1. ELEVATE VENTURES
IT’S NOT WHERE A START-UP STARTS. IT’S WHERE IT CAN GO.

2. 21 FUND – THREE EVOLUTIONS
Phase I (1999-2005) – facilitation of university-driven technology transfer into the commercial
sector
Phase II (2005-2009) – under the IEDC, company-driven technology-based product
development in the commercial sector
Phase III ( 2009-2011) – post financial crisis, company-driven acceleration of market entry and
creation of entrepreneurial wealth, economic impact and jobs
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3. 21 FUND – LEGACY PORTFOLIO
Sector Funding Counties Total Funding
Opportunities Represented Amount ($)
Academic Labs * 74 6 90.0 million
Life Sciences 51 12 66.0 million
Information Technology 38 12 47.1 million
Advanced Manufacturing 34 15 40.4 million
SBIR/STTR Matching 358 24 35.6 million
Total** 555 32 279.1 million
*University labs and Centers of Excellence were funded pre-dominantly before 2005.
** Only included closed opportunities with duly executed agreements,.
According to a 2010 Economic Impact Study by the Ball State University, 21 Fund
awards
o translated into over $1 billion invested in the development of Indiana’s high-
tech sector
o created over 11,000 near-term high-paying jobs
o made $427 million direct impact on Indiana’s real GDP, after subtraction of
opportunity costs
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4. 21 FUND – PORTFOLIO MAPPING
21 Fund Direct Awards SBIR/STTR Matching Awards
o Overall
conversion rate
is approximately
14% (or a 86%
rejection rate)
o 42 counties
submitted at
least one
application
o Of the 42
counties that
applied, 10 did
NOT receive an
award
o 4 counties (St.
Joseph,
Tippecanoe,
Monroe and
Marion) account
for over 70% of
the 21 Fund
awards.
Star size scaled to the percentage of total dollars
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5. WHY THE EVOLUTION NEEDS TO CONTINUE?
Despite 21 Fund’s continuing progression and contribution to Indiana’s entrepreneurial
growth, nationally competitive models have been able to demonstrate more
impressive metrics and results.
Jumpstart in Cleveland, OH-2010 Performance
o Engaged 37,300 entrepreneurs and community members-7,500 women or minority
o Approached by 8,307 entrepreneurs-1,412 women or minority
o Received 2,317 business plans from entrepreneurs-771 from woman or minorities
o Provided 87,750 hours of free assistance to entrepreneurs-21,800 hours to women or
minorities
o Invested $18.1 million in 49 companies-14 founded by women or minority
o Portfolio companies have raised $127 million-Leverage of 7x on the investment
o Reached annualized revenues of $30 million
o Created and supported 431 direct jobs
o Received 104 patents with another 152 in process
o One portfolio company was strategically acquired
o Generated economic impact of $267 million in the past four years
o Created 811 direct and indirect jobs
o Generated $12.1 million in taxes in 2009
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6. A TYPICAL ENTREPRENEURIAL VENTURE LIFE
CYCLE
Grants Friends
Angel Investors Seed Funds Venture Capital/Private Equity
Self Funding Family
Research Product
Idea Development Early Growth Rapid Growth Maturity
Core Technologies Development
o Entrepreneurs go through proof-of-concept and initial product build and validation phases
with research grants, self-funding, friends and family, and angel investors, usually in limited
amount of dollars.
o Entrepreneurs then partner with venture capitalists to target and launch products, scale up
product distribution, and achieve rapid revenue growth.
o Financial returns to entrepreneurs, other early-stage investors and venture capitalists are
achieved through initial public offerings or acquisitions of the ventures by strategic or later-
stage financial investors.
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7. VENTURE DEVELOPMENT CONUNDRUM STILL
EXISTS IN INDIANA
Research SBIR 21 Fund Gazelle
Grants STTR Investments
Self Funding GAP Angel Investors GAP Institutional Investors
Friends &Family Seed Funds
Research Product
Idea Development Early Growth Rapid Growth Maturity
Core Technologies Development
Federal $
Why is this a conundrum? State $
Private $
o Technologies and ideas are not fully commercialized due to lack of resources.
o Limited number of startup successes lead to perception of limited technology-based
entrepreneurial activities.
o Perceived lack of opportunities creates a roadblock for attraction and retention of talent, and
local and outside capital.
o Without talent and local and outside capital, more technologies and ideas will not fully
realize their economic impact and job creation potential.
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8. VENTURE DEVELOPMENT CONTINUUM
Venture Development Organization
Research SSBCI Angel SBIR 21 Fund Gazelle SSBCI High
Grants Funds STTR Investments Growth Lending
Self Funding Angel Investors SSBCI Seed SSBCI
Institutional Investors
Friends &Family Seed Funds Funds Enhancement
Research Product
Idea Development Early Growth Rapid Growth Maturity
Core Technologies Development
Federal $
How does a venture development organization transform this venture capacity
conundrum into venture development continuum? VDO $
Private $
o Address market confusion and identify a clear funding road map.
o Decrease the funding gap by leveraging public dollars into increased private
investments.
o Provide EIR assistance to compress company development cycle, leading to
accelerated economic and job creation impact.
o Increase visibility of Indiana gazelle companies to regional and national investors.
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9. ELEVATE VENTURES
As a tax-exempt non-profit state-wide venture development organization, is leading
the efforts to
o Implement best practices modeling after nationally recognized venture
development models, such as Jumpstart in Cleveland OH, i2E in Oklahoma City, OK,
Innovation Works in Pittsburg, PA.
o Provide entrepreneurs-in-residence and attract talent to assist companies with
building a strong base and moving down a path of exponential and sustainable
growth.
o Attract new sources of capital to increase outcomes, including formation of seed
funds and angel networks.
o Minimize administration costs and maximize investment returns to ensure
sustainability with active investment management.
o Monitor investments and ensure collection of metrics and compliance with federal
and state program guidelines.
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10. ELEVATE VENTURES’ E4 PROCESS
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11. RESOURCE ATTRACTION & RETENTION
Ideas &
Entrepreneurs
Federal and
Foundation
Support
Wealth Creation Ventures
Increased
Private &
Institutional
Investments
Economic
Job Creation
Impact
Angel
Networks
Growth in
Funding Economic
Gardening Successful
Ventures
Scalable Ideas
Entrepreneurial
Assistance
Coachable
Entrepreneurs
Elevate Ventures
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12. ACHIEVABLE OUTCOMES
o Quantitative
• A statewide angel network of at least 10 Hoosier communities $10
• Increased deal flow private
dollars
• Increased number of companies funded at the right time with the
right resources
• Increased amount of dollars invested state wide at the right stage
• Increased capital leverage of public dollars
• Growth in the number of successful exits
• Growth in wealth creation for entrepreneurs and investors
• Growth of employment in technology-based ventures
$1
o Qualitative public
• Nationally competitive project selection process dollar
• Nationally recognized venture development program with top-notch
entrepreneurs-in-residence
• Foster an environment and a culture that promote wealth creation
and intelligent risk-taking and a hub for talents in various sectors
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13. WHY THE STATE PARTNERS WITH ELEVATE
VENTURES
The State faces structural issues in funding innovative companies and stimulating
entrepreneurial ecosystem
o Experienced staff not available due to conflict and lack of incentive – Resource
Constraint
o Limited experience base and rigid funding structure restrict leverage of federal and
state dollars into co-investment opportunities with the private sources – Limited
Investment Base
o Dollars invested have supported business build, but no equity upside return potential
to the State for reinvestment – Lack of velocity
o Capital-only approach resulted in inefficiency in capital deployment – Limited
Efficiency or Accountability
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14. STATE’S PARTNERSHIP WITH ELEVATE
VENTURES ENHANCES SUCCESS
o Led by Howard Bates and Steve Hourigan with top-notch staffing including venture
partners, EIRs and Investment Managers – Experienced Team
o Leverage federal and state dollars to attract other institutional investors– Increased
Investment Base
o Wealth created for entrepreneurs, individual and institutional investors via
successful exits can be reinvested in Indiana companies– Increased Velocity
o Active asset management with direct accountability leads to greater return–
Maximized Accountability & Return
Unlike for-profit only investment managers, Elevate Venture’s non-profit venture
development approach adds additional value by:
o Clear focus on nurturing and developing Indiana-based high-potential
businesses into high-performing companies along the funding continuum
o Leverage to attract federal and philanthropic dollars and provide much-needed
entrepreneurial assistance to increase the probability of venture success
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15. CASE STUDIES
21 Fund’s most recent portfolio (2009-present) has already shown notable leverage
ratio since the private matching mandate was implemented in early 2009.
Sector 21 Fund Investment Follow-on Funding Leverage Ratio (X)
Information Technology $11,800,000 $63,900,000 5.42
Life Sciences $9,200,000 $46,100,000 5.01
Advanced
Manufacturing $3,800,000 $8,500,000 2.24
Total $24,800,000 $118,500,000 4.78
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16. CASE STUDIES
Scale Computing
o $2 million awarded by the 21 Fund in 2009
o Raised $17 million in late 2010, resulting in total of $31
million raised to date
Chacha
o $2 million awarded by 21 Fund in 2007
o Raised over $75 million to date
OrthoPediatrics
o $2 million awarded by 21 Fund in 2009
o Raised over $30 million to date
Immuneworks
o $2 million awarded by 21 Fund in 2008
o Entered into a strategic co-development partnership with
Lung Rx, a publicly-traded company in 2010, which
provides substantial funding for pre-clinical and clinical
work
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17. CASE STUDIES
Marcadia Biotech
o $2 million award by the 21 Fund in 2006
o Received $16 million in follow-on funding
o Secured development arrangements with Eli Lilly, Merck and Roche
o Acquired by Roche in late 2010 for $537 million
o Repaid 21 Fund $2.6 million per return provision in the Grant Agreement
o If 21 Fund award was structured as an investment vehicle, upon Marcadia’s 2010 exit,
estimated conservatively, the State would have received over $30 million in upfront cash
payment and potentially additional $26 million in milestone payments.
Endocyte
o Received nearly $4 million from 21 Fund before 2005
o Raised over $90 million in follow-on private funding
o Raised $75 million in an initial public offering in early 2011
o Raised $66.8 million in recent secondary public offering
o Due to the early grant structure, the State failed to capture any financial return.
o If 21 Fund’s $4 million was structured as an investment vehicle instead of grant, the
State’s holding would have be estimated at over $10 million at the IPO price.
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