Nwa forum presentation 062711


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Nwa forum presentation 062711

  1. 1. Building the ArkansasVenture Ecosystem<br />Jeff Amerine, PMP<br />Technology Licensing Officer<br />Adjunct Instructor, Entrepreneurship<br />University of Arkansas<br />Advisor, Innovate Arkansas<br />jamerine@uark.edu<br />
  2. 2. Introductions<br />The Global Innovation Race<br />What is Arkansas Doing to Win?<br />Recap / Q&A<br />Topics<br />
  3. 3. <ul><li>BS, US Naval Academy 1984
  4. 4. MS, Operations Management – U of A
  5. 5. EdD (in-process), Workforce Development – U of A
  6. 6. US Air Force Officer 1984-1990
  7. 7. System engineer, product manager, VP, CEO, CTO
  8. 8. 7 startup ventures
  9. 9. 3 Fortune 500s
  10. 10. U of A Technology Licensing Officer & Adjunct Instructor, Entrepreneurship
  11. 11. Staff Advisor, Innovate Arkansas
  12. 12. Manager & Investor, Gravity Ventures Arkansas</li></ul>Intros<br />
  13. 13. TLO Overview<br />University of Arkansas Technology Licensing Office<br />Access to 100+ technologies developed at the UA<br />Team of business and intellectual property professionals<br />Mission: <br />Commercialize world-class research to build a lasting knowledge-based economy to benefit Arkansas and the world.<br />http://www.uark.edu/ua/tlo/index.html<br />
  14. 14.
  15. 15. What Does IA Do?<br /><ul><li>Accelerate the technology commercialization process
  16. 16. Facilitate partnerships between firms, universities and economic development organizations
  17. 17. Prepare firms to obtain early-stage capital
  18. 18. Provide expert assistance in technology, business, organizational management and marketing
  19. 19. Advise with legal and intellectual property matters</li></ul>6<br />
  20. 20. IA Metrics<br /><ul><li>Approximately 100 knowledge-based client companies
  21. 21. Support for $49 million in capital raised in 2009-2010
  22. 22. IA process makes Arkansas companies “venture ready” </li></ul>7<br />
  23. 23. Why Do a Startup?<br />“I shall be telling this with a sigh <br />Somewhere ages and ages hence: <br />Two roads diverged in a wood, and I— <br />I took the one less traveled by, <br />And that has made all the difference.”<br />The Road Not Taken<br /> By: Robert Frost<br />
  24. 24. Entrepreneur Lifecycle: Who Are These People?<br />Crank Turners<br />Growth Leaders<br />Revenues<br />Adrenaline Junkies<br />$$<br />Expenses<br />Seed<br />Early<br />Growth<br />Mature / Expansion<br />Time<br />
  25. 25. Future “Economic Arms Race”: The Global Innovation Battleground<br />Arkansas’ Challenge and Opportunity<br />Innovation Section Topics<br />
  26. 26. What’s at Stake?<br />Innovative / entrepreneurial economies will prosper<br />Innovation accelerates and product lifecycles shorten<br />Capital and talent migrate toward innovative regions with high quality of life<br />Institutional unemployment occurs in stagnate regions<br />Government, business, and individuals compete globally based on their “innovation quotient (IQ)”*<br />* Source: Mochari, I., (2002) The Innovation Factor: What's Your Innovation Quotient?, Inc. Magazine Online.<br />
  27. 27. Innovation to Economic Growth Lifecycle <br />Ideation<br />Innovation <br />Commercialization<br />Economic<br />Growth<br />Time<br />Sustained Economic Growth = Continuous Innovation Cycle<br />
  28. 28. “Innovation Heat Map”<br />Source: Building an innovation nation, André Andonian, Christoph Loos, and Luiz Pires , Mckinsey & Company<br />
  29. 29. Prerequisites<br />Physical Infrastructure <br />Rule of Law<br />Government Stability<br />Focus: World-class Technology Sector<br />Innovation Culture<br />Regional Innovation & Economic Growth Ingredients<br />Innovation Hot Spring<br /><ul><li>Small, fast growing hub
  30. 30. Reliant on a few firms
  31. 31. Narrowly focused</li></ul>Source: Building an innovation nation, André Andonian, Christoph Loos, and Luiz Pires , Mckinsey & Company<br />
  32. 32. Arkansas Challenges &Opportunity<br />NWA<br />Interactive “Innovation Heat Map” View:<br />http://whatmatters.mckinseydigital.com/flash/innovation_clusters/<br />Source: Building an innovation nation, André Andonian, Christoph Loos, and Luiz Pires , Mckinsey & Company<br />
  33. 33. Sustaining Innovation & Economic Growth<br />Three Growth Paths<br />Government Incentives<br />Geographic Differentiators<br />University Hub<br />Dynamic Ocean<br />Innovation Hot Spring<br /><ul><li>Sustained Innovation
  34. 34. Significant Start-up Churn
  35. 35. Innovation Culture
  36. 36. Multiple Sectors/Clusters
  37. 37. Small, Fast Growing Hub
  38. 38. Reliant on a Few Firms
  39. 39. Narrowly Focused</li></ul>Source: Building an innovation nation, André Andonian, Christoph Loos, and Luiz Pires , Mckinsey & Company<br />
  40. 40. Where’s the Innovation to Commercialization Activity?<br /><ul><li>Mostly not in Arkansas…but progress is happening</li></li></ul><li>Desired Venture Ecosystem<br />University<br />R&D<br />Innovation<br />Engine<br />Entrepreneurial<br />Culture<br />Available<br />Venture<br />Finance<br />
  41. 41. Current Arkansas Situation<br />University<br />R&D<br />Innovation<br />Engine<br />Entrepreneurial<br />Culture<br />Available<br />Venture<br />Finance<br />
  42. 42. The Valley of Death<br />Pre-Seed Funding & Skill Gaps = <br />Commercialization<br />Friction Points<br />Innovate Arkansas<br />UArk<br />Pre-company<br />Post-company<br />Revenues<br />Venture Capital<br />$$<br />Angels<br />Expenses<br />Bootstrap<br />Gov Grants<br />Seed<br />Early<br />Growth<br />Mature / Expansion<br />Concept<br />Basic Research<br />Applied Research<br />Market Launch<br />Business Strategy Dev<br />Validation – Mkt & Tech<br />SBIR/STTR Proposal Dev<br />Patent Application/Licensing<br />Time<br />
  43. 43. Arkansas’ Innovation Future: “Hot Spring to Dynamic Ocean”<br />More Quality<br />Arkansas<br />Ventures <br />Crossing the Valley<br />Of Death<br />Building the Venture Ecosystem<br /><ul><li>Programs
  44. 44. Events
  45. 45. Networking
  46. 46. Places </li></li></ul><li>Making it Happen!<br />Sustainable<br />Economic <br />Clusters <br />“Dynamic <br />Ocean”<br />Arkansas Initiatives<br />=<br />Filling the Talent/Funding Gap<br /><ul><li>Angel Network Creation
  47. 47. NWA Entrepreneurship Alliance
  48. 48. Accelerators / Incubators
  49. 49. Contests / Competitions
  50. 50. New Venture Funds & Incentives</li></li></ul><li>Angel investor network being created<br />Modeled after Mid-America Angels in KC<br />Forum for review of early-stage investments<br />“Opt-in” investment model<br />Will include existing angel funds and VCs<br />Operational date: Q4 2011<br />Natural State Angels<br />
  51. 51. Forum for entrepreneur networking<br />Grew out of UA entrepreneurship club<br />Now has 70+ members across the region<br />Meets twice monthly<br />Free to join, so join now!<br />http://nwaea.net/blog/<br />NWA Entrepreneurship Alliance<br />
  52. 52. Arkansas Green Accelerator<br />Promotes company creation around green tech<br />Proposal submitted to Dept of Commerce for $1M<br />Joint UA/IA venture<br />Award date: October 2011<br />Accelerators<br />
  53. 53. The ARK Accelerator<br />IT-focused and aimed at retail, supply chain, food clusters in NWA<br />Modeled after Y-Combinator<br />Joint Winrock / UA / NWACC Venture<br />Seeking $2M in EDA/ETA funding<br />Award date: late summer 2011<br />Accelerators<br />
  54. 54. UAMS NW Healthcare Innovation Incubator<br />Focused on applied healthcare technologies<br />Housed at UAMS NW in Fayetteville<br />Status: Planning stage<br />New Incubators<br />
  55. 55. “Gone in 60 Seconds” Elevator Pitch Contest<br />Objective: startup networking<br />Monthly competition<br />First event: August<br />Venue location: NWA (tentatively Buck Nekkid BBQ in Fayetteville) <br />Contests / Competitions<br />
  56. 56. Angels<br />Venture Capital (VCs)<br />Strategic investors<br />Debt<br />Mezzanine<br />Public markets<br />Other<br />Financing Sources<br />
  57. 57. Management Team<br />Intellectual Property that can be a barrier to entry<br />Customer traction – can the company execute?<br />Physical proximity to the investors<br />Other interested investors – nobody wants to be first<br />Entrepreneur skin in the game<br />Realistic valuation<br />What Attracts the Money?<br />
  58. 58. Angels<br />High net worth individuals<br />Early stage seed investments<br />Can bring relevant domain knowledge<br />Occasionally form “Angel Funds”<br />Can include “friends, fools, and family”<br />Angel Fund Examples: <br />Fund for Arkansas’ Future<br />Gravity Ventures Arkansas<br />Angels<br />
  59. 59. <ul><li>Grew out of Silicon Valley in the 1950s
  60. 60. Largest concentration around R&D Universities
  61. 61. Desired returns: Typically a minimum of 10X
  62. 62. Examples: Kleiner-Perkins, Sevin-Rosen, NMP
  63. 63. Investment Preferences:
  64. 64. Proven management team
  65. 65. Intellectual property that creates high barriers
  66. 66. Customer traction</li></ul>Venture Capital<br />
  67. 67. VC Deal Flow<br />Receive 1000s of Business Plans<br />Read 1000s of <br />Executive Summaries<br />Invite 100s of<br /> Companies to Present<br />Due Diligence on <br />20 Investments<br />Invest <br />in<br />10 <br />1-2 Winners<br />10X Returns<br />
  68. 68. Angel <br />Fund for Arkansas’ Future<br />$6M angel fund<br />Up to $500K investments<br />Gravity Ventures Arkansas<br /><$1M angel fund<br />$50K-100K investments<br />21 active members<br />What’s Available in Arkansas?<br />
  69. 69. Public Sector Seed Capital<br />Arkansas Science & Technology Authority (ASTA)<br /><ul><li>Up to $50K-$300K in royalty/ debt financing</li></ul>Arkansas Development Finance Authority (ADFA)<br /><ul><li>Risk Capital Matching Fund - $100K - $750K</li></ul>Mezzanine <br />Diamond State I & II<br />Look for EBITDA positive growth stage companies<br />
  70. 70. <ul><li>Other Investment Incentives
  71. 71. Arkansas Economic Development Commission
  72. 72. Equity investment state tax credits – 33.3%
  73. 73. Can be monetized and transferred
  74. 74. ASTA
  75. 75. R&D state tax credits – 33%
  76. 76. Can be monetized and transferred
  77. 77. Arkansas Capital Corporation
  78. 78. New Market Investment tax credits
  79. 79. SBA Loan Guarantees</li></ul>What’s Available in Arkansas?<br />
  80. 80. The Road Less Traveled – new ventures are critical to our economic health and success!<br />The team, the plan, and a good finance strategy are key<br />A “startup culture” has to be nurtured<br />Arkansas is taking steps to create the right environment!!<br />Recap / Q&A<br />
  81. 81. Thank You<br />Supporting the Venture Ecosystem<br />Jeff Amerine, PMP<br />Technology Licensing Officer<br />Adjunct Instructor, Entrepreneurship<br />University of Arkansas<br />Advisor, Innovate Arkansas<br />jamerine@uark.edu“Techpreneurship Blog”<br />http://blog.innovatearkansas.org<br />