Investing in California SBIR Companies

CSA / RTTC management of venture capital firms

Prepared by:CSA Ad hoc Investment Committee

October 8th , 2005

Congressional Research Service Perspective

[NASA’s SBIR and STTR] programs will focus on the development and support of mechanisms to ‘accelerate and augment development of mission relevant SBIR technology for NASA missions’ as well as on efforts to move SBIR technology into the marketplace. To this end, NASA intends to propose statutory changes to permit the application of SBIR funds, matched by private sector money for ‘post-phase II dual use technology development.’ Current law allows agencies to use government funds, but not those dedicated to the SBIR activity, to commercialize SBIR technologies necessary to achieve mission requirements.[1]

[1] Smith, Marcia S., Daniel Morgan and Wendy H. Schacht, The National Aeronautics and Space Administration’s FY2004 Budget Request: Description, Analysis, and Issues for Congress, CRS Report for Congress, Order Code RL31821updated September 23, 2003, page CRS-46.

NASA Spin-Off and Spin-In ComparisonNASA Spin-Off and Spin-In Comparison

NASA

Research

and

Technology

Development

Programs

LicenseDeals

Knowledge/Technology

Dollars

SBIR/STTR Contracts

Dollars

Knowledge/Technology

Space Act Agreements

Dollars

Knowledge/Technology

Spin-In Partnerships

Knowledge/Technology

Dollars

Traditional Spin-Off New Spin-InKey

NASA Partnership MechanismsNASA Partnership Mechanisms Proposed Spin-

License SBIR In Agreement

Value to NASA Royalties Technology Matching funds/

technology

NASA Funding None Ph I: 70K No limit

Ph II: 600K

Start-up Time est. 6 mos. Ph I: 12 mos. est. 6 mos.

Ph II: 24-30 mos.

Source of Funds Company NASA SBIR NASA/company

operating funds

Term of Agreement Negotiable 30-36 mos. Negotiable

SBIR/STTR Phase II Pool for Strawman SBIR/STTR Phase II Pool for Strawman Spin-In ModelSpin-In Model

Year Number of Awards Nationally

NASA MDA AF DARPA

2003 162 98 301 342002 145 244 263 852001 151 57 250 542000 144 78 241 561999 145 51 196 56 Total 747 528 1251 285

Grand Total 2811 awards (California ~20%)

Ad hoc Committee Activities

Initial Conference Call(Dozier, Gallo, Zeller)

WebEx Sessions HeldFramework for Investment Considerations

(Dozier, Gallo, Zeller)

Alameda Venture Capital Investment Perspective

(Rich Helfrich, Managing Director)

Venture Capital SBIR Perspective Refinement of SBIR Perspective

(Rick Shindell, National SBIR Expert)

CSA Board Status Report

Findings

California SBIR Phase II awards is a viable market size

Focus on Bio, Nano, Info Technology with space as the Integrator

Creation of special fund has been done before $200 million of Willie Brown / (California First) PERS Version in progress

Need to find credible public face