1. U of MN Discovery Capital

2. The Discovery Capital Program
Problem: financing University start-ups is difficult
Lack of seed/early stage capital affects our most valuable, disruptive technologies
Solution: Discovery Capital seed funding program
Participate in the first round of invested money into the opportunity
Proof-of-Concept Funding; $25K - $50K prior to exiting the UMN
Seed Funding; Up to $350K in matching investment in NewCo
Benefits
Shorten the time to commercialization and time to cash flow from the license agreement
Attracts stronger outside management --- increasing probability of success and speed to market
Details
Selected participation; estimating 2 – 3 investments per year
Qualified by external, sector and business experts
Funded from OVPR licensing revenue

3. UMN Discovery Capital - Unique Program
External Guidance from Experts
Strategic Advisory Board
Domain Advisory Boards (domain experts)
Medical Device
Pharmaceuticals
Engineering and Physical Sciences
Software and Services
Energy and the Environment
Food and Agriculture
University Administration
OVPR/OTC Oversight and Administration
Office of Investment & Banking Support

4. Domain Advisory Board Members
Medical Device
Bill Murray
Warren Watson
Danny Sachs
Scott Augustine
Karen Larson
Pharmaceuticals
John MacDonald
Kathy Tune
Bill Brown
John Santini
Barbara Nelsen
Software and Services
Tom Kieffer
Jeff Hinck
Chris Heim
Michael Gorman
Dan Ryan
Engineering and Physical Sciences
David Reamer
Brian Bischoff
Todd Ortberg
Paul Orzeski
Mark Marlow
Energy and Environment
Doug Cameron
Paul Bieganski
Ed Cannon
Tom Halverson
Food and Agriculture
Rolf Engh
Tom Erickson
Joel Nelson
David VandenEinde

5. Strategic Advisory Board Members
Doug Baker – EcoLab CEO
Frank Berman – former Regent
Todd Brooks – Entrepreneur
Leslie Frécon – LFE Capital
Erwin Kelen – Kelen Ventures
John Lindahl – Norwest Equity Partners
Dick Lindstrom – Entrepreneur, Physician
Ravi Norman – Entrepreneur
Tom Olson - Entrepreneur
Jeff Sheldon – Med Device Entrepreneur
Ed Spencer – Affinity Venture Capital
Eric Torgerson – Investor, Private Equity

6. What is Changing in the Policy
Allows the UMN (via OIB) to invest cash in individual companies
Clarifies how returns from cash investments will be distributed
Separate from license agreement returns
Changes our ability to participate on the company’s board of directors

7. Discovery Capital Program - Overview
Potential Start-ups
Independent UMN Start-up
Company
Company Pitch
Company Pitch
Follow-on
Seed Funding
$50K - $350K
Pre-startup
Seed Funding
$50K - $350K
(matching)
Proof of Concept Funding
$25K - $50K
UMN OTC/OVPR and OIB Deal Team
Administration and Final Decision
Domain Advisory Board
Insight, Recommendation and Support
Strategic Advisory Board
Strategic Direction and Support

8. Discovery Capital as part of Seed Investment
Equity Split Example; Seed Stage
Discovery Capital as part of Seed Investment
Seed Investors
UMN License Equity
Faculty as part of Mgmt
Company Mgmt