HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/23/2013 - ROCKY MOUNTAIN INNOSPHERE REPORT AND BUSINESS INCUDATE: July 23, 2013
STAFF: Bruce Hendee,
Josh Birks
Pre-taped staff presentation: none
WORK SESSION ITEM
FORT COLLINS CITY COUNCIL
(Mike Freeman, Chief Executive Officer, Rocky Mountain Innosphere will be present)
SUBJECT FOR DISCUSSION
Rocky Mountain Innosphere Report and Business Incubation Strategy Overview.
EXECUTIVE SUMMARY
The purpose of this work session is to provide City Council with an update regarding the
activities of the Rocky Mountain Innosphere and an overview of the City’s incubation strategy.
Staff from the Economic Health Office will provide an overview of the City’s business incubation
strategy. The overview will describe current and future activities related to business incubation. In
addition, the overview will describe how incubation fits into the larger economic health strategy of
the City.
Staff from the Rocky Mountain Innosphere will provide an update on activities during the first part
of 2013 and a review of the 2012 annual report. A focus of the update will be activities by
Innosphere in developing access to capital for client companies and growing the pipeline of potential
client companies.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does City Council need additional information regarding the City’s business incubation
strategy?
2. Does City Council need additional information regarding Rocky Mountain Innosphere’s
recent activity?
BACKGROUND / DISCUSSION
The City of Fort Collins approved an Economic Action Plan in 2005, with a vision of “a healthy
economy reflecting the value of our unique community in a changing world.” This vision continues
to guide the City regarding Economic Health activities. Furthermore, the Action Plan clearly stated
that the City’s priorities (in order) are Retention, Expansion, Incubation and Attraction of primary
employers. The 2012 Economic Health Strategic Plan (“EHSP”), approved by City Council in June
2012, reinforces this vision and commitment to primary employment. However, the EHSP expands
the City’s thinking on business incubation support to include “Enhanc[ing] the innovation ecosystem
and economy that supports companies at all stages…”
July 23, 2013 Page 2
Overview of the Innovation Economy
With Colorado State University (CSU), federal research labs, and a long list of innovative
companies, Fort Collins has numerous sources of innovation, intellectual property, and inventions
within its city limits. As a result, the city has one of the highest rates of innovation in the U.S.,
producing 10 patents per 10,000 residents. This fact, coupled with the recognition that
entrepreneurship can be a powerful engine of economic prosperity, has led the City to identify
innovation, in both the 2005 Economic Action Plan and the 2010 City Plan, as a cornerstone of the
Fort Collins economy.
While having these sources of intellectual capital is essential to an innovation economy, they are not
sufficient. The City must also have a culture and support system that encourages this intellectual
capital to be commercialized, and for that commercialization (ideally) to take place in the city. In
addition, it must provide an environment that fosters business formation and expansion. Fortunately,
Fort Collins has many of these essential elements. There are, however, significant gaps in its
“innovation ecosystem” that are outlined in the City’s EHSP.
• Access to Capital – In all of Colorado, 89 venture capital deals were funded in 2010, the
large majority of which went to the industrial/energy sector. Of these, less than 10 went to
Fort Collins companies. Fort Collins is not on the radar screens of most venture capital
firms, even the ones in Colorado. To foster the level of economic activity around the
innovation occurring in Fort Collins, companies must have better access to the capital
needed to launch and grow their businesses.
• Entrepreneurial Culture – The City and the university should encourage innovators to
spin-out companies around their discoveries and support entrepreneurs once the companies
have been formed. While the community does have an entrepreneurial spirit, its reach could
be greater, especially among CSU faculty and students.
• Retain Incubated Businesses – Fort Collins has three incubator facilities to support start-up
companies – the Rocky Mountain Innosphere (Innosphere), the Research Innovation Center
(RIC), and the Engines and Energy Conversion Lab (EECL). It does not, however, have
many sites to accommodate those companies ready to graduate from these incubation
facilities. Many of the communities surrounding Fort Collins do – these communities
include Loveland, Longmont, and Greeley – and some of those are willing to incentivize
moves. This situation leaves the City at risk for subsidizing start-up businesses and then
losing them (once a return on the City’s investment would be realized). Furthermore,
retaining the entrepreneurial talent itself is as important as retaining these companies.
Overview of the Incubation Strategy
A well-functioning Innovation Economy provides a stronger foundation for business incubation
activities. As a result, the EHSP lays out several strategies to address the gaps described above. The
complete EHSP can be found online at: http://www.fcgov.com/business/. A brief outline of the
strategies is provided below as a summary.
July 23, 2013 Page 3
1. Create a stronger nexus for innovation in both Fort Collins and the Front Range.
a. Quadruple Helix – foster continuous collaboration between academia, the private
sector, the public sector, and non-profits to promote an entrepreneurial culture and
train entrepreneurial leadership and talent.
b. Industry Cluster Support – continue to provide support for clusters as a venue for
quadruple helix collaboration. Differentiate between existing cluster and emerging
clusters.
c. Incubation – Continue to support the provision of incubation services to start-ups
through our partners, such as Innosphere, with a renewed focus on successful
funding and exit.
d. Outreach and Exchange – Strengthen ties to other innovation-driven communities.
2. Retain, develop, and recruit entrepreneurs and cutting-edge companies that align with Fort
Collins’ culture and values.
a. Entrepreneurial Culture – Foster a nurturing entrepreneurial culture that anchors
talent and companies to Fort Collins.
b. Access to Capital – Build a robust capital network by formalizing access to the
capital already present in Fort Collins, building better relationships to the venture
community outside of Fort Collins, and developing new and innovative capital
sources locally.
c. Selective Business Attraction – Work with the Northern Colorado Economic
Development Corporation (NCEDC) and other community partners to recruit those
companies vital to the success of Fort Collins’ industry cluster initiatives.
d. Awareness – Raise awareness of Fort Collins as a hotbed of innovation to attract or
engage both investors and entrepreneurial talent.
e. Technology Transfer / Commercialization – Expand Fort Collins’ capacity to support
technology commercialization and product development.
f. Resource Needs – Ensure that companies have the appropriate space to grow within
Fort Collins’ city limits and the appropriate talent to support their growth.
Summary of Recent Innovation Economy Activities
A quick summary of some recent activities by the Economic Health Office (EHO) and our partners
regarding the Innovation Economy is provided below:
• Fort Collins Bicycle Industry Alliance – The EHO in partnership with Innosphere and the
local manufacturing bicycle businesses launched the Fort Collins Bicycle Industry Alliance,
a group of businesses that produce and sell products related to the cycling industry.
Members are businesses with a focus in the cycling industry.
• Software Industry Initiative – The EHO, in partnership with Innosphere, has launched New
Tech Meetup. Fort Collins New Tech is a monthly meet-up group dedicated to fostering
new technology and entrepreneurship in Fort Collins and Northern Colorado. It provides
social networking for technologists, and a forum for early stage tech companies to present
and receive feedback from potential investors, recruiters, and peers. In addition, Innosphere
is working with the local software development and entrepreneurial community to host
events on industry technical topics throughout the year.
July 23, 2013 Page 4
• NoCoBio – The EHO, in partnership with Innosphere, relaunched the biosciences cluster
organization, NoCoBio. The focus of the initiative is to support early stage bioscience
ventures and coordinate activities with the Colorado Bioscience Association. Partners
include City of Fort Collins, CSU, University of Colorado Health Systems, Colorado
Bioscience Association, Burns Marketing, and Innosphere.
• Food cluster – The EHO, in partnership with Social Sustainability, the Gardens on Spring
Creek, and Planning, is evaluating the potential for an industry cluster focused on local food
production. The cluster would use a similar model to other industry cluster, but modify the
approach to better fit this industry. This activity supports the strategy of Supporting Industry
Clusters by evaluating emerging clusters.
• Trade Mission – The EHO, in partnership with NCEDC, is planning a trade mission to the
Research Triangle in North Carolina for the fall. This mission is intended to foster business-
to-business connections as well as connect our two innovation communities. This activity
supports the Outreach & Exchange activity.
• Ongoing Support of Innosphere – The City continues to provide operational support of
Innosphere annually. This support is in addition to the support provided through the New
Market Tax Credit financing authorized in 2010. This activity supports the Incubation
activity.
• CSU Venture Reorganization – The City’s partner, CSU Ventures, a part of the Colorado
State University Research Foundation, reorganized its structure in 2012. This reorganization
focused on enhancing the ability of Colorado State University (CSU) professors to
commercialize their research and spin-out new companies. This activity relates to the
Technology Transfer / Commercialization strategy.
• Smart Grid Live 2012 and Net Zero Cities – The City sponsored with funds from the EHO
budget both the Smart Grid Live 2012 and Net Zero Cities conferences in 2012. These
conferences attracted numerous national and international experts in the clean technology
field. It provided an opportunity for Fort Collins to showcase our community and our
support of innovation. This activity supports the Awareness strategy.
Summary of Rocky Mountain Innosphere Activities
Innosphere continues to have a positive impact on the local economy and the entrepreneurial culture
of the community. The 2012 Annual Report is provided as Attachment 1 and includes the
following summary statistics:
• 35 client companies served
• $7.9 million in revenues for current client companies
• 178 full and part-time employees
• $70,000 average annual salary of company employees
• $19.1 million capital raised in 2012
• $54.2 million capital raised to date by current client companies
Other interesting facts regarding Innosphere client companies:
• 73% of companies indicate their goal is to “Establish a headquartered company”
• 37% of companies plan to growth through direct revenue growth rather than outside
investment
• 23% of companies self-identify as clean tech companies (clean energy and water innovation)
July 23, 2013 Page 5
In addition to these outcomes, Innosphere has been engaged in several activities directly related to
the City’s Innovation Economy goal, including:
Entrepreneurial Culture
• Enhancing the number and quality of pipeline partners – These partners help to create and
identify potential client companies for Innosphere. Improving these relationships improves
both the number of potential clients and the quality of the companies seeking participation
in Innosphere.
• Innovation Afterhours – Innosphere continues to host monthly Innovation Afterhours events.
These events are intended to showcase current innovation taking place in the community and
are tied specifically to the target industry clusters of the City. In addition, they provide an
opportunity for entrepreneurs to network.
• Entrepreneurial education – Innosphere hosts myriad events for the entrepreneurial
community including Kauffman Foundations award winning FastTrac program.
Access to Capital
Innosphere has been working diligently in 2012/2013 to develop a full spectrum of capital access
tools for start-ups and entrepreneurs, including:
• Fund for Innovation – In partnership with the Community Foundation of Northern Colorado,
Innosphere has developed a donor fund intended to provide seed capital to start-ups and
entrepreneurs.
• Innosphere & Colorado Enterprise Fund (CEF) partnership – In late 2012, Innosphere
formalized a partnership with CEF by creating an Early Stage Loan Pool. The partnership
with CEF and Home State Bank, and 1st National Bank to make available up to $800,000
in early-stage venture debt.
• Community Development Venture Capital Fund – In partnership with a statewide
Community Development Financial Institution (CDFI) the intent of this program is to
provide first-in matching capital for Series A funding rounds. These are the initial venture
rounds for companies following this path to capital.
• Colorado Angel Investors – Innosphere has aided in the formation of an independent angel
investment group formed by and of accredited local investors. This group has evaluated
numerous potential investments and has made a series of investments in companies this year
– many of them Innosphere client companies.
Incubation
In pursuit of continuous improvement, Innosphere has refined its incubation support services in the
following ways:
• Formalized Intake Evaluation Process – Innosphere has refined its new client intake process
to strengthen the quality and rigor of the process needed to become a client company.
Through pipeline partners Innosphere evaluates over 100 potential clients annually. These
are then refined down to a class of around 15 new companies per year that admitted as
clients. Many of the potential clients remain too early in their development life-cycle to
benefit from formal admittance to Innosphere. These companies are typically connected
July 23, 2013 Page 6
with a host of pre-incubation advisors that Innosphere has helped to develop and maintain.
At any given time there are generally 30+ companies in pre-incubation that are receiving
services but are too early stage to achieve client status.
• Enhanced Mentoring and Advising Services – Innosphere meets biannually with each client
company, evaluating a wide range of metrics regarding company progress. These meetings
focus on understanding the challenges facing the client company and identifying resources
and advisors to assist with navigating those challenges. These are formal check-in meetings
with the result being a refined strategy and milestone development created between the client
company and Innosphere.
• Partnerships – Innosphere has worked to enhance its partnerships in several ways, including:
(a) improving relationships with numerous pipeline partners; (b) strengthened relationships
with venture capital partners providing greater access to capital; (c) formalizing relationships
with several accelerators in Colorado and other states.
ATTACHMENTS
1. Rocky Mountain Innosphere 2012 Annual Report
2. Memorandum to City Council: Response to Allegations Regarding Rocky Mountain
Innospere Financing, February 2, 2012
3. Powerpoint presentation
ROCKY MOUNTAIN
INNOSPHERE
2012 ANNUAL REPORT
Accelerating Entrepreneurship and Job Creation
ATTACHMENT 1
Dear friend of Innosphere,
On behalf of the clients, board of directors and staff of Rocky
Mountain Innosphere, we are pleased to present our 2012
Annual Report.
2012 was a year of exciting changes, building on the
foundation of our past while creating an organization for the
future. We welcomed new board members, new staff and
13 new client companies. We developed new partnerships
and initiatives to better meet the needs of our entrepreneurs
who are growing businesses and creating jobs in our key
impact areas of Cleantech, Water Technologies, Bioscience
and Software.
The highlights of our annual report feature major
accomplishments from this past year, an overview of the
economic impact Innosphere client companies are producing,
and an overview of Innosphere’s latest initiative – access to
capital. Our successful year would not have been possible
without support from you, our stakeholders, partners and
supporters. We are thankful to have you as part of our team
and look forward to working and growing with you in 2013.
Sincerely,
Thank You to our
Innosphere Funding Partners
Mike Freeman
Rocky Mountain Innosphere
CEO
Mark Wdowik
Rocky Mountain Innosphere
Board Chair
14
8
6
2
2
3
Software
Bioscience
Cleantech
Water
Other
Cleantech
Energy
Cleantech
Engines
35 client companies served
$7.9M revenues of current client companies
178 full and part-time employees
of companies
$70K average annual salary of
company employees
$19.1M capital raised in 2012
$54.2M capital raised to date by current
client companies
Economic Impact of 2012
Rocky Mountain Innosphere
Innosphere is a 501(c)3 non-profit organization located
in a qualified Colorado Enterprise tax zone and Urban
Renewal Area.
As a technology incubator, the Innosphere:
• Accelerates the success of high-impact scientific and
technology startup companies.
• Promotes the development of an entrepreneurial ecosystem
throughout Colorado.
• Is building a portfolio of the most innovative companies in
Colorado with a focus on growth, jobs and wealth creation for
our communities.
The resources we provide to entrepreneurial
startup companies:
• A network of advisors, mentors and professional
service providers.
• Educational and networking opportunities for realizing
business success.
• Access and connections with academic and
government institutions.
• Assistance with raising capital.
Industry Portfolio of 2012 Client Companies: Resident & Non-Resident
Log mesh TM
Technologies, LLC
One Third
of clients have a CSU affiliation
Innosphere Client Companies:
Class of 2012
Blue Margin
Clean Engines
Community Funded
FishChoice
GreenRx
Jobzology
KromaTiD
MoCo Development Co.
Memory Bistro
Newaya Recycling
OptiEnz
Scout
VetDC
Innosphere Client
Companies
Advanced MicroLabs
Advanced Regenerative Therapies
Begin Again
Canvasback Legal Technologies
Carbo Analytics
Clear Path Labs
Crashboxx
Czero
Delta Circuit Desin
DH2i
Eckstien Diagnostics
Forston Labs
Logimesh
Membrane Protective Technologies Inc.
Propel Labs
Smart Move, Inc.
Ridekick International
St. Renatus
Stewart Energy
Symbios Technologies
WeatherFlow
YouSEEU
Past Graduates
Advanced MicroLabs
Begin Again
Clear Path Labs
Datasplice
DVM Systems
Inviragen
Panda Bicycles
Sprig Toys
Stewart Energy
VanDyne Superturbo
ZeroHero
Born in the Colorado State University research and
development machine, OptiEnz is a great example
of the effectiveness of CSU Ventures in translating
faculty innovations into entrepreneurial enterprises
in water innovation.
Capital Access Strategy Moves
Innovation Forward
Without access to the appropriate
capital at the appropriate time, many
promising businesses stall or even fail.
We are committed to our Access to
Capital initiative to match entrepreneurs
to capital:
1. Path to Capital:
education for entrepreneurs on potential
capital sources for their business, based
on the appropriate growth strategy for
their business.
2. Investor Network:
expediting the time it takes to fund a
promising Innosphere Client Company
by forming strong investor networks
and strategic connections to create
funding opportunities.
3. Capital Access Pools:
the Innosphere has initiated or
established innovative internal funding
solutions to increase access to capital for
select companies, including:
Primary Funding Path
One of the key services in
Access to Capital is helping
entrepreneurs understand their
primary funding path.
By working with the entrepreneur
to best understand the type
of company they are trying to
build, we are able to target their
funding approach and help them
tailor their pitch to stay focused
on the appropriate funding
sources. This maximizes time
in the business and minimizes
unproductive pitches.
73% of Innosphere clients
describe their company goal as
“Establishing a headquartered
company” and growing their
company through revenue, debt
and angel investor funding.
37%
36%
12%
9%
6%
Revenue
Angel
Strategic
Grants
VC
• Fund for Innovation:
a seed stage fund established at
the Community Foundation of
Northern Colorado
• Innosphere Early Stage
Pipeline Development is key to success
We spend a significant amount of time working with outside partners to develop a strong pipeline of new
companies. Many are surprised at the number of companies we work with in the pre-incubation stage. Our
process ensures a strategic vetting process for companies to go from pre-incubation to Innosphere client
company. While the 13 client companies admitted in 2012 represent a diversity of industries, all are viable
businesses with the ability to have a significant economic impact in the region. This diversity of industries
makes developing a tailored process for each client even more vital to their success.
Colorado State University Ventures: initiated
a new process to discuss early research projects
that heading toward commercialization in
12 to 24 months.
Colorado State University, Infectious Disease
Research Center: launched a new partnership with
the IDRC management team to provide programs
and services for companies within the Research
Innovation Center incubator.
University of Colorado, Cleantech Program:
Innosphere is now working with start-ups from
the Cleantech program. It is expected that 4-6
companies each year will be applying for
Innosphere membership.
Colorado Institute for Drug, Device,
and Diagnostic Discovery: to better support
Bioscience companies, the Innosphere teamed
up with CID4 to provide early stage assistance,
funding, and technical expertise for client
companies.
Colorado State University’s Institute
for Entrepreneurship: This partnership helps foster
the development of collegiate entrepreneurs. CSU’s
Institute for Entrepreneurship recently launched
the New Economy Venture Accelerator to provide
students with resources to achieve the ultimate goal
of creating self-sustaining, funding-ready ventures.
Pre-incubation services help
entrepreneurs determine if there
is a scalable business opportunity
around their technology innovation.
Innosphere client companies
receive help from Innosphere in
accelerating development from
business concept to company.
Pipeline partners are essential in
connecting Innosphere to the most
promising technologies being developed
in our region as well as assisting us in
vetting technologies that come from
outside of the network.
CSU
CSU Ventures
CID4
CU-Cleantech
Univ. of CO Health
Corp. Ventures
Venture Capital
Family Oces
SAGE
Advisors
CSU
SBDC
Great ideas don’t grow into great
businesses on their own
Even with a terrific business plan, an entrepreneur
needs the right support. The Innosphere would
not exist without the support of our volunteers,
community partners and investors. We invite you to
join our entrepreneurial ecosystem and share your:
• Time & Talent: Advisors, Mentors, Executives
• Treasure: Fund for Innovation,
Colorado Angel Investors
Join us! We welcome partners who:
• Wish to enable game changing technologies in
areas of Cleantech, Water Technologies, Bioscience
and Software
• Want to support the creation of high-paying jobs
• Want to roll-up their sleeves and help
entrepreneurs tackle the critical challenges
that will make or break their business
2013 priorities
• Additional investments out of the Fund
for Innovation
• The formation and implementation of the
Community Development Venture Capital Fund
• Launch new collaboration with CSU’s Powerhouse
For more information on how to be involved with
Innosphere, please contact Mike Freeman, CEO.
For more information on fund-raising programs,
contact Doug Johnson, Vice President of Capital Access.
Please call the main line at 970-221-1301.
Northern Colorado Bioscience
Cluster (NoCoBio)
Nurturing Ideas.
Building Bioscience.
You have an idea, and you’ve demonstrated
it can work. Now what? NoCoBio is the
resource that helps you answer that
question. We’re your connection to the
biosciences community – and the boost you
need to move your innovation forward.
NoCoBio in the News:
Burns Marketing, a full-service marketing
agency with offices in Northern Colorado
and Denver, announced a major in-kind
sponsorship to the Innosphere to advance
the Northern Colorado BioScience initiative
(NoCoBio). The in-kind services are valued
at more than $60,000, making it the
largest in-kind sponsorship to ever come
through the Rocky Mountain Innosphere.
The Colorado Institute for Drug, Device
and Diagnostic Development (CID4),
a not-for-profit entity focused on
advancing the Colorado life science
ecosystem through company creation
and job growth, announced a partnership
with Rocky Mountain Innosphere to
support the technology incubator’s
bioscience companies.
Tax Credit Example for Innosphere Donors
Innosphere Contribution Amount $100,000
320 East Vine Drive, Fort Collins, CO 80524
970.221.1301 rmi2.org
We are more than a building, an incubator, or a network.
We are a force—borne of ideas and shaped by passion.
We are a community of entrepreneurs, leaders and supporters.
We are an ecosystem for innovation.
We are an engine for economic opportunity.
We are a catalyst for progress.
We are Rocky Mountain Innosphere.
Bring your vision.
printed on 100% post-consumer waste recycled paper
Join the Conversation
Innosphere is a 501c3 tax exempt non-profit organization
Arrange a tour of our facility to learn more about the Innosphere – call the main line at 970-221-1301
ATTACHMENT 2
Fort Collins City Council
July 2013
Innosphere Overview & Update
ATTACHMENT 3
BACKGROUND INFORMATION
2
Our Evolution
98‐06
FCTI
06‐11
RMII
10 ‐ 11
Innosphere
2012
2013‐2014
Kathy Kregel
Mark Forsyth
Kelly Peters
Nicole Franklin
Mark Forsyth
Ryan Speir
Ryan Daniel
Jamie Sherwood
Mike Freeman
Doug Johnson
Maggie Flanagan
Emily Wilson
Ryan Daniel
Whitney Baggett
3
*Current Staff:
501(c)3 3 employees
Building LLC 2 employees
Clusters 1 employee
Strategic Direction….
Capital
Geography
Industries
Business Model
We are more than a building.
We are more than an incubator.
We are more than a network.
We are a force—borne of ideas and shaped by passion.
We are a community of entrepreneurs, leaders and supporters.
We are an ecosystem for innovation.
We are an engine for economic opportunity.
We are a catalyst for progress.
We are Rocky Mountain Innosphere.
Bring your vision.
4
Industry Focus & Geography Served
5
•Biomedical Drugs & Discovery, Diagnostics and Devices,
Agricultural and Animal Products, Bio‐based products
• Capital: grants, angel, strategic, venture
• Geography: Northern Colorado
Biosciences
•Infrastructure software, Enterprise software, Security
software, Web 2.0
• Capital: angel, strategic, venture
• Geography: Northern Colorado
Software
•Energy, water, transportation, smartgid, etc.
• Capital: grants, angel, strategic
Cleantech • Geography: Front Range
ORGANIZATIONAL INFORMATION
6
THANK YOU
Innosphere Funding Partners
Nonprofit Funding Model
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
2013 2014
2015 2016
2017
Building Income
Powerhouse
Cleantech*
Sponsorships*
Fund for Innovation*
Fundraising Income*
Program Revenues
Cluster Support
Funding Partners
*implies more risk – uncertain who the investor always is 8
Projected
Expenses
2012 Economic Impact
35 • Client Companies
$7.9M • Annual client revenue
178 •Full and part‐time employees
$70,000 •Average annual salary
$19.1M • Client capital raised
$54.2M • Cumulative capital raised
9
Productivity over time
1998‐2006 2010 2011 2012 Current*
Number of client
companies 20 27 30 35 41
Number of
Graduates 14 2 4 4 12 Est.
Total employees
(FT+PT) 151 198 173 178
Avg. annual salary
$65,000 $65,000 $55,000 $70,000
Capital raised $40.6M $11.8M $9.4M $19.1M
* Client metrics are collected at end of calendar year. In 2013, Innosphere
anticipates 13 graduate companies. Since inception, the incubator has served
85 client companies, 27 of which are considered successful graduates.
Innosphere companies
nFusion Technologies
Ergonomic Health Systems
Online Marketing Netowrk
Rocky Soft
Sixth Dimension
Spatial Data Technologies
Greyrock Services
OptiBrand
RaqRider
BekkTech
Cerience
NGI
Data Splice
Engineered Intelligence
HorseSportsWorld.com
Logisens
Privacy NETworks
Triad Systems Engineering
Ruffdogs
InViragen
Sprig Toys
AGP
Advanced Microlabs
ART
BeginAgain
Canvasback Technologies
Crystal Creek Energy
Czero
Delta Circuit Design
DH2i
Eckstein Diagnostics
Forston Labs
Logimesh
Ridekick International
Weatherflow
Wirsol Solar
Yewsavin
YouSeeU
CarboAnalytics
Clear Path Labs
Crashboxx
DVM Systems
Membrane Protective Tech
Panda Bicycles
Smart Move, Inc.
Propel Laboratories
St. Renatus
Stewart Energy
Symbios
VanDyne SuperTurbo
ZeroHero
Blue Margin
Clean Engines
Community Funded
FishCoice
ExchangeMeds
Jobzology
KromaTiD
MoCo Development Co.
Q2 – 2013 Pipeline Report
23 applicants
8 disqualified
8in‐review
7 accepted
Pre‐incubation
25
Client
Companies
36
12
CSU Hatchery
Companies
3
Client Management Plan
YE 2012 Q2 YE 2013
Resident 16 17 20
Non‐resident 19 17 15
CleanTech
Initiative
017
Graduates +8 +2 +12
Early Exits +8 +3 +1
Primary Funding Path
8%
14%
19%
27%
32%
Venture
Strategic
Grants
Revenue
Revenue
Industry Portfolio – Number of Companies
Other, 1
Cleantech
Energy, 3
Cleantech
Water, 4
Cleantech
Engines, 4
Bioscience, 10
Software, 15
INCUBATION PROCESS & PROGRAMS
16
Pipeline Development –Quarterly Admission Process
Our Strength is Developing Partnerships to Identify New Client Companies
17
Our Incubation Process
This process helps entrepreneurs manage time and resources relative to
their stage of development and ensures market demand.
Market
Growth
Market
Growth
Product
Customers
Product
Customers
Technology
Market
Technology
Market
Venture
Strategic
Venture
Strategic
Angel
Debt
Angel
Debt
Grants
Seed
Grants
Seed
Client Focus
Path to Capital
18
Programs
•Kauffman Foundation’s FastTrac
Tech Venture
• Lunch & Learns
Education
•Social and Advisory Group for
Entrepreneurs (SAGE)
•Executives in Residence (EIR)
Mentors
•Advisors in Residence (AIR)
Networks • Industry events
20
Capital Access Programs
1. Fund for Innovation Seed Fund ‐ Established
Established the fund at the Community Foundation of Northern
Colorado – fundraising $500,000
2. Innosphere Early Stage Loan Pool ‐ Completed
Colorado Enterprise Fund andHomeStateBankpledgedupto
$500,000 for early‐stage venture debt (pre‐SBA or traditional
lending)
3. Innosphere Community Development Venture Capital Fund– In Progress
Being developed with a statewide CDFI to provide first‐in matching
capital for Series A funding rounds
4. Colorado Commercialization Fund ‐ Planned
Form a joint Tallwave – Innosphere Venture Fund 2014+
BUILDING INFORMATION &
FINANCING
21
Building Overview
Building basics
30,000+ square feet
Laboratory space equipped for fume hoods
Shared print/copy/fax workroom
Shared kitchen and café meeting room
Showers and changing area
Meeting places
Large conference/event spaces with high-quality audio/video
Smaller conference rooms and creative spaces
A lounge-café that is ideal for informal meetings
Big Picture Building Budget
Leasing Income $505,000
Expenses $659,000 (includes depreciation)
Net Income -$154,000
Net Income $15,000 (without depreciation)
23
Significant Expense Categories:
Property Taxes $143,000
Interest Expense $127,000
Building Mgmt. $77,000
These make up 70% of the total building budget
2013 Building Budget
24
• 95%+ leased currently (June, 2013)
• Ahead of budget now – but major lease ending
• Commitments to be 90% leased by September 1
• Remaining leasing a priority for 4th
Quarter
• On track to meet adopted budget for Net Income
Building Next Steps
25
• Complete the mandatory 7 year New Market Tax
Credit Term
• End of 7 years – either refinance with a bank, or pay
off debt
• Building becomes an asset to the Nonprofit following
year 7
CLOSING
26
Strategic Priorities
Strategically linked to City Economic Health strategy
Source companies to Power House and RIC (CSU)
Central to industry cluster strategies
Part of the redevelopment program for Vine – Lot B
Open NREL office
Grow pipeline in medical device and software
City URA NMTC*
Debt
Private
Investor
NMTC*
Equity
$5.3 Million
Loan
$5.3 Million
Loan
$2.0 Million
Contribution
RMI2
Properties,
LLC
$7.3 Million
Construction
Loan
*New Market Tax Credit (NMTC) Financing Program:
A Federal program designed to leverage private for‐
profit contributions to achieve economic
development objectives.
2009 2010
2017: Refinance 2017‐2029: No Refinance
OPTION 1
RMI
Payment
$2.5 Million
TIF Pledge
$2.8 Million
Original Loan
$5.3 Million
One Time
Payment
in 2017 to URA
URA uses a
Portion of TIF
Revenue from the
Project to repay loan
Principle & Interest
Paid in full by 2029
OPTION 2
RMI Assumes
NMTC Loan
$5.3 Million
Original Loan
$5.3 Million
Interest Only Payments
Continue to 2029;
Principal Paid in 2029
Principle & Interest
Paid in full by 2029
Comments:
• Preferred Scenario
• Accelerated City principal repayment
• Reduced long‐term cost to RMI
Comments:
• No Impact to City Loan
• Delays URA principal repayment
• Delays usability of TIF; 2029
• Increased cost to RMI
Memory Bistro
Newaya Recycling
OptiEnz
Scout
VetDC
White Cheetah
SI-Technology
Open Source Water Foundation
Meritage Systems
Innotrieve
Fluonic
Firefly Medical Inc.
Boulder Electric Vehicle
Avani
MetStat
Avivid Technologies Group
Navitus Power Services
Fort Collins Innovative Foods
Origin
WildFit Gyms
EcoVapor
Solid Power
Fabriq
US e-Chromic
Order Storm
Pneumaticoat Technologies
Assumed 35% Federal Tax Rate -$35,000
4.63% Colorado Tax Rate -$4,630
Colorado EZ Tax Credit -$25,000
Adjusted “Cost to the Contributor” $35,370
(35.37% of Total Contribution)
Econ. Devel.
Advisors
Executives
Space
Capital Access
4 Seed Investments
6 Angel Investments
8 Debt Placements
2 Venture Investments
PIPELINE
PARTNERS
PRE-
INCUBATION
CLIENT
COMPANY
ANNUAL
TARGETS
100+ 12+
100+ 12+
PIPELINE PARTNERS PRE-INCUBATION CLIENT COMPANY
CSU
CSU Ventures
CID4
CU-Cleantech
Univ. of CO Health
Corp. Ventures
Venture Capital
Family Oces
Others
SAGE
Advisors
CSU
SBDC
Econ. Devel.
Advisors
Executives
Space
Capital Access
Programs
4 Seed Investments
6 Angel Investments
8 Debt Placements
2 Venture Investments
ANNUAL TARGETS
Our strength is developing partnerships to support our Client Companies.
In 2012, we strengthened relationships and created new partnerships that help
ensure a strong flow of new companies, including:
Loan Pool:
established in partnership with
Colorado Enterprise Fund and Home
State Bank of up to $500K for
early-stage venture debt
• Community Development
Venture Capital Fund:
being developed with a statewide
Community Development Financial
Institution to provide first-in matching
capital for Series A funding rounds.
• Colorado Angel Investors:
an independent angel investment group
formed by accredited, local investors.
DH2i is saving customers thousands of dollars, their
software has re-imagined server virtualization and their
technology has attracted the attention of outside investors.
Logimesh Technologies was awarded the “Best Technology
Development of Energy Harvesting” award at IDTechEx,
the world’s largest energy harvesting conference.
Carbo Analytics was awarded “Outstanding Venture 2012”
at the U.S. Department of Energy’s NREL Industry Growth
Forum. Nationally, this is the highest profile startup
company forum in the clean energy space.
A productive collision in the Innosphere hallways
turned into an innovative joint venture when
Crashboxx and Canvasback Enterprises combined
forces to improve the bail bond industry with their
Automatic Defendant Locator System.
We love promoting our client companies’
successes and achievements
2012 Highlights: