1. austin technology incubator New Strategies for the 21 st Century Incubator Presented by: Erin Defosse Former Director Austin Technology Incubator REV XXXX

3. Texas: a US Economic Powerhouse Texas recently named #1 state to do business in the US –Emerging Technology Fund to drive high tech startups Texas is the #1 exporting state with $129 billion in exports Texas is the 8 th largest economy in the world Texas is the #2 state in high tech –High tech sector employs over half a million workers –Generates near 1/3 of all export revenue Texas has 32% lower tax burden than the US national average –No state income tax

5. Austin: “Silicon Hills”

6. Austin is one of the Major Technology Hubs in North America Austin is the #1 “wired” city in the US (Forrester Research - 2005) Austin is the #3 wireless city in the US (Intel - 2005) “Silicon Hills”: home to many headquarters* and design centers of excellence for all major global semiconductor companies –AMD**, Applied Materials, Arm, Cirrus Logic*, Freescale*, IBM, Intel, Marvel, QUALCOMM, Samsung, SigmaTel*, Silicon Labs*, Texas Instruments, etc. Home to a multitude of major software and hardware companies –Dell Computer*, IBM/Tivoli, Apple, Cisco, Vignette*, BMC, Nokia, Oracle, Sun, Trilogy*, National Instruments*, Motive*, Motorola, etc. Home to The University of Texas at Austin – one of the largest universities in the United States

7. Austin Technology Incubator Founded in 1989 as a program of the IC2 Institute at The University of Texas at Austin Non-Profit Business Model 2800 square meter facility ~ 20 Companies

8. ATI’s Results to Date >160 graduate companies >$750 million in investment capital raised 4 Initial Public Offerings on NASDAQ ~25 acquisitions ~35 independent, profitable companies >$1.5 billion in annual revenues >10,000 jobs created by ATI companies

9. Austin’s Evolution Since 1989 University and State Government Town Few technology based startups Few venture capital sources Immature support ecosystem No developed technology clusters Regionally focused economy Diversified economy with large tech presence Technology startups are commonplace At times received >50% of all venture capital invested in Texas Well developed support ecosystem Several developed technology clusters Increasingly globally focused economy 19892009

10. Austin is now the incubator! The 21 st century incubator model must reflect this new reality!

11. Value to today’s entrepreneur Incubator Start-up infrastructure support Market Making Sector Specific Acceleration (clean energy, wireless) Example services offered to entrepreneurs Office space Professional services facilitation General capital networks Business advice High-touch coaching & mentoring “Virtual Board” Target capital matchmaking University resources Access to “chokepoint” technologies, key customers Time 1989 From Incubator to Accelerator and Beyond

12. Sector Specific Acceleration: the New Model for ATI Sector focused accelerators led by industry experts “High touch” coaching and mentoring Establish corporate partnerships with global reach Factor global customer strategy into business plan Wireless Clean Tech IT Life Sciences ATI

13. Sector Specific Coaching and Mentoring Structured, not informal Focused on business strategy, not tactical fundamentals Industry experienced incubator staff Advisory Board of industry experts Board level accountability with companies

14. Structured Coaching and Mentoring Process Screen Vet Internally Vet Externally Set Milestones Review Admit into ATI Graduate or Leave ATI Industry Sector Focused Advisory Board ATI representative on Company Board Up to 3 years Quarterly Reviews

15. The Sector Focused Advisory Board Current or retired executives with significant experience in the sector –Business leaders, venture capitalists, technologists No compensation from incubator Screen applicants and review company performance Appoint representative to the Company’s Board

16. Market Making, the Next Phase of Value from ATI Entrepreneurs Significant need for test resources, customer pull Access to test facilities, key early adopter customer Novel, targeted technologies/solutions Looking for new clean technologies to further its mandate to offer green choices to customers

17. Conclusion: the Incubator must Evolve to Provide more Value Incubators in innovation centers like Austin must redefine their value proposition if they are to stay relevant in the marketplace –Develop industry sectors practices –Implement high touch coaching and mentoring –Engage in market making activities to accelerate the success of startups

18. Contact Information Erin Defosse erin@defosse.org +1 (512) 799-8797

19. austin technology incubator