NY STATE GOVERNOR 2011 ECONOMIC DEVELOPMENT INTIATIVE

1. NY STATE GOVERNOR 2011 ECONOMIC DEVELOPMENT INTIATIVE

2. $785 Million NY State Grants, Regional Economic Development Council program Meager Funds for Tech!!!!!! NYC SeedstartAccelerator 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

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

5. ASEE4-16-2013

6. Polaris overview 1996 • FOunded 17 Polaris-founded companies · 475%IRR 18medical products approved · 80million lives touched From 25Universities/Institutes/Teaching Hospitals $3.5B UnDER Management 6 • DIVERSIFIED FUNDS • Pioneering companies • Akamai (MIT) • deCODE Genetics (Beth Israel/Harvard) • WordPress (Automattix) • Alnylam (MIT & Max Planck) • AdiMAB (Dartmouth)

7. Polaris access: Unparalleled university connections 4.5x 176% • Return • IRR 23 companies 161% IRR 46 $900 13 companies 222% IRR Returned to LPs Companies spun out of academia Pervasis 6 companies 105% IRR

8. VISTERRA Ram Crane/Bitterman GENOCEA Xtuit Sinclair Bitterman CERULEAN Langer/Jain Ram Crane/Bitterman Crane AERO DESIGNS PULMATRIX McGuire McGuire Edwards Edwards/ Langer SEVENTH SENSE ATYR SIRTRIS Crane Langer Yang/Watkins Nashat Sinclair/Westphal Crane/ Bitterman MICROCHIPS ARSANIS AVITIDE ADIMAB SUSTAINX KREOGENE Langer/Cima McGuire Gerngross Gerngross Gerngross Gerngross Hutch McGuire McGuire McGuire McGuire McGuire ALNYLAM Schimmel/Sharp SELECTA Farokhzad/ Langer Nashat TRANSFORM Cima/ Langer McGuire GLYCOFI Gerngross/Hutch McGuire KALA PERVASIS ACUSPHERE Langer Hanes Nashat McGuire Edelman/ Langer Bitterman CUBIST Schimmel McGuire Polaris Family Tree Polaris Family Tree TARIS Bitterman Cima/ Langer SUSTAINX Hutch McGuire ARSENAL Langer/ Whitesides McGuire 480 McGuire MOMENTA Langer/ Whitesides Crane Ram/ Langer T2 BIND AIR Nashat/ Crane Jacks/ Cima Nashat Edwards/ Langer McGuire Farokhzad/ Langer Westphal 105% IRR 56% IRR 46% IRR Proprietary and Confidential 8

9. En Polaris Family Tree Polaris Dartmouth Family Tree: Potential Lives Touched ARSANIS Infectious Diseases > 50M AVITIDE Protein Therapeutics >1B SUSTAINX Energy Storage >2B ADIMAB KREOGENE Cancer & autoimmune disorders > 100M GLYCOFI Protein drugs > 1B 105% IRR Proprietary and Confidential 9

10. ASEE EDI Conference Habib Kairouz Managing Partner Rho Capital Partners

11. 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

12. 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

13. Current Experience with East Coast Universities Encouraging Signs 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 • 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

14. 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.

15. Somak Chattopadhyay, Partner April 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.

16. Information Technology Innovation: From Core Tech to Applied Tech 2010s Mobile, Cloud, SaaS, Social 2000s Internet, E-commerce 1.0 1990s Client/Server 1980s Personal Computers 1970s Minicomputers 1960s Mainframe 16

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

18. Challenges with Today’s Engineering Schools in NYC • 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) 18

19. Human Capital Challenges and Opportunities for Engineering Educators • 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? 19

20. 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 20