-time

3rd Qtr Total

HAMPTON

13

Total

$1,167,499 $1,997,886$830,387$1,127,500 $801,000 $849,500

2nd Qtr

Non-Hampton Virtual in Aggregate

4th Qtr

$0 $0

Virtual Clients in AggregateHampton Resident Clients in Aggregate

INCUBATOR CLIENT EMPLOMENT

107Total Number of Employees 59 48 0 0

1st Qtr

SuccessesIn the last year PTI affiliated companies have won the following awards:

•HIS Energy – Tech Cocktail’s - “Hottest Tech Startup in Baltimore” and "Hottest Startup in the Nation"•FreePing – Tech Cocktail’s - "Hottest Startup in DC", •Feedback - Inc. Magazine's - "Get Started NoVa" grand prize winner •Aesop Technologies - 1st Prize at Semper Startup and 1st Prize at Start Norfolk •Crossrope – Chosen by Babson College and Goldman Sachs to participate in 10,000 Small Businesses, the only company from Virginia to be selected

In the last three years PTI affiliated companies have won over $100,000 in prizes and received $590,000 in investment.  There is another $780,000 in investments expected in the next 90 days.

Last year PTI was named one of the top fifty accelerator programs in the United States by the Small Business Administration. It is interesting to note that the SBA application required us to look at metrics that we were not tracking. The companies we serve fall into the following demographics that are of interest to the SBA and may be of interest to the reader:

•18.2% of companies we serve are women owned•72.7% are minority owned•27.3% are Veteran owned•45.5% either manufacture or intend to manufacture a physical product

Summary

Problem Statement: It is more difficult to build a business in Hampton Roads, than in other localities. Therefore viable businesses are either stillborn or relocated to other municipalities where it is easier.

Corollary: This lack of new and exciting businesses with associated highly compensated jobs encourages our best and brightest to move to other areas (Research Triangle, NOVA and elsewhere)

Proposed Solution: Create an environment where it is easier for students and researchers to create high tech, exciting businesses, by easing access to capital, and expertise and therefore enhance the probability of succeeding in business in Hampton Roads.

Discussion / Thoughts ?