SCRA Board of Trustees

PowerPoint PresentationFebruary 7, 2019
Agenda
1:30 – 1:35 Welcome and Call to Order (Charles Watt) Approval of Minutes (Charles Watt) September 21, 2018 SCRA Programs Committee
1:35 – 1:40 Industry Partnership Fund (Bob Quinn) 1:40 – 1:45 Potential Incentives for Technology-based Companies (Bob Quinn) 1:45 – 2:00 Draft FY20-22 Strategic Plan (Bob Quinn/John Sircy) 2:00 – 2:15 Industry Programs (Cole Dudley) 2:15 – 2:30 Academic Programs (Christine Dixon Thiesing) 2:30 – 2:45 Entrepreneurial Programs (Jill Sorensen) 2:45 – 3:00 Facilities (Randy Cutts) 3:00 Adjourn
Welcome and Call to Order Charles Watt
Approval of Minutes Programs Committee
September 21, 2018
Industry Partnership Fund Bob Quinn
Legislative Update (as of 2/6/19) • S.309 in Senate
• Introduced by Sen. Setzler • Increases annual limit from $6M to $12M • Under newly approved amendment, no longer phased in over two years, but
reverts back to $6M in 2025 • Status:
• Awaiting third and final reading • Sen. Malloy requested it be carried over
• H.3595 in House • Introduced by Rep. Elliott; amended by Rep. Simrill
• Increases annual limit from $6M to $9M • Phased in over three years
• Status: • Passed by a vote of 102-6
2/7/19 COMPANY PROPRIETARY © 2019 BY SCRA 6
Fund Contribution Update (as of 2/6/19) • $2.3M committed to date
• Lagging contributions due to uncertainty related to proposed IRS regulation restricting federal deduction
• Regulation not relevant to companies if deducted as business expense
• IRS still considering possible changes to proposed regulation • Concerted effort to approach companies
• Involving SCRA/SC Launch Boards, SCRA staff and others • Opportunity for SCRA to expand industry engagement • Early industry engagements bearing fruit
Potential Tax Incentives for Technology-based Companies
Bob Quinn
• Developed White Papers • Small Business Startup Tax Credit
• Based on NC bill • Qualified STEM-related Jobs Tax Refund
• Based on FL laws • Life Sciences Tax Incentives
• Based on MA laws • Receiving support of State Chamber • Working with Department of Commerce and others • Identifying champions in General Assembly for
introduction of bills next year
Draft FY20-22 Strategic Plan Bob Quinn/John Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies (unchanged) 1. Continue Successful Execution of SCRA-Academia Strategic
Collaboration Agreement 2. Optimize Mission-Driven Revenue to Ensure Sustainability 3. Develop and Execute Multi-Year Legislative Strategy 4. Increase Access to Capital for Startup and Growth Companies 5. Drive Operational Excellence 6. Recruit, Grow and Retain Tech-Based Companies
FY20-22 Strategic Plan
Revenue Enhancement Scoreboard
Reference # Description 2020 2021 2022 2.1.1 SCL Investment performance 177,000$ 177,000$ 177,000$ 2.1.2 Consulting revenue - VBI 20,000 40,000 60,000 2.1.3 SCL Benefactors 100,000 100,000 100,000 2.2 Services to Industry 20,000 40,000 60,000
2.3.1 Lease revenue - legislative chg - - 200,000 2.3.2 Lease revenue - 22 West Edge 182,000 279,000 2.4 Bond yields - legislative chg - 200,000 200,000
2.5.1 Incoming Grants - 100,000 40,000 4.4 Crowdfunding - - 60,000 5.2 Investment management 10,000 10,000 10,000 5.4 Cost saves 105,000 105,000 105,000
Totals 432,000$ 954,000$ 1,291,000$
2.1.2
2.1.3
2.3.1
2.3.2
147,000
147,000
147,000
2.4
2.5.1
4.1
Bold new initiative
5.2
5.4
6.1
VBI
========================>
2.1.2
2.1.3
2.3.1
2.3.2
182,000
279,000
147,000
2.4
2.5.1
4.4
Crowdfunding
- 0
- 0
60,000
60,000
Included
5.2
5.4
Totals
$ 432,000
$ 954,000
$ 1,291,000
$ 1,199,000
========================>
Financial • Annual change in net assets vs. annual operating
plans • Annual returns on SC Launch Inc. organic portfolio • % of total revenue and $ value of revenue coming
from sources other than Industry Partnership Fund, Leases and Returns on Reserves
Internal Processes • All-in time (in business days) required to fund a
grant/investment • Annual growth rate of general and administrative
expense and professional services expense • Time (in months) required to roll out new
initiatives (e.g., crowdfunding, fee-based services, virtual business incubators)
Customer • South Carolina-based jobs created • Follow-on funding for SC Launch Client Companies • Annual $ amount of grants and investments • Number of grant recipients that receive SC Launch,
Inc. investments • Overall stakeholder satisfaction (based on surveys) • Number of formal relationships between/among
industry, academia and early-stage companies
People Development • Number of internal promotions/role
enhancements • Annual “Best Places to Work in South Carolina”
ranking
FY20-22 Strategic Plan Executive Balanced Scorecard - 4 Perspectives
Long-term Cash Flow Forecast Assumptions (Strategic Plan-driven changes in red) • IPF caps: FY 2019 - $6M; FY 2020 - $9M; FY 2021 and beyond $12M • ATI earnout of $15M: $4M in FY 2019 – 2020; $7M in FY 2021 • Bond reinvestment rate: 3.90% • Lease revenue:
• 22 WestEdge occupancy: FY 2021: 50%; FY 2022: 75%; FY 2023 and beyond: 95%
• Other: Annual increase of 3% • Program expenses: Increase with IPF increase • SC Launch impact: Funding ramping up to $4.5M annually; return on portfolio 3.0% • Capital expenditures:
• 22 WestEdge: $5.955M in FY 2020-2022 • Other: $500K plus 1% growth annually
• Cash operating expense: 1.5% annual increase • Other revenue: Ramping up to $460K annually by 2023
SCRA Long-term Cash Flow Forecast
(40,000)
(30,000)
(20,000)
(10,000)
0
10,000
20,000
30,000
40,000
50,000
60,000
SCL Returns Lease Revenue IPF Program/Other Expense Strategic Plan Reserves Original Case Reserves
Industry Programs Cole Dudley
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Grants
Industry Grants
AOP Outcomes: $500K in grants, $250K match, 25 jobs in 3 years
YTD: $71,250 in 2 grants, $71,250 match, 25 jobs forecast in 3 years
Other Industry Programs Metrics
AOP 19 YTD 19 YE 19
AOP 19 YTD 19 YE 19
Strategic Partnerships
YTD: 1 strategic partnership
AOP 19 YTD 19 YE 19
Investor Introductions
AOP Outcomes: 20 introductions of small companies to venture investors
YTD: 7 introductions
AOP 19 YTD 19 YE 19
Corporate Introductions
AOP Outcomes: 40 introductions of corporations to early-stage companies or academic institutions
YTD: 34 introductions
AOP 19 YTD 19 YE 19
Corporate Agreements
YTD: 2 agreements resulting from introductions
Investment in Venture Capital Fund
• $10M Investment as Limited Partner in Series A+ Fund • Attract professional venture investors
• Investment experience • Network of co-investors, company management, deal flow
• Follow-on funding • Dearth of Series A+ technology capital in South Carolina • Venture round sizes are growing • Local lead attracts co-investors from outside South Carolina
• Attract and retain technology companies in South Carolina • Relocation to South Carolina with local lead investor • Companies more likely to stay in SC as they grow with local investor
Other Revenue Opportunities
• Technology scouting fees • Success fees for identifying and introducing new
technologies/products or customers • Technology Roadshow: Fee per event • Chief Innovation Officer Forum
• Education and share learnings • Possible co-investments
• Proof-of-concept/Scale-up investment • Royalty or profit sharing
• Event sponsorships
Academic Programs Grants (as of 01.23.19)
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
Academic Startup Assistance Program
AOP Outcomes: Generate 2 AGs or equivalent
YTD: $60K for 3 awards
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
SBIR/STTR Matching
AOP Outcomes: Generate 2 Phase II or equivalent
YTD: $182.5K for 3 awards
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
SCRA-Academia Collaboration Team
AOP: $900K for 3 research areas
AOP Outcomes: Complete 3 feasibility projects
YTD: $0; 1st RFA released 10.23.18; 2nd RFA to be released 02.01.19; $200K EDA Match Med Devices
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
Maturation Matching
SC Medical Device Alliance EDA i6 Award Notice of Award: 12.05.18
Performance Period: 03.01.19 – 02.28.22
Minimum Cost Share: 100%
Cost Share: $1.065M from SCRA, CU, and MUSC
Project Total: $1.8M+ over three years EDA was closed due to government shutdown, which delayed official kickoff calls with EDA.
SC Medical Device Alliance EDA i6 Award First Steps for Pilot Year (Year 1)
• Engage Clemson Industry Advisory Board plus additional reviewers to triage senior design program projects (March 2019) IN PROCESS – CU/MUSC lead
• Projects prioritized for initial patentability assessment (April 2019) TTOs lead
• Provisional patent applications filed for top technologies prior to public disclosure at the Senior Design Expo (May 2019) TTOs lead
• Develop Product Profiles for top five technologies (summer 2019) SCRA leads
SC Medical Device Alliance EDA i6 Award
Request of Programs Committee:
Industry4. 0
Industry neXt is the convergence of digital information and communications technologies with manufacturing processes to drive real-time control of energy, productivity, and costs across factories and companies. This concept includes commonly understood ideas as Smart Manufacturing, the digital thread, and IIoT.
The Alliance aims to extract industry problems in the field and develop solutions through faculty engagement and, ultimately, building student teams that replicate industrial working teams with technicians (associate degree students) and engineers (both bachelor’s and Ph.D. students). Ideally, these solutions could be applied to additional sectors beyond the originating sector to maximize the economic impact.
• Robotics, Sensors, and Control Systems
• IIoT: creation of innovations including smart products, smart production systems, smart factories, and smart logistics running in a decentralized and dynamic fashion
• Additive Manufacturing: enabled by IIoT or smart manufacturing
• Digital Manufacturing, Design, and/or Visualization
• Human/Machine Interface
• Human/System Interface: includes innovative training modalities (VR, AR, MR)
• Logistics/Risk Management/Supply Chain Management: enabled by IIoT or smart manufacturing
• Big Data and Cloud Computing for Manufacturing
• Cyber Security for Manufacturing
Industry neXt Research Alliance
Industry4. 0
Upcoming Feasibility RFA: Fund development and deployment of technologies to address industry- validated needs in at least one of the Industry neXt sub-programs.
Up to three $100K awards for inter-institutional and public/private collaborations
RFA Publicly Released: February 1, 2019 RFA Submission Deadline: April 1, 2019 Funding Decisions: May 9, 2019
Industry4. 0
Request of the Programs Committee:
Input regarding routes to raise awareness of the RFA within industry in addition to SCMEP
Entrepreneurial Programs Jill Sorensen
Entrepreneurial Programs Grants
Project Development Fund (PDF)
YTD: 9 PDFs awarded
Entrepreneurial Programs Grants
Acceleration Grant (AG)
YTD: 8 AGs awarded
SC Launch, Inc. Direct Investments
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
Investments
Investments
AOP: $3M, 15 investments
YTD: $1.75M, 9 investments, 4 more lined up for Feb. 13 Board meeting, 4-6 lined up for May meeting
Follow-on Funding
Follow-on Funding (FOF)
FY19 S.E.A.L. (Scouting, Education and Outreach, Administration, Entrepreneurship Leadership)
Project Outcome Next Steps
Develop EPICS (Entrepreneurial Programs Integrated Client Services)
SCBIA, DISC, TechSC, Crowdfunding,
Convene Advisory Council quarterly
Initiate pilot VBI
Balance RM portfolio with EPICS company management, particularly for financial and due diligence follow up
All in planning stages
FY19 Q3 meeting being scheduled
Continue to implement referral system, and to work with SBA, SBDC and SCORE; Advance SCORE Charleston Chapter Women Entrepreneurship development program, SBA small business development for women, minorities and veterans
Complete RFP to develop VBI digital platform; seed-fund development and beta test
Populate CRM with EPICS management responsibility to keep RM active portfolio size closer to 30 companies
Incorporated into FY20-22 Strategic Plan, preparing for July 1, 2019 start
Portfolio Management – 171 Active Companies
EP SCL focus on Readiness:
• Learn
• Launch
• Scale
• Grow
Loans (LLC) - 24% $5,162
Convertible Deb - 35% $7,450
Equity (Corp) - 38% $8,140
$595
2/7/19 46
1 Investments since program inception, includes accrued interest (In 000s)
TOTAL INVESTMENTS = $21.4M1
Return on Investments
2/7/19 47
10 Year IRR on SC Launch Portfolio (Exits Only1) = 5% vs. 3% Target
1 Exits include active portfolio companies on payment plans in gain/loss calculation and excludes Stage 2 returns
($3,000,000)
($2,000,000)
($1,000,000)
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
COMPANY PROPRIETARY © 2019 BY SCRA
Facilities Randy Cutts
Performance Year to Date Facility FY19 AOP Investments FY19 AOP Outcomes Current Status
Columbia IC McNair: $161k to upfit 4,607 ft2 to be used as additional research space
Lease has been executed for 1760 ft2.SCRA will provide $52.8k for upfit allowance.
$24,640k additional annual rent
Executed leased space will be developed for Robotics Lab and will be completed in 150 days. Use of remaining space and lease have not yet been determined
Meeting Street IC $150k to develop remaining 4,440 ft2 large open area into individual offices
$40k additional annual rent income Lease is fully executed and upfit is in progress with completion by end of February.
Carolina Research Park
$40k to install off-grid solar/wind turbine street lights to replace 30-yr old electric lights
$75k for dam maintenance
Cost to replace just underground power feeds >$100k. These lights do not require any direct wiring or power from local utility company.
Response to Dam Safety Section of SCDHEC inspection performed on retention dam in January 2018.
Completed December 2018
Clemson/Duke Innovation Center
100% occupied; No capital investment is expected in FY19.
All leases in place and expect Innovation Center to remain at full occupancy throughout FY19.
Clemson has exercised their renewal options resulting in Innovation Center remaining at full occupancy through FY23.
ATC Summerville 100% occupancy; No capital investment is expected in FY19.
Expect to attain 100% occupancy and retain it throughout FY19.
Leases in place to remain 100% working through possibility of ATI backfilling some of the space early to relieve Volvo of expense as they downsize and relocate to their new facility.
22 WestEdge No capital investment is expected in FY19.
No specific AOP Outcomes, but objective is to identify and approach prospective tenants.
Currently conducting weekly meetings for design process with potential tenant utilizing Garvin Design Group with whom we have established relationship. Current designs include flexibility for office, conference and wet lab areas.
In contact with other potential tenants as well as working with CRDA, SCBIO and others to assist in attracting qualified candidates.
Adjourn
Agenda
Approval of Minutes
Fund Contribution Update (as of 2/6/19)
Potential Tax Incentives for Technology-based CompaniesBob Quinn
Status of Effort
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
Long-term Cash Flow Forecast Assumptions (Strategic Plan-driven changes in red)
SCRA Long-term Cash Flow Forecast
Industry ProgramsCole Dudley
Other Revenue Opportunities
Slide Number 34
Slide Number 35
Slide Number 36
Follow-on Funding
Portfolio Management – 171 Active Companies
SC Launch Companies by Sector
Portfolio (as of December 31, 2018)
Return on Investments
FacilitiesRandy Cutts

SCRA Board of Trustees

Documents

Transcript of SCRA Board of Trustees