MISSION: To accelerate the growth of the entrepreneurial MISSION: To accelerate the growth of the entrepreneurial innovation economy in America The following represents a preliminary framework on how to finance and bring together organizations, networks, and resources involved in growing the nation's entrepreneurial innovation economy A private-public partnership such as Innovation America could be an innovation intermediary for facilitating this process between, State, Federal, University, Foundation and Private Sector stakeholders. There is an opportunity to leverage successful federal SBIR recipients as well as state and regionally funded early-stage, high-growth growth technology companies We believe that this is an important MISSING ingredient in the long-term health of America's Competitiveness and Technology Innovation leadership

INNOVATIVE SMALL BUSINESS FACTS Innovative small business have generated 60 to 80 percent of net new jobs annually over the last decade Employ 30 percent of high-tech workers, such as scientists, engineers, and computer workers SMEs produce 13 to 14 times more patents per employee than large patenting firms Small Companies are a key source of innovation by themselves and for Large Companies Source: Small Business Administration INNOVATION CAPITAL FACTS Proof of Concept, Start-up, and Seed stage companies lack investment support Most Seed stage firms need investments of $500K - $2M The average venture capital investment today is $8.3M Source: PriceWaterhouseCoopers – MoneyTree©

INNOVATION CAPITAL LIFECYCLE Proof of Concept / Pre-Seed Start-Up Early-Stage Later Stage Discovery Expansion

NATIONAL INNOVATION SEED FUND U.S. Federal Agency National Innovation Seed Fund $2 billion fund National Seed Fund of Funds 50 Seed Funds $1.8 Billion Innovation Capital Technical Assistance Grant Fund $200 Million 50 State/Regional Innovation Seed Funds Receive approximately $10-15 M direct investment from NISF Has to match with $1 from other third parties Awarded on early-stage innovation focus and experienced managers Leverages successful federal SBIR recipients and like or similar state and regional investment programs Federal Government is a Financial Partner Available to both NISF funds Grants are used to provide support and technical assistance to fund managers, portfolio, companies & entrepreneurs The National Public-Private Partnership would administer the Innovation Capital Technical Assistance Grant Fund Approximately $200 M

National Innovation Advisor Federal Innovation Partnership NATIONAL INNOVATION FRAMEWORK Federal Innovation Partnership National Innovation Advisor Federal Technology Innovation Programs – SBIR, STTR, TIP, MEP, WIRED, FLC, EPSCoT, EPSCoR, NSF-PFI, NSF-IUCRC, NSF-Eng’g Resource Center, DOE-Ind’l Tech. Program Innovation Federal Capital Programs –CRA, CDFI, NMTC, NISF, SBIR, TIP Federal Innovation Partnership A National Innovation high-level Advisor performs an intermediary function with the existing and potential new federal innovation programs and also interacts with other national innovation initiatives Identify gaps in the US national innovation portfolio and make recommendations for new programs Current Federal budget for listed Technology Innovation Programs is approximately $2.7 - $3 billion Interacts with the National Public-Private Partnership and existing innovation associations and networks Leverages its technology innovation investment programs with state and regional like or similar programs Performance-based budgeting and measurement National clearinghouse of information and resources

Innovation America NATIONAL INNOVATION INTERMEDIARY Angel Capital Association (ACA)* Community Development Venture Capital Alliance (CDVCA)* National Association of Seed & Venture Funds (NASVF)* American Society of Mechanical Engineers (ASME)* State Science & Technology Institute (SSTI)* National Business Incubation Association (NBIA)* Association of University Research Parks (AURP)* Association of University Technology Managers (AUTM)* *Potential partnering innovation associations and networks National Innovation Intermediary A Public Private Partnership with a mission to accelerate the growth of the entrepreneurial innovation economy in America Intermediates partnerships with existing innovation associations and networks and federal technology innovation programs Manages & supports the listed programs Innovation America 501©3 Not For Profit Networking, Strategic Planning, Marketing & Branding Technical Assistance, Education, & Mentoring Technology, Economic & Workforce Development Investment Commercialization

Innovation America NATIONAL INNOVATION FRAMEWORK Angel Capital Association (ACA)* Community Development Venture Capital Alliance (CDVCA)* National Association of Seed & Venture Funds (NASVF)* American Society of Mechanical Engineers (ASME)* State Science & Technology Institute (SSTI)* National Business Incubation Association (NBIA)* Association of University Research Parks (AURP)* Association of University Technology Managers (AUTM)* *Potential partnering innovation associations and networks Federal Innovation Partnership U.S. Federal Agency Innovation America 501©3 Not For Profit National Innovation Seed Fund $2 billion fund National Innovation Advisor Innovation Federal Capital Programs –CRA, CDFI, NMTC, NISF National Seed Fund of Funds 50 Seed Funds $1.8 billion Innovation Capital Technical Assistance Grant Fund $200 million Federal Technology Innovation Programs – SBIR, STTR, TIP, MEP, WIRED, FLC, EPSCoT, EPSCoR, NSF-PFI, NSF-IUCRC, NSF-Eng’g Resource Center, DOE-Ind’l Tech. Program Networking, Strategic Planning, Marketing & Branding Technical Assistance, Education, & Mentoring Technology, Economic & Workforce Development Investment Commercialization

RECOMMENDATIONS Create a $2 billion dollar National Innovation Seed Fund (NISF) that consists of a Fund of Funds and a Technical Assistance Grant Fund. The Technical Assistance Grant Fund provides entrepreneurial support resources and services to portfolio companies and Fund Managers. Encourage the leveraging and coordination of Federal Technology Innovation Programs through a Federal Innovation Partnership with a new administration high-level National Innovation Advisor that has access to the President. Create a new Public-Private Innovation Intermediary with a mission to accelerate the growth of the entrepreneurial innovation economy in America and oversee the National Innovation Seed Fund. This intermediary would be a program partially supported by a U.S. federal agency like the Department of Commerce or the Small Business Administration.

Innovative Federal Capital Programs Community Reinvestment Act (CRA) Community Development Financial Institutions (CDFI) New Market Tax Credits (NMTC) National Innovation Seed Fund (NISF) Federal Technology Innovation Programs Small Business Innovation Research (SBIR) Small Business Technology Transfer (STTR) Technology Innovation Program (TIP) Manufacturing Extension Program (MEP) Workforce Innovation in Regional Economic Development (WIRED) Federal Laboratory Consortium (FLC) Experimental Program to Stimulate Competitive Technology (EPSCoT) Experimental Program to Stimulate Competitive Research (EPSCoR) Partnership for Innovation (NSF-PFI) Industry University Cooperative Research Center (NSF-IUCRC) Engineering Resource Centers (NSF-ERC) Industrial Technologies Programs (DOE-ITP)

Examples of Existing Innovation Associations and Networks ACA Angel Capital Association Lenexa, KS http://www.angelcapitalassociation.org/ The mission of ACA is to increase the success of member angel groups. ACA accomplishes this mission by providing professional development, best practices, networking and collaboration opportunities for angel investors who belong to member angel groups. ASME American Society of Mechanical Engineers Washington, DC & New York, NY http://www.asme.org ASME was founded in 1880 and is a global not-for-profit professional organization with 127,000 members. It promotes the art, science, and practice of mechanical and multidisciplinary engineering and allied sciences. ASME has recently created the Center for Engineering, Entrepreneurship, and Innovation. AURP Association of University Research Parks Tucson, AZ http://www.aurp.net/ The mission of AURP is to promote the development and operations of research parks that foster innovation, commercialization and economic competitiveness in a global economy through collaboration among universities, industry and government. AUTM Association of University Technology Managers Chicago, IL http://www.autm.net/ AUTM was founded in 1974 as the Society of University Patent Administrators with the objective of addressing a concern that inventions funded by the U.S. government were not being commercialized effectively. AUTM has grown beyond this single objective and now provides professional development and networking opportunities for technology transfer professionals at all career levels and CDVCA Community Development Venture Capital Alliance New York, NY http://www.cdvca.org/ CDVCA promotes use of the tools of venture capital to create jobs, entrepreneurial capacity and wealth to advance the livelihoods of low-income people and the economies of distressed communities. CDVCA is the network for the rapidly growing field of community development venture capital (CDVC) investing. CDVC funds provide equity capital to businesses in underinvested markets, seeking market-rate financial returns, as well as the creation of good jobs, wealth, and entrepreneurial capacity.

Examples of Existing Innovation Associations and Networks NASVF National Association of Seed and Venture Funds Philadelphia PA http://www.nasvf.org/ NASVF is an organization of innovation capital leaders: private, public and non-profit organizations committed to building their local economies by investing in local entrepreneurs. NASVF began in 1993 as an ad-hoc group of practitioners seeking the best models to encourage capital formation in their states, particularly for new technology ventures In 1997 it formally incorporated as the National Association of State Venture Funds. The name was changed in 2000 to reflect the expanding service to private sector funds and programs. NBIA National Business Incubation Association Athens, OH http://www.nbia.org/ The mission of NBIA is to be a clearinghouse for information on incubator management and development issues and on tools for assisting start-up and fledgling firms. NBIA provides thousands of professionals with the information, education, advocacy and networking resources to bring excellence to the process of assisting early-stage companies worldwide. The association is composed primarily of incubator developers and managers, but technology commercialization specialists, educators and business assistance professionals are also well represented. While a preponderance of NBIA’s 1,900-plus members represent U.S. incubators and friends of the industry, NBIA members also come from 58 other nations. SSTI State & Science Technology Institute Westerville, OH http://www.ssti.org/ SSTI is a national nonprofit organization that leads, supports and strengthens efforts to improve state and regional economies through science, technology and innovation. SSTI offers the services that are needed to help build tech-based economies. Since its inception in 1996, SSTI has developed a nationwide network of practitioners and policymakers dedicated to improving the economy through science and technology. SSTI assists states and communities as they build tech-based economies, conduct research on best practices and trends in tech-based economic development, and encourage cooperation among and between state and federal programs.