September 5, 2013 Growing Missouri’s Economy Through Innovation and Entrepreneurship

September 5, 2013

Growing Missouri’s Economy Through

Innovation and Entrepreneurship

EMERGING STARTUP ACTIVITY IN THE KANSAS CITY REGION

Cameron CushmanManager of Entrepreneurship

Ewing Marion Kauffman Foundation

EWING MARION KAUFFMAN

“Foster a society of economically independent individuals who are engaged citizens, contributing to the improvement of their communities."

OF THE 12 PEER METROS WE TYPICALLY COMPARE OURSELVES TO, KANSAS CITY COMES IN LAST IN EMPLOYMENT GROWTH SINCE LAST FEBRUARY. KC’S RECENT EMPLOYMENT NUMBERS PAINT A GLOOMY PICTURE, JEFF PINKERTON, MID AMERICA REGIONAL COUNCIL, 2013

1 MILLION CUPS STARTUPS

INC. 500/5000

DEALMAKERS NETWORK

“Every individual that we can inspire, that we can guide, that we can help start a new company, is vital to the future of our economic welfare.”

- Ewing Kauffman

Democratizing Entrepreneurship

Public-private partnership created by the Missouri General Assembly to lead efforts to promote entrepreneurship and foster the growth of new and emerging high-tech companies

Focus on 21st Century bioscience industries

related to Missouri’s rich history in agriculture Board of Directors includes individuals

appointed by Missouri’s Governor, Speaker of the House, and President Pro Tem of the Senate, and includes the President of the University of Missouri system and the Director of the Department of Economic Development

About MTC

Missouri Building Entrepreneurial Capacity Program (MOBEC) Through the MOBEC program, MTC makes strategic

investments in non-profits that expand the support system for entrepreneurs that are commercializing new technologies or that enhance the capacity of Missouri to grow its innovation economy

IDEA Fund

The IDEA Fund promotes the formation and growth of businesses that engage in the transfer of science and technology into job creation

MTC Support Programs

Animal Health

Applied Engineering

Biomedical Science

Defense and Homeland Security

Plant Science

MTC Areas of Focus

Digital and convergence media

Information technology

Creative content

Clean energy

Advanced manufacturing

MTC Area of Focus – Applied Engineering

Missouri IDEA Funds

Missouri IDEA Funds

On March 22, 2011, Missouri Governor Jay Nixon announced the launch of the $21 million IDEA Seed and Venture Capital Funds initiative that will support the growth of entrepreneurs and high-tech companies.

7 competitive funding rounds completed 219 applications submitted $131 million in co-investment funds requested 77 authorized projects totaling $20.4 million in

IDEA Funds Nearly 40 companies closed and funded in

excess of $11 million raising leveraged capital in excess of $50 million

Missouri TechLaunch Seed Capital Co-Investment

Program Venture Capital Co-Investment

Program

High-Tech Industrial Expansion Program

IDEA Seed and Venture Capital Funds

Pre-Seed Stage Financing Accelerate the commercialization of research

discoveries

Experienced Leadership Industry/Technology Commercialization

Matching Funds At least 100% Close and Transfer in a Syndicate

Viable Plan for Follow-On Financing or Sustainability

Missouri TechLaunch Eligibility

Funds may be used for IP development and evaluation proof of concept work prototype design market studies related business activities

Typically issued as convertible debt

Missouri TechLaunch Awards

Seed Stage Financing Accelerate the commercialization of

research discoveries and growth of start-up companies




Seed Capital Co-Investment Eligibility

Funds may be used for advanced IP development and evaluation proof of concept work prototype design market studies key personnel hiring related business activities

Typically issued as convertible debt or equity

Seed Capital Co-Investment Awards

Venture Capital Stage Financing Accelerate the growth of start-up companies that

can be new Missouri-based corporate headquarters




Venture Capital Co-Investment Eligibility

Funds may be used for advanced IP development and evaluation proof of concept work prototype design market studies key personnel hiring related business activities

Typically issued as equity

Venture Capital Co-Investment Awards

Funds may be used for business expansion activities equipment construction key personnel hiring related business activities

Typically issued as secured low-interest debt

High-Tech Industrial Expansion Awards

Minimum of 1:1 cash match of new, private investment

Neither federal funds or in-kind contributions can be used as match to IDEA Funds

Matching funds to close in syndication with MTC investment

Matching Funds

MTC Investment Review Process

Application•Application•Preliminary Staff Review•Due Diligence and Scoring

Investment Committee Review •Highest-ranked Applications Reviewed by Investment Committee (unless exigent circumstances)•Funding Recommendations Issued

MTC Board Review •Board Considers Recommendations•Final Due Diligence and Definitive Documents

Tracking Outcomes•Awardees Report Outcomes for 10 years•Contract Compliance•Outcomes Monitored by Investment Committee

Missouri Building Entrepreneurial Capacity MOBEC

MOBEC Goals

Enhance the capacity of organizations to support entrepreneurs who are commercializing new technologies around which high-growth companies can be created

Enhance the capacity of Missouri research institutions to attract competitive federal and private research funding and centers

Enhance research and commercialization efforts in the targeted high-tech industry clusters of animal health, plant science, biomedical science, applied engineering and defense and homeland security; and

Create sustainable high-paying, private sector jobs.

Program Guidelines

Eligibility

Non-profit entrepreneurial support and related organizations

Public or private non-profit Missouri research institutions- Including institutions of higher education

Matching Funds MOBEC grant funds should be matched by other

non-state funding sources

ARCH GRANTS IT ENTREPRENEUR

NETWORK

Arch Grants awards

$50,000 grants to entrepreneurs each year. Who will relocate to St. Louis for one year

Year two of the program received over 700 applications from start-ups in 39 states and 15 countries across the globe.

MOBEC funds used for program administration

ITEN has served over 220 start-up companies through its network of more than 70 private-sector mentors

Companies assisted by ITEN have raised over $70 million in financing

MOBEC funds used for program administration

MERCY RESEARCH AND

DEVELOPMENT

MISSOURI INNOVATION

CENTER

Research & development focused on bridging the gap between doctors and patients to create better medical devices and improved treatment procedures, eventually leading to higher quality of care for patients.

MOBEC funds used to help commercialize new products

MIC operates the MU Life Science Business Incubator at Monsanto Place, which offers biomedical and life science wet labs and engineering suites for startup companies.

MOBEC funds used to build additional wet lab space