bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
March 31 2019
Type
000s
of Portfolio
Yield to Maturity
Corporate bonds
625
144
386
Government bonds
2540
584
169
Total fixed income
3165
728
212
Preferred stock
1183
272
606
Totals
$ 4348
1000
319
Fixed Income Maturities
000s
Yield to Maturity
of Fixed Income Portfolio
Under 1 year
$ 1285
129
406
1 to 5 years
1507
225
476
Over 5 years
373
444
118
Total Fixed income
$ 3165
212
1000
March 31 2019
000s
of Portfolio
Yield to Maturity
Money market
$ 8038
157
218
Bonds
43139
843
207
Totals
$ 51177
1000
209
Duration of Bonds
487
years
Maturity by Fiscal Year
000s
Yield to Maturity
of Bonds
2019
$ 168
102
04
2020
- 0
000
00
2021
7258
162
168
2022
10385
189
241
2023
4670
200
108
2024
2532
242
59
2025
5835
256
135
After 2025
12291
222
285
Total Bonds
$ 43139
207
1000
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
March 31 2019
Type
000s
of Portfolio
Yield to Maturity
Corporate bonds
625
144
386
Government bonds
2540
584
169
Total fixed income
3165
728
212
Preferred stock
1183
272
606
Totals
$ 4348
1000
319
Fixed Income Maturities
000s
Yield to Maturity
of Fixed Income Portfolio
Under 1 year
$ 1285
129
406
1 to 5 years
1507
225
476
Over 5 years
373
444
118
Total Fixed income
$ 3165
212
1000
March 31 2019
000s
of Portfolio
Yield to Maturity
Money market
$ 8038
157
218
Bonds
43139
843
207
Totals
$ 51177
1000
209
Duration of Bonds
487
years
Maturity by Fiscal Year
000s
Yield to Maturity
of Bonds
2019
$ 168
102
04
2020
- 0
000
00
2021
7258
162
168
2022
10385
189
241
2023
4670
200
108
2024
2532
242
59
2025
5835
256
135
After 2025
12291
222
285
Total Bonds
$ 43139
207
1000
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
March 31 2019
Type
000s
of Portfolio
Yield to Maturity
Corporate bonds
625
144
386
Government bonds
2540
584
169
Total fixed income
3165
728
212
Preferred stock
1183
272
606
Totals
$ 4348
1000
319
Fixed Income Maturities
000s
Yield to Maturity
of Fixed Income Portfolio
Under 1 year
$ 1285
129
406
1 to 5 years
1507
225
476
Over 5 years
373
444
118
Total Fixed income
$ 3165
212
1000
March 31 2019
000s
of Portfolio
Yield to Maturity
Money market
$ 8038
157
218
Bonds
43139
843
207
Totals
$ 51177
1000
209
Duration of Bonds
487
years
Maturity by Fiscal Year
000s
Yield to Maturity
of Bonds
2019
$ 168
102
04
2020
- 0
000
00
2021
7258
162
168
2022
10385
189
241
2023
4670
200
108
2024
2532
242
59
2025
5835
256
135
After 2025
12291
222
285
Total Bonds
$ 43139
207
1000
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
Sheet1
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
March 31 2019
Type
000s
of Portfolio
Yield to Maturity
Corporate bonds
625
144
386
Government bonds
2540
584
169
Total fixed income
3165
728
212
Preferred stock
1183
272
606
Totals
$ 4348
1000
319
Fixed Income Maturities
000s
Yield to Maturity
of Fixed Income Portfolio
Under 1 year
$ 1285
129
406
1 to 5 years
1507
225
476
Over 5 years
373
444
118
Total Fixed income
$ 3165
212
1000
March 31 2019
000s
of Portfolio
Yield to Maturity
Money market
$ 8038
157
218
Bonds
43139
843
207
Totals
$ 51177
1000
209
Duration of Bonds
487
years
Maturity by Fiscal Year
000s
Yield to Maturity
of Bonds
2019
$ 168
102
04
2020
- 0
000
00
2021
7258
162
168
2022
10385
189
241
2023
4670
200
108
2024
2532
242
59
2025
5835
256
135
After 2025
12291
222
285
Total Bonds
$ 43139
207
1000
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
March 31 2019
Type
000s
of Portfolio
Yield to Maturity
Corporate bonds
625
144
386
Government bonds
2540
584
169
Total fixed income
3165
728
212
Preferred stock
1183
272
606
Totals
$ 4348
1000
319
Fixed Income Maturities
000s
Yield to Maturity
of Fixed Income Portfolio
Under 1 year
$ 1285
129
406
1 to 5 years
1507
225
476
Over 5 years
373
444
118
Total Fixed income
$ 3165
212
1000
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
Sheet1
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
March 31 2019
Type
000s
of Portfolio
Yield to Maturity
Corporate bonds
625
144
386
Government bonds
2540
584
169
Total fixed income
3165
728
212
Preferred stock
1183
272
606
Totals
$ 4348
1000
319
Fixed Income Maturities
000s
Yield to Maturity
of Fixed Income Portfolio
Under 1 year
$ 1285
129
406
1 to 5 years
1507
225
476
Over 5 years
373
444
118
Total Fixed income
$ 3165
212
1000
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
SCRA 2020-2022 Strategic Plan
Financial Impact over the Planning Cycle
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Status
Rationale
211
SCL reserve portfolio
$ 177000
$ 177000
$ 177000
Not included
Hedge vs SCL Organic portfolio performance
212
SCL organic portfolio
233000
278000
323000
Included
Representative of new revenue streams
22
Services to Industry
20000
40000
60000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
203000
305000
386000
Already included in core analysis
24
SCRA Bond yields net
155000
155000
Already included in core analysis
251
Incoming Grants
- 0
50000
50000
Included
Representative of new revenue streams
31
Board governance
- 0
(45000)
(45000)
43
Crowdfunding
- 0
- 0
55000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
Already included in core analysis
61
Virtual Business Incubator
- 0
- 0
20000
Totals
$ 748000
$ 1075000
$ 1496000
Total revenue enhancements included in Cases 1-3
========================gt
253000
368000
688000
Additional REs
135000
160000
255000
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference
Description
2020
2021
2022
Thereafter annually
Status
Rationale
211
SCL Investment performance
177000
177000
177000
177000
Not included
Hedge vs SCL Organic portfolio performance
212
Consulting revenue - VBI
20000
40000
60000
80000
Included
Representative of new revenue streams
213
SCL Benefactors
100000
100000
100000
100000
Not included
Conservatism
22
Services to Industry
20000
40000
60000
80000
Included
Representative of new revenue streams
231
Lease revenue - legislative chg
- 0
- 0
200000
200000
Included
Represents impact of Legislative strategy
232
Lease revenue - 22 West Edge
147000
147000
147000
Already included in core analysis
24
Bond yields - legislative chg
- 0
200000
200000
200000
Already included in core analysis
251
Incoming Grants
- 0
100000
40000
40000
Included
Representative of new revenue streams
41
Establish VC Fund
(2500000)
(2500000)
(2500000)
Varies
Depicted in Cases 2 amp 3
Bold new initiative
44
Crowdfunding
- 0
- 0
60000
60000
Included
Representative of new revenue streams
52
Investment management
10000
10000
10000
10000
Already included in core analysis
54
Cost saves
105000
105000
105000
105000
Already included in core analysis
61
VBI
See 212 above
Total revenue enhancements included in Cases 1-3
========================gt
40000
180000
420000
460000
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Sheet1
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
SCRA Board of TrusteesAudit and Finance Committee
Agenda
Welcome and Call to OrderBryant Barnes
Approval of Minutes
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
SCRA Balance SheetsApril 30 2019 and 2018
SCRA Balance SheetsApril 30 2019 and 2018
Executive Summary
SCRA Statements of Activities 10 Months Ending April 30 2019
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
Executive Summary
SCRA Statements of Activities FY19 Forecast vs AOP
SCRA Statement of ActivityFY 2019 Forecast vs AOP
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
SC Launch Statements of Activities 10 Months Ending April 30 2019
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
SC Launch Statements of Activities FY19 Forecast vs AOP
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
Portfolio ReviewJohn Sircy
Market Summary
SCRA Investment Portfolio Summary
SCRA Investment PortfolioMaturities and Yields
SC Launch Investment Portfolio Summary
SC Launch Inc Investment PortfolioAsset Mix
Industry Partnership FundBob Quinn
Slide Number 29
Growth StrategyBob Quinn
Slide Number 31
Slide Number 32
Slide Number 33
Slide Number 34
Slide Number 35
Slide Number 36
Slide Number 37
Slide Number 38
Slide Number 39
Slide Number 40
Slide Number 41
Slide Number 42
Slide Number 43
Slide Number 44
Slide Number 45
Slide Number 46
Slide Number 47
Slide Number 48
Slide Number 49
Slide Number 50
Slide Number 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
FY20-22 Strategic Plan
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptions
SCRA Long-term CF ForecastsReserve Balances
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
FY20 Annual Operating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
FY 20 AOP Balance Sheet ndash Asset Mix
FY20 AOP Statement of Activities
FY 20 AOP Statement of Activity
SCRA FY 2020 AOPContingency Plan Summary
Contingency Expense Save Mix
Slide Number 66
Summary
$s ( 000s)
Notes
FY 2020 AOP deficit
$ (307)
IPF shortfall
(3500)
50 discount assumed
Revised FY 2020 deficit - pre-saves
$ (3807)
Expense Saves in Response to IPF Shortfall
Operating expense
Legal
87
Greater discipline exercized
PS
Technical services (IT)
161
Delay various IT initiatives
PS
Management consultants
65
Lobbying
PS
Recruitment
18
Focused approach
Travel
38
Use of GTMtechnology
Other
Business meetings
27
Use of GTMtechnology
Other
Training
18
Targeted group strategy
Sponsorshipsmemberships
75
Prioritize
GampA
Other
8
Essentials
Total operating expense saves
497
Program expense
Acceleration grants
500
Focus on investment potential companies
Project development funds
100
Focus on investment potential companies
Demonstration projects
200
Focus on investment potential companies
ASAP and Maturation grants
50
Prioritize
SACT grants
100
Prioritize
Transfers to SC Launch
400
SCL liquidity for FY 2020 - sufficient
Total program expense saves
1350
Total contengency saves
1847
Revised FY 2020 AOP deficit - post-saves
$ (1960)
In 000s
2020 AOP
2019 FC
$ Var
Var
2019 AOP
Notes
Operating revenue
Contract
$ 600
$ 680
$ (80)
-118
$ 511
FC Dept of Commerce less SCHFCA ($118k)
Lease
4242
4000
242
61
3722
FY 2020 AOP 22 West Edge ($203k)
Contributions
7000
3000
4000
1333
6000
FC Includes $282k CURF transfer
Other
76
116
(40)
-345
76
FC Includes Volvo furniture rental
Total operating revenue
$ 11918
$ 7796
$ 4122
529
$ 10309
Operating expense
Contract - direct
$ 60
$ 35
$ 25
714
$ 15
Facilities
1537
1430
107
75
1468
FY 2020 AOP 22 West Edge
Grants and program expenses
3725
3400
325
96
3625
FC Watt commitment timing
Salaries and benefits
5235
4650
585
126
4901
FY 2020 AOP Growth Strategy
General and administrative
812
710
102
144
704
FY 2020 AOP Software telephony
Professional services
848
825
23
28
618
FC Legal consulting
Depreciation
1970
1640
330
201
1858
FY 2020 AOP 22 West Edge
Other
930
825
105
127
881
FY 2020 AOP Travel
Total operating expense
$ 15117
$ 13515
$ 1602
119
$ 14070
Net operating deficit
$ (3199)
$ (5719)
$ 2520
-441
$ (3761)
Non-operating activities
Transfers to SC Launch Inc
$ (2100)
$ (1800)
$ (300)
167
$ (1800)
Interest income
992
1250
(258)
-206
720
FC Accrual accounting
ATI earnout
4000
4000
- 0
00
- 0
Unrealized gain (loss) on investments
- 0
1000
(1000)
-1000
(100)
FC Bond rally
Non-operating activities
2892
4450
(1558)
-350
(1180)
Net surplus (deficit)
$ (307)
$ (1269)
$ 962
758
$ (4941)
AOP
Forecast
Actual
Assets
63020
63019
63018
Notes
Unrestricted cash
$ 124
$ 119
$ 254
Restricted cash
1
1
2
Receivables amp prepaids
2770
2760
6241
Short-term investments
4575
4525
5050
Total current assets
7470
7405
11547
PPampE net
35270
32270
33944
22 West Edge
Long-term investments
38157
42469
39991
Total non-current assets
73427
74739
73935
Total assets
$ 80897
$ 82144
$ 85482
Liabilities
Short-term liabilities
$ 850
$ 850
$ 1195
Notes payable - buildings
13335
14275
15200
Total liabilities
14185
15125
16395
Net Assets
Unrestricted
$ 38808
$ 43864
$ 44845
Restricted
5969
5160
5498
Net invest In cap assets
21935
17995
18744
22 West Edge
Net position
$ 66712
$ 67019
$ 69087
Tl liabs amp net assets
$ 80897
$ 82144
$ 85482
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
![INDEX [] · 2005-10-25 · 5 Bryant, John F, 27 Bryant, Levi Clinton, Sr, 109 Bryant, Lillie S, 101 Bryant, Linster, 101 Bryant, Litha L, 109 Bryant, Louisa M, 111 Bryant, Mary, 101](https://static.fdocuments.in/doc/165x107/5f4498e1f4a6be5e1a48d4d2/index-2005-10-25-5-bryant-john-f-27-bryant-levi-clinton-sr-109-bryant.jpg)
