NY STATE GOVERNOR 2011 ECONOMIC DEVELOPMENT INTIATIVE

$785 Million NY State Grants, Regional Economic Development Council program

Meager Funds for Tech!!!!!! NYC Seedstart Accelerator LLC : supports new technology companies

Catholic Health Care System : grant for e-medical records training

NYIT: grant to expand industry-academic partnerships

Accelerate Long Island: supports start-up technology firms

REGIONAL PRIORITIES

Source: Green Establishment Database and National Establishment Time-Series Analysis: Collaborative Economics.

ASEE4-16-2013

Polaris: Proprietary and Confidential 6

POLARIS OVERVIEW

17 Polaris-founded companies · 475% IRR18 medical products approved · 80 million lives touched

From 25 Universities/Institutes/Teaching Hospitals

UNDER MANAGEMENT$3.5BFOUNDED1996 DIVERSIFIED

FUNDS6

Pioneering companies Akamai (MIT)deCODE Genetics (Beth Israel/Harvard)WordPress (Automattix)Alnylam (MIT & Max Planck)AdiMAB (Dartmouth)

POLARIS ACCESS: UNPARALLELED UNIVERSITY CONNECTIONS

Return4.5x

Companies spun out of academia

4623 companies161% IRR

13 companies222% IRR

6 companies105% IRR

Pervasis

IRR176%

Returned to LPs$900

TRANSFORMCima/Langer McGuire

AIREdwards/

Langer McGuire

AERO DESIGNS

Edwards McGuire

MOMENTARam/

Langer Crane

VISTERRA

Ram Crane/Bitterman

CERULEAN

Ram Crane/Bitterman

BINDFarokhzad/

Langer Nashat

PERVASISEdelman/

Langer NashatMICROCHIPS

Langer/Cima McGuire

T2Jacks/Cima

Nashat/Crane

SELECTAFarokhzad/

Langer Nashat

SEVENTH SENSE

Langer Crane

ACUSPHERE

Langer McGuire

Polaris Family Tree

ADIMAB

Gerngross McGuire

SUSTAINX

Hutch McGuire

GLYCOFIGerngross/

Hutch McGuire

ALNYLAMSchimmel/

Sharp

ATYRYang/

Watkins Nashat

SIRTRISSinclair/

WestphalCrane/

Bitterman

GENOCEA

Sinclair Bitterman

CUBIST

Schimmel McGuire

KALA

Hanes Bitterman

46% IRR56% IRR 105% IRR

Westphal

TARISCima/Langer Bitterman

KREOGENE

Gerngross McGuire

Proprietary and Confidential 8

ARSANIS

Gerngross McGuire

PULMATRIXEdwards/

Langer McGuire

ARSENALLanger/

WhitesidesMcGuire

480Langer/

WhitesidesMcGuire

XtuitLanger/Jain Crane

POLARIS FAMILY TREE

SUSTAINX

Hutch McGuire

AVITIDE

Gerngross McGuire

En

Polaris Family Tree

105% IRRProprietary and Confidential 9

POLARIS DARTMOUTH FAMILY TREE: POTENTIAL LIVES TOUCHED

Energy Storage >2B

SUSTAINX

Protein drugs > 1B

GLYCOFI

Cancer & autoimmune disorders > 100M

ADIMABKREOGENE

Infectious Diseases > 50M

ARSANIS

AVITIDE

Protein Therapeutics >1B

ASEE EDI Conference

Habib KairouzManaging Partner

Rho Capital Partners

Rho Ventures• 30 year old Venture Capital Firm

– Evolved from a family office to an institutional manager in 1993– Principal activities: Rho Ventures and Rho Fund Investors

• Stage and Sector Agnostic Investment Strategy– Seed to Growth Equity; average cumulative investment of $25mm– Information Technology, New Media, Communication, Alternative Energy, Biotech– Offices in New York, Palo Alto and Montreal– 6 US Funds and 2 Canadian Funds– Latest Funds: RV VI: $500mm in the US and RC II: $100mm in Canada

• Habib Kairouz– Managing Partner– 20 years with the firm– Focus on IT, New Media and Communication– Select Past NY Transactions: iVillage, Tacoda, OMGPOP, Intralinks, EverydayHealth

Our Experience with Universities• Overall limited, and mostly in Biotech and Alternative Energy

• In Information Technology and New Media, mostly working with students launching ideas post graduation rather than with the university itself

– Tripod: Williams

• Select Deals:– Anacor: Penn State and Stanford– Solarbridge: University of Illinois– Enerkem: University of Sherbrooke– Nuventix: Georgia Tech

Current Experience with East Coast Universities

Encouraging Signs

• Growing interest and initiatives from universities:

– Cornell campus in NY– Columbia and NYU Business Plan competitions

• Rising student interest fueled by:– Tough job market– Renewed enthusiasm for startups– Declining capital requirement to launch a startup

• This conference

Frustrations

• Still too many binders of research and patents vs business plans

• Most business plans driven by graduating students vs university initiatives

• Seeing more commercial facing initiatives out of business schools than engineering schools

Recommendations and Wish ListBased on Numerous Meetings with Individuals in Universities

• Initiative has to come from the top: The Dean’s Office

• University and Faculty buy-ins are critical

• Faculty and Students need to follow a structured research path towards commercialization with spinout and funding as objectives

• Licensing office should be very efficient

• Business Schools students should be involved to turn deep science/research into business plans with a value proposition towards addressing large markets and … attracting VC funding

• Present VCs actual business plans vs patents, through structured events and forums

THIS IS A RHO WISH LIST. NO SIZE FITS ALL.

Somak Chattopadhyay, PartnerApril 16, 2013

ASEE Meeting New York City

TVP is an early-stage venture capital firm that partners with world class entrepreneurs in New York leveraging emerging technologies and

business models to create and disrupt huge markets.

Information Technology Innovation: From Core Tech to Applied Tech

1960s Mainframe

1970s Minicomputers

1980s Personal Computers

2000s Internet, E-commerce 1.0

1990s Client/Server

2010s Mobile, Cloud, SaaS, Social

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Numerous market leading tech companies emerged out of Boston and SV university ecosystems

Boston: Teradyne, DEC, Akamai Silicon Valley: Google, Sun, HP, Yahoo

NYC tech exploding but most startups do not come out of university ecosystem Corporate drop-outs, spin-outs, incubators Industries in contraction influencing more people to start their own companies Clusters of innovation much more fragmented and occur around industries (finance,

media, advertising) vs. university labs Not concentrated geographically in same way as Silicon Valley or Boston

In Silicon Valley and Boston, engineers who come out of university often start businesses

and recruit business people later. In NY, it’s reverse (huge opportunity for engineering schools)

Innovation in NYC tech is often in application, content, data layer vs. core tech that is more reliant on university IP (storage, hardware, medical devices, natural language search)

Tech Innovation and Academia: NY metro vs. Silicon Valley and Boston

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Tech entrepreneurship has not (until recently) been a major focus Major employers who have hired grads in NYC historically came from legacy

industries (media/publishing, finance, etc).

No culture of collaboration between depts or coordinated outreach with industry. Lots of fiefdoms and bureaucracy Very little knowledge sharing and cross-pollination of ideas among schools

Universities marketing “entrepreneurship” as a strong focus vs. actually investing in space

Cost of tuition has skyrocketed over last 10 years – very difficult for students to take plunge with soaring student debt

Local schools doing inadequate job of training engineers for tech startups Gap starting to be filled by accelerators and tech schools like General Assembly

Over-reliance on traditional programs in classroom vs. other programs (online, on-site)

Challenges with Today’s Engineering Schools in NYC

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Technical Co-founders –most common complaint of any NYC tech entrepreneurs Universities could play a key role in helping connecting students/alumni

Few technologists trained in key skills needed for startup tech leadership Knowledge of agile software development techniques Thinking architecturally -how decisions impact UX, scalability Recruiting/managing/retaining engineers Communicating with non-tech business leaders or investors

How do you translate business requirements into roadmap How do you make case for key product decision by communicating business

value vs. technical mumbo jumbo or focusing on features? Understanding startup career paths– sales, prod mgmt., CTO, as well as career

progression/comp (what are stock options, how is startup wealth created?)

Why are there not more programs focused on engineering practice school like those that exist at MIT/Stanford– merging academic theory with real-life experience in larger and smaller tech companies?

Human Capital Challenges and Opportunities for Engineering Educators

My Wish List for Engineering Educators Spend more time with local tech companies to understand key hiring needs and invest more in

courses and faculty that will offer students practical experience (ex. Practice School)

Sponsor internships at local tech companies (ex. Turing Fellows Program or HackNY)

Help those of us in industry better understand how to use university resources for our own companies –Encourage knowledge-sharing across departments and between undergrad/grad

Help us connect our companies with university technical talent of all levels –students, alumni, faculty. Provide better ways of identifying top startup talent –decoupling credentialing from learning

Teach students key skills outside of engineering theory Communications, Design, Management Business Plan Competitions – great opportunity to collaborate across schools Understanding of key tech industries in NY – advertising, fin tech, healthcare IT, e-

commerce

Offer cost-effective corporate training for engineers ( similar to General Assembly or via MOOCs)

Invest in multiple sources of instruction -online, offline, group collaboration and find ways to keep tuition costs low. Price to value of undergrad, grad or executive education is not sustainable - forcing many students to avoid startup careers

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