Dual Use Hawaii presents at the Hawaii Venture Capital Association Meeting

Slide 1: Hawaii’s Dual Use Companies Transitioning for Growth Hawaii Venture Capital Association September 13, 2006 Ian Y. Kitajima

Slide 2: The Message Federal R&D Funding has created Infrastructure Technologies Companies

Slide 3: The Message Next step is Sustainability, i.e., moving away from relying on federal R&D dollars at the current levels

Slide 4: The Message How we can achieve this is to focus on improving our… Competitiveness Commercialization Cooperation

Slide 5: The Message Next step: Dual-Use and VC Community “talking story”

Slide 6: The Opportunity Dual Use Companies  Technical People  Technology Focus Have less  Business People  Market Focus  Business models that are sustainable

Slide 7: A VC’s Top 10 List on Dual Use 10. My questions make no sense to them, they think I’m stupid 9. Small service providers and 8(a)s not setup to change the world 8. VC’s won’t fund commercialization within existing walls 7. Many should consider licensing, and forget 6. Most need a marketing person, asap 5. Understands gov’t contracting process but not the VC funding process 4. Manage multiple projects well, not setup to focus on one technology to commercialize. 3. Transition from collegial to entrepreneurial culture will be difficult. 2. Struggle to think beyond the gov’t customers 1. Focus more on technology dev, than on biz dev

Slide 8: Federal R&D Funding $4B RDT&E* 10 yrs *Research, Development, Test & Evaluation Source: Enterprise Honolulu Defense & Dual Use Strategic Plan

Slide 9: Federal R&D Funding $323.5M 63 RDT&E Projects in 2005 Source: Enterprise Honolulu Defense & Dual Use Strategic Plan

Slide 10: Other Data 2003 Rank Trend No of Defense DU Companies ~ 80+  Scientists & Engineers % of WF 65 / yr 15th  SBIR grant funding $3.5M / yr 24th  Patent Activity 75 / yr 49th Business created from UH R&D 1? 47th (2000-2002) Sources: HIPA 2005 Policy Review; University of Hawaii OTTED, U.S. Department of Commerce, Bureau of Economic Analysis; U.S. Department of Commerce, Census Bureau; National Science Foundation/Science Resources Study Division; U.S. Bureau of Labor Statistics; Milken Institute; National Venture Capital Association; U.S. Patent & Trademark Of.ce; U.S. Of.ce of Management & Budget; U.S. Small Business Administration.

Slide 11: Infrastructure - Created Source: Enterprise Honolulu Defense & Dual Use Strategic Plan

Slide 12: Technology - Created Navatek Teams With General Dynamics to Win $8.4 Million Navy USV Contract

Slide 13: Companies - Created

Slide 14: Sustainability – Next Step Competitiveness Commercialization Cooperation

Slide 15: How? Competitiveness – SBIRs/STTRs Commercialization - HTDV Cooperation – Federal Network

Slide 16: SBIRs/STTRs - Competitiveness  National competition of ideas  Seed funding for high-risk ideas  Due diligence by national experts  Reduce risks – technical, team, market  Non-dilutive capital  FFF (Friends, Family, FEDS)

Slide 17: SBIR Program Phase I – Funds Feasibility Study Phase II – Funds Prototype Phase III – BYOF, rights to sell

Slide 18: HTDV – Commercialization Hawaii Technology Development Venture 2 years 33 projects $7.4M

Slide 19: Federal Network – “Round um up”

Slide 20: Catalyst – EH Defense Industry Plan

Slide 21: Recommendation – Band Together Face Goliath alone? DAN

Slide 22: Recommendation – Band Together Trust & Teamwork Kawika

Slide 23: Talking Story Shared Nightmares Shared Dreams

Slide 24: About What? Technology Center  Recruiting & Retaining  Workforce Development  Business Development

Slide 25: “First Wed”  Social gathering to foster  Relationship building  Collaborations  Knowledge sharing  Focused on industry issues  Defined by industry  Driven by industry  Owned by industry

Slide 26: “First Wed”

Slide 27: Yahoo Groups List of Members Calendar Alerts File Uploads Links Polls Custom Database Photo Galleries Push to Email

Slide 28: What’s Next  First Wed (by invitation only)  October 4th  Sam Choy’s on Nimitz  7:30am to 9:00am

Slide 29: Questions? Ian Kitajima ikitajima@oceanit.com 808.531.3017

Slide 30: Extra Slides

Slide 31: Language Barrier Venture Community Dual Use Community Who’s the market, how big? Non-imaging SOI utilizing BD is cool! What’s the problem? Study the solicitation Who’s the competition? Good question Vitamin or Painkiller? The man wants a blue suit, turn on the blue lights Traction, Team, Technology Technology, Team, Traction

Slide 32: Language Barrier Venture Community Dual Use Community FFFs IR&D, Hi-CP Angels SBIRs/STTRs, CEROS, HTDV VCs NIST’s ATP, In-Q-Tel, Hi-CP Acquisitions / IPOs Acquisitions / Program of Record