Monty Estes, Board Member, Upstate Venture Association of New

UVANY Mission Statement

The Upstate Venture Association of New York is an organization of venture

capital firms and others sharing the common goals of advancing the

number, scale and quality of angel, seed, venture and private equity

capital investments across

New York State.

UVANY-Basis of a Deal Community

AngelInvestors

SeedCapital

VentureCapital

PrivateEquity

Economic DevelopmentIndustrial Development Agencies

Legal-Accounting-Banks-Commercial FinanceInvestment Bankers-Intermediaries-Consultants

UVANY Focus Raise the level of awareness of capital

available to upstate Raise the level of understanding of angel,

seed, venture and private equity Provide forums where capital providers, those

looking for capital, advisors, and other interested parties can meet.

“Raising Capital in Upstate New York – Five Success

Stories”

“Raising Capital in Central New York – Five Success Stories”

Advion BioSciences, Inc.

Ithaca, NY

John Nozell, Executive VP & CFO

“Raising Capital in Central New York – Five Success Stories”

USA Datanet

Syracuse, NY

David Montanaro, President

“Raising Capital in Central New York – Five Success Stories”

Monarch Machine Tools

Cortland, NY

Mark Quinn, President of Monarch

Scott Murphy, Advantage Capital

“Raising Capital in Central New York – Five Success Stories”

Terakete

Syracuse, NY

Mac Cummings, President, CEO

“Raising Capital in Central New York – Five Success Stories”

UStec

Rochester, NY (Victor, NY)

Lynn Hartrick, CEO

“Entrepreneurs Minute”

Basis for Growing Deal Community University Research Expenditures

Each Year $1.2 billion Among five universities

Cornell SUNY Research Foundation University of Buffalo University of Rochester Rochester Institute of Technology

Commercialization PotentialLevel of Research Activity at Universities

• Our total regional R&D expenditures have grown to over $1B• Where are the commercializable technologies / start-ups?• Are there latent high-tech ideas could be basis for startup companies?• Can we possibly do some deeper mining at universities?

Cornell ~$500M

U of R~$300M

UB~$250M

Syracuse~$50 M

RIT$20 M

Alfred$10 M

SUNY Binghamton

~$30M

Basis for Growing Deal Community

New York State Common Retirement Fund investing in Upstate Funds Supporter of upstate equity funds Funded/funding 10 funds Over $250 million placed to date

Basis for Growing Deal Community New Upstate Capital-Last 3 years

Albany FA Technology Ventures High Peaks Venture Partners Adirondack Venture Fund TS Capital

Basis for A Growing Deal Community

New Upstate Capital-Last 3 years Syracuse

Exponential Business Development/Newtek Capital Onondaga Venture Capital Fund

Basis for A Growing Deal Community New Upstate Capital-Last 3 years

Rochester/Ithaca Cephas Capital Partners DeltaPoint Capital Genesis Fund Trillium Group

University Seed Fund Monroe Fund Lakefront Partners II

Cayuga Venture Fund Angel Community

Basis for A Growing Deal Community New Upstate Capital-Last 3 years

Buffalo Rand Capital Corp. Summer Street Capital Partners First Wave Western New York Technology Fund Angel Community

Basis for Growing Deal Community

New Upstate Capital-Last 3 years CAPCO Funds

Advantage Capital Partners Enhanced Capital Partners NYCIC Stonehenge Capital Corp.

Basis for Growing Deal Community Additional funds interested in Upstate

Brook Venture Partners-Boston Easton-Hunt Capital Partners- NYC Ascend Capital Venture Group-NYC Founders Equity-NYC HSBC Capital-NYC Resilience Capital Partners-Cleveland RoyNat Capital-Cleveland

Deal Community’s Opportunities

Angel, Seed, Venture Opportunities Need for funding Need legal advisors Need accounting advisors Need entrepreneurial talent Need banking facilities

Rand Capital, Seed Cap Partners, Trillium

Summer Street, Cap. Formation Group, FA Tech.

Founders, Universities, Grants Concept / Pre-Seed

Later Rounds

“B” Round

“A” Round

Seed

$2M $6M $8M $10M $4M $20M

Pre-Money Valuation

$30M

Source: PWC MoneyTree, Venture One

The Need for Seed CapitalThe Need for Seed Capital

Rand Capital, Trillium Group, High Peaks Venture Partners

Summer Street, Delta Point Partners, FA Technology Partners

University Technology Partners

Technology Investments% of Total U.S. Investments

Seed Stage vs. All Alternative Asset Classes

Seed v. First Round Investment in 2000

Deals $ Invest

Seed Stage 142 $232 million

First Round 1,937 $22 billion

Deals by Investment Stage

Deal Community’s Opportunities

Large number of $5-75MM companies Many are candidates for transactions….

Growth Capital Management buy-outs Generational change Divestiture/Acquisition Recapitalization Turnaround Sale/Buy-out

Upstate Opportunities-Summarized

Upstate has an array of investment opportunities New equity funds Existing funds are raising new funds New Funds tend to be larger Non-resident fund investing in upstate Upstate has the advisor base UVANY’s mission is to advance VC/private

equity………

UVANY Board of Directors

Gary Hull, Summer Street Capital Partners President

Bela Musits, High Peaks Venture Partners Vice Pres.

John Cococcia, FA Technology Ventures Treasurer

Monty Estes, Genesis Fund LP Secretary

Dennis DeLeo, Trillium Group, LLC

Dirk Sonneborn, Exponential/Newtek

David Waterman, Delta Point Capital Management, LLC

UVANY Membership

Regular Membership

Associate Membership

Upstate Venture Association of New York, Inc.

Bob BuckleyExecutive Director

385 Jordan Road

Troy, NY 12180

Phone: (518) 283-8890

Fax: (518) 283-8172

Email: bob@uvany.com

Website: www.uvany.com

Other Developmental

Forces at Work in

Upstate New York

Pre Seed Workshops

University of Rochester Rochester Institute of Technology University of Buffalo Cornell University Others in planning stages

New York State Initiatives Comptroller’s investments Centers of Excellence in:

Bioinformatics (Buffalo) Environmental Services (Syracuse) Infotonics (Greater Rochester) Nanoelectronic (Albany) Wireless Internet & Information Technology (Stoney

Brook) Capco Program

New York State Initiatives (cont) Excell NY Programs Star Centers – eight centers CAT Centers – 14 centers ARC Centers – five centers Science and Technology Law Centers - Syracuse

Law School NYSTAR Technology Transfer Incentive Program Small Business Technology Investment Fund

University Based Efforts Cornell’s EPE Program University of Rochester’s Entrepreneurship

Programs University of Buffalo’s Entrepreneurship Programs Rochester Institute of Technology's

Entrepreneurship Programs and Incubator UNYTECH 03, 04, 05 Syracuse University Science & Tech Law Center SUNY Research Foundation

Upstate New York University Offices of Tech Transfer

STOR – University of Buffalo OTT – University of Rochester River Campus OTT – University of Rochester Medical Center OTT – Rochester Institute of Technology CCTEC – Cornell University OTT – Syracuse University OTT – SUNY Binghamton OTT – SUNY Albany OTT – SUNY Research Foundation

RF, Central Office

• 64 Campuses• 410,000+ students • 6,600+ fields of study

Local Efforts GRE High Tech Rochester High Tech Business Council Incubators Colleges & Universities Monroe County Economic Development (Rocco DiGiovanni) New York State Economic Development (Jack Kinnicutt) City of Rochester Economic Development Department

(Fashun Ku) Entrepreneurs and Angels

Local Efforts Rochester Business Alliance RDDC Rump Group CGR Digital Rochester eBusiness Association COMIDA Rochester Venture Capital Association RIPN

“The best way to predict the

future is to create it”

Dr. Peter F. Drucker

Before the Negotiations:

What Entrepreneurs Need to KnowAbout Seed and Early Stage Venture Capital

A White Paper Primarily for Entrepreneurs in Upstate New York

Judith J. Albers, Ph.D.

Trillium Group

February 2005

G          R           0

500 Linden Oaks585-383-5680

www.trillium-group.com

Jaeckle Fleischmann & Mugel, LLP

190 Linden Oaks

Rochester, New York 14625-2812

Telephone: 585.899.2930

Facsimile: 585.899.2931

E-mail: mestes@jaeckle.com

J. Montieth Estes