1. Investing in California SBIR Companies CSA / RTTC management of venture capital firms Prepared by: CSA Ad hoc Investment Committee October 8 th, 2005

2. Congressional Research Service Perspective [NASA’s SBIR and STTR] programs will focus on the development and support of mechanisms to ‘accelerate and augment development of mission relevant SBIR technology for NASA missions’ as well as on efforts to move SBIR technology into the marketplace. To this end, NASA intends to propose statutory changes to permit the application of SBIR funds, matched by private sector money for ‘post-phase II dual use technology development.’ Current law allows agencies to use government funds, but not those dedicated to the SBIR activity, to commercialize SBIR technologies necessary to achieve mission requirements. [1] [1] [1] Smith, Marcia S., Daniel Morgan and Wendy H. Schacht, The National Aeronautics and Space Administration’s FY2004 Budget Request: Description, Analysis, and Issues for Congress, CRS Report for Congress, Order Code RL31821updated September 23, 2003, page CRS-46.

3. NASA Spin-Off and Spin-In Comparison NASA Research and Technology Development Programs License Deals Knowledge/Technology Dollars SBIR/STTR Contracts Dollars Knowledge/Technology Space Act Agreements Dollars Knowledge/Technology Spin-In Partnerships Knowledge/Technology Dollars Traditional Spin-OffNew Spin-In Key

4. NASA Partnership Mechanisms Proposed Spin- LicenseSBIR In Agreement Value to NASA Royalties Technology Matching funds/ technology NASA Funding None Ph I: 70K No limit Ph II: 600K Start-up Time est. 6 mos. Ph I: 12 mos. est. 6 mos. Ph II: 24-30 mos. Source of Funds Company NASA SBIR NASA/company operating funds Term of Agreement Negotiable 30-36 mos. Negotiable

5. SBIR/STTR Phase II Pool for Strawman Spin-In Model Year Number of Awards Nationally NASA MDA AF DARPA 2003 162 98 301 34 2002 145 244 263 85 2001 151 57 250 54 2000 144 78 241 56 1999 145 51 196 56 Total 747 5281251285 Grand Total2811 awards (California ~20%)

6. Ad hoc Committee Activities Initial Conference Call (Dozier, Gallo, Zeller) WebEx Sessions Held  Framework for Investment Considerations (Dozier, Gallo, Zeller)  Alameda Venture Capital Investment Perspective (Rich Helfrich, Managing Director)  Venture Capital SBIR Perspective Refinement of SBIR Perspective (Rick Shindell, National SBIR Expert) CSA Board Status Report

7. Findings California SBIR Phase II awards is a viable market size Focus on Bio, Nano, Info Technology with space as the Integrator Creation of special fund has been done before  $200 million of Willie Brown / (California First)  PERS Version in progress Need to find credible public face