1. The Seed Capital Investment Program: Navigating the Arkansas Risk Capital Landscape

2. Seed Capital Investment Program Funding History In 1985, SCIP investment fund was established as a Revolving Cash Fund with $1.8 million In 2005 the General Assembly and Governor supported an appropriation of $292,653/yr in General Revenue Funds (GRF) to the Authority for seed capital investments. In 2010 the Governor released $700,000 in General Improvement Funds (GIF) to the Authority for investment in IA clients.

3. AgencyProgram ASTATech Transfer Assistance Grant (SBIR Phase 0) Federal Small Business Innovation Research (SBIR Phase I and II) ASTATechnology Development AEDC/ADFA/ASTAEquity Investment Tax Credit & R&D Tax Credit ASTASeed Capital Investment Program (Part A) ADFA/ASTA/AEDCRisk Capital Matching Fund (Validation) ASTASeed Capital Investment Program (Part B) ADFA/ASTA/AEDCRisk Capital Matching Fund (Enterprise Dev.) Major Risk Capital and Investor Incentive Programs

4. TTAG SBIR TDP R&DTC SCIP EITC RCMF

5. NanoMech as a Case Study ARP* (1996)$ 30,200 ARMF* (1999)$ 254,043 TTAG (10 since 2002) $ 37,500 R&D TC (2004)$ 591,362 SCIP (2007-9) $ 500,000 EITC (2008)$ 249,983 RCMF (2010)$ 500,000 $ 2,163,088

6. Development Introductory Growth Maturity Decline Sustain Successful Companies Growth Entrepreneurship Risk Capital Develop risk capital that is available for all stages of the business cycle, especially the funding gap. Encourage entrepreneurship and accelerated new enterprise development. Sustain successful existing industry through advancing technology and competitiveness. NanoMech 2011

7. Seed Capital Investment Program Funding Available for Investment Revolving Cash Fund $ 1,070,178.32 General Revenue Fund $ 292,653.00 General Revenue Fund $ 700,000.00

8. Seed Capital Investment Program Investment Portfolio Revolving Cash Fund $ 2,940,103.37 General Revenue Fund $ 1,458,120.92 General Revenue Fund $ 0.00

9. Revolving Cash Fund Investments Art Exchange (01-SCIP-06) $288,146.35 Audio Access (98-SCIP-02) $ 84,284.74 Bentonville Int'l Group (09-SCIP-02) $ 88,000.03 ContourMed, LLC (06-SCIP-01) $ 391,046.60 EquityNet (10-SCIP-17) $ 49,203.15 Immigreat Now (09-SCIP-09) $ 50,000.00 Integral Wave Tech(01-SCIP-05) $ 470,491.30 IZON (06-SCIP-02) $ 226,550.17 Konaware (06-SCIP-03) $ 491,500.61 Merit Builder (09-SCIP-08 GR/SC) $ 7,347.00 NanoMech - Duralor (10-SCIP-16) $ 499,134.80 Prophet Line (99-SCIP-02) $ 50,796.19 Transparent Visibility (10-SCIP-20 GR/SC) $ 7,347.00 Unity Ware (09-SCIP-15) $ 42,650.00 Vision Technologies (00-SCIP-04) $ 193,605.43

10. General Revenue Fund Investments Stage 1 Diagnostics (06-SCIP-04 SARs Inv.) $ 292,653.00 Accupal - MSTP (09-SCIP-03 GR) $ 99,131.34 Agri Research Init. (07-SCIP-17 GR) $ 93,994.00 Amer Defense Compon. (07-SCIP-01 GR) $ 97,551.00 AR Power Electronics (07-SCIP-02 GR) $ 97,551.00 Balm Innovations (09-SCIP-01 GR) $ 99,389.74 Infinite Energy LLC (08-SCIP-03) $ 97,551.00 Lynndale (08-SCIP-04 GR) $ 175,000.00 MeritBuilder (09-SCIP-08 GR/SC) $ 92,653.00 Silicon Solar Solutions (09-SCIP-13 GR)$ 200,000.00 Station X (08-SCIP-10 GR) $ 19,993.84 Transparent Visibility (10-SCIP-20 GR/SC) $ 92,653.00

11. Evaluating Risk Capital Investments Targeted Industries Match-Up Economic Impact Potential Market Feasibility Technical Feasibility Management Strength Production Feasibility Intellectual Property Financial Health SBIR/STTR Awards Syndicate Financing Level of Persistence IA Involvement

12. A Risk Capital “Formula” - Using Multiple Programs Simultaneous An early-stage technology company is seeking to raise $1 million in risk capital. – Seed Capital Funds could provide $250,000 with a matching investment of $750,000. The $250,000 could be part of the match for Enterprise Development Funds. – Enterprise Development Funds could provide $200,000 with a matching investment of $800,000. The $200,000 could be part of the match for Seed Capital Funds. – [The matching funds at this point would be $450,000 ($250,000 plus $200,000).] – An Equity Investment Tax Credit of 33% could leverage a private investment for the remaining $550,000 and generate a $181,500 tax credit for the investor.