1. U of L Entrepreneurship Law Clinic 1

2. “The Design Squiggle”

3. The Kentucky Innovation Network supports start-up and existing companies through the concept and development phases, including: – Intellectual property and technology assessment – Business development consultation – Business model consultation – Market assessment and customer validation – Access to service providers and professional networks – Connections to potential suppliers/business partners – Assistance with identifying and securing funding (i.e. private i.e. angel/venture, public, etc.) – Coaching throughout fundraising efforts – Organizing and hosting networking opportunities Purpose of the Kentucky Innovation Network 3

5. The Business Model Canvas

6. Established in 2004 50+ accredited investors Provides early stage equity capital to start-up and/or expanding companies Helps commercialize research conducted at Kentucky universities Promotes and enhances entrepreneurship in the Kentucky business community Helps create economic growth and jobs in the Bluegrass Provides members with an attractive financial return

7. BGA Membership AREAS OF MEMBERS’ EXPERTISE Consulting Energy Finance Government Healthcare Legal Manufacturing Real Estate Software Venture Capital E-Commerce Marketing Bio/Life Science 7

8. 8 Three Sidecar funds have been established providing over $9.5 M in funding Since 2006 approximately 40 companies have received at least one investment (some multiple) from these Funds Average initial investment between $100k - $200K

9. Regional Angel Groups & VCs Angel Groups & Early-Stage Investors Bluegrass Angels, Lexington Bluegrass Angel Venture Fund III, Lexington Commonwealth Seed Capital Connetic Fund, Northern Kentucky Enterprise Angels, Louisville Enterprise Angels Fund, Louisville Kentucky Angels, statewide Lincoln Trail Venture Group, Elizabethtown Louisville Angels, Louisville Marshall Fund, Owensboro Tri-State Angels, Ashland Queen City Angels, Cincinnati Yearling Fund, Louisville Venture Capital Funds Allos Ventures, Cincinnati Blue Chip Ventures, Cincinnati Chrysalis Ventures, Louisville Kentucky Highlands Investment, London River Cities Capital Funds, Cincinnati Triathlon Medical Ventures, Cincinnati

10. Companies Assisted 10

12. 12 The Kentucky Angel Network (KYAN) is comprised of “accredited investors” under SEC rules. Self certification via KYAN membership application. No fee to join the KYAN KYAN meets the last Tuesday of every month via the Go To Meeting online platform

13. KY Angels Network Portfolio Companies Presenters 13 Since January 2014 KY Angel network has heard 27 company presentations from across the state. 22 of these companies have received follow-up interest from Network investors Approximately 33% of these companies have received additional investment of close to approximately $1M. www.kyangels.net

14. Kentucky Angel Investor Tax Credit Program 14 Available to accredited investors as defined under SEC rules who make an investment of a minimum of $10,000 or more in a qualified small business engaged in a qualifying business activity. If the investment is in a business in an “enhanced incentive county” the investor may be eligible for up to a fifty percent (50%) tax credit on their Kentucky income tax return and for businesses located in all other counties may be eligible for up to a forty percent (40%) tax credit. A tax credit may be transferred by a qualified investor to an individual taxpayer. Annual cap of $3M

15. Kentucky Angel Investor Tax Credit Program (cont.) 15 Qualifying business activity includes knowledge based activity in the following areas: Bioscience Environmental and Energy Health and Human Development Information Tech Advanced Manufacturing

16. Community Resources and Networking Events Co-founded with Commerce Lexington Brings together entrepreneurs, investors & service providers 5 Across Pitch competition 5 rounds. Competition finals held in December Teams compete for $5K. 16

17. PERSPECTIVE Entrepreneurs Bootcamp Full semester, no academic credit Student teams working on real world projects Community/UK instructors & mentors Business Model Canvas & Investor Pitch deliverables Opportunity to compete in regional & national competitions Open to all students on campus – application required $500 stipend offered exclusively to Bootcamp students for development Applications for Fall 2016 Bootcamp opened in early August – 19 projects! This year Bootcamp enrollment is open to all students & community entrepreneurs

18. PERSPECTIVE Mentors & Inventors Ben Self Founder West Sixth Brewing Heather Howell Director of Innovation Brown-Forman Tendai Charasika CEO SuperFanU LaShana Harris Founder Babylocity Chris Young Entrepreneur Investor Cynthia Bohn Owner Equus Run Vineyards Lumy Sawaki Associate Professor UK - Rehabilitation Wells Bullard Vice President Bullard More than 70 community & UK mentors have volunteered to help Joseph Zwischenberger Chair Surgery UK HealthCare

19. How can attorneys be of assistance to start ups? Listen very closely to the client and talk in layman’s terms avoiding legal jargon 19

20. How can attorneys be of assistance to start ups? (cont.) Listen for closely to your client for specific needs. Some common issues Type of funding needed – Loans, equity, non dilutive grants, etc. Type of clients/customers which company will serve Technology/Products that are being developed Specific regulatory Issues Intellectual Property Issues Human Resources – Types of Employees: Salary/Hourly/Independent Contractors – Management/Employee performance incentives

21. How can attorneys be of assistance to start ups? (cont.) Initial structuring of the company (based on goals/needs of the startup) Development and drafting of funding documents, terms sheets, etc. Assisting in the identification of potential IP and regulatory issues Being able to provide early consultation on pro bono basis – Clearly set expectations up front and limit pro bono time provided – Prior to meeting you should assign homework to the client so that they come prepared to meetings

22. How can attorneys be of assistance to start ups? (cont.) Consider in lieu of or as a part of your fee, potentially taking equity in early stage of the companies. Get involved in your entrepreneurial community by volunteering! – Be a mentor, competition judge, advisor. etc. 22

23. Questions?? 23 Warren O. Nash, III warren.nash@uky.edu