tech e February 9,2004

Mayor Anne Marie DeCicco and, Board of Control The Corporation of the City of London, 300 Dufferin Avenue London, ON N6A 4L9

Dear Mayor DeCicco and Board of Control:

TechAlliance greatly appreciates the Corporation also wish to thank Board of Control for setting asid with us to discuss a proposal for the City’s increas attend the Board of Control meeting on February of the Board, Mr. Paul Paolatto, a Director on the

London’s sup ort to date. We r February 11 agenda to meet in TechAlliance. Scheduled to Hank Vander Laan, Chairman

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Attached is a 1-page synopsis of our proposal. d is an advance copy of our full ce, and numerous examples of

region’s knowledge economy. The Return on Investment (ROI) to the City is identified and endorsed in this proposal. I

We are encouraged by the strong support of the business community and the many partners who contribute in various manners to TechAlliance’s initiatives. We look forward to meeting with you to discuss TechAlliance’s contribution to London’s hi&-tech economic growth and to answer any questions you may have in regard to our proposal. 8

Yours truly, +

Joseph Starcevic, President. /j c

Enclosure( s)

Suite 215, 700 Collip Circle UWO Research Park, London, ON N6G 4x8 t. 519.858-5185 f. 519’858-5077 info@techalliance.ca www.techalliance.ca

k

TechAlliance’s Proposal for Increased Municipal Investment

Tech Alliance Background

Two key mandates:

A non-profit organization formed in 2002 by amalgamating London Venture Group (LVG), London High Tech Association, IT London, Biotech London, and Advanced Manufacturing members. LVG assisted 186 companies, of which 20 receiyed a total of $26 million in capital investment. Organizational infi-astructure completed with Board of Directors and Chair, President, and staff. Strong support of the business community and 31 Founding Members (including the City of London).

1. Serve the London region’s economic development, growth, and strategy in high-technology; 2. Serve our members’ business acceleration through exceptional programs and services.

At Present 0

0

0

0

Over 100 members and an increasing demand from the investment community as well. TechAlliance Venture Services has taken on LVG’s role in a volunteer capacity. Five companies presenting at our last Venture Forum have subsequently received $4+ million in investment funding. An increased awareness of TechAlliance’s role regionally and beyond. Key alliances being established to avoid duplication of serviceihnd ensure efficient use of resources. Other revenue-streams added and all are increasiqg over last year’s numbers. TechAlliance is at a critical resource growth stage where increased City investment can ensure large economic wins.

Goals Going Forward

Strengthen Programs and Services to enhance the business acceleration of the companies utilizing us. Implement a communication strategy that focuses on publicizing London’s “Success Stories”. Develop stronger relationships with key partners and all three levels of government. Be a ready resource for the City in key Strategic Planning initiatives.

Value Proposition for the City TechAlliance respectfully requests an increased City investment from $32,000 to $85,000 per annum. This $85,000 is still less than other municipalities’ investment in their technology organizations. We believe this is a relatively small but important investment into a key economic growth catalyst. The significant ROI is identified and endorsed in Appendix #1 of our proposal. TechAlliance will stand behind quantitative measures to ensure this ROI to the City, The City of London benefits directly from the initiatives and relationships TechAlliance is fostering.

J Attracting local and outside investment capital: J Creating a Job Catalyst mechanism by driving start-up and growth businesses. J Harnessing local high-tech expertise in a collaborative and convergent environment. J Developing a Knowledge-Based Image. J Garnering additional National and International Recognition. J Having an increased sense of Community Pride.

Date: February I I, 2004 Presented by: Joseph Starcevic, President Hank Vander Laan - Chair Paul Paolatto - Director

TABLE OF CONTENTS

Executive Summary 3

Background, Board of Directors 4

Vision; Mission Statement; Core Values; Strategies

TechAlliance Venture Services & Overview, Testimonials, Success Stories

;p : L* I"

*+>- - Other Key Programs, Events, and Services

Accomplishments to Date L* 'I

2004 Obje

5

6=11

12

13

14

Financial Picture

Measures of Success

Conclusion

Appendices t & #1: Testimonial on TechAlliance's Economic Impact (€209 !b #2: Letters of Support from the Business Community

15

16

17

18-24

3

EXECUTIVE SUMMARY:

The purpose of this proposal for increased funding is to reinforce the important role that TechAlliance plays in the growth of high-technology business in London and the mentoring of London’s next “success stories” that bels a key part of London’s present and future economy.

TechAlliance has two key customer mandates:

1) Serve the London region’s economic development, growth, and strategy; and 2) Serve our members’ business acceleration by providing exceptional pro&ams & services.

TechAlliance is in a critical resource growth stage at present facilitated by en ever-increasing positive demand from our members and investment community. An increased City investment ensures large additional economic wins for the City of London through TechAlliance initiatives.

TechAlliance recognizes and greatly appreciates the support to date fiom the City of London and respectfblly requests an increase in Civic investment from $32,000 to $85,000 per annum.

We believe this is a relatively small but important investdEpt into a key catalyst for increased economic growth for the city. The significant ROI is identified and endorsed in Appendix #l.

As well as an ROI, the City of London benefits directly fro ther initiatives and relationships London’s business cornmunity: .

dgrowth businesses

Garnering additional National and International Recognition Having an increased sense of Community Pride

The City of London is not alone in partnering with TechAlliance. Our organization is able to make a significant contribution to the growth of this knowledge economy in London through many partners:

Membership fees and volunteer support fiom our members; Professional development and networking services, utilizing regional organizations; Support and in-kind gifts fiom London’s business, educational, and research community; Federal technology and innovation program grants; and Provincial government advisors.

It is especially rewarding to recognize there is not one single core investor, but the combined support of our members, companies, educational and research institutions, and government support that help make TechAlliance an emerging and sustainable success.

4

BACKGROUND

TechAlliance was formed in April, 2002 by merging the London High Tech Association, London Venture Group, IT London Council, Life Sciences Council, and mernbers of the Advanced Manufacturing sector. In the twenty-two months since inception, the alliance boasts a membership of over 100 organizations committed to developing London's new economy. Notable Founding Members include:

3M Canada Company Autodata Solutions Bell Canada City of London Digital Internet Group Inc. Dr. Cal Stiller Ernst & Young Excalibur Communications Fanshawe College Farms.com Fullarton Capital Corp.

Harrison Pensa LLP Honey Design, Mktg & Comm. IBM Canada Ltd. KPMG Labatt Breweries Ontario Lawson Health Research Centre Lerner & Associates Liberate Technologies Canada Ltd. McCarthy Tetrault LLP Microtronix Systems Ltd.

BOARD OF DIRECTORS

Name - Title - Dennis Ensing CFO Warren Granger Partner Paul Johnson John Kime Allan Magrath John Millar Maureen Morton Vice President, Legal Affairs Paul Paolatto President & CEO Nils Petersen (Feb '04) Vice President, Research Lana Phair-Sutherland President & Principal Consultant Blair Poetschke Pres id en t Mark Poznansky President & CEO Liza Scurf President Chirag P. Shah Partner Joseph Starcevic President & CEO Hank Vander Laan (Chair) Chairman of the Board

Advisors Anne Marie DeCicco Mayor Ross Monteith Controller Graham Porter Partner Cecil Shewchuk President

National Research Council (IMTI) PricewaterhouseCoopers LLP RBC Financial Group Robarts Research Institute Selectpath Benefits & Financial Inc. TD Bank Financial Group The Info-Tech Research Group Trojan Technologies Inc. Trudell Medical International University of Western Ontario

Company

Viron Therapeutics Inc. Ernst & Young Fullarton Capital Corporation LEDC

. 3M Canada Company AttachefGroup Inc. Autodata Solutions Keigan Systems University of Western Ontario Phair-Sutherland Consulting SciSense Inc. Ro barts Research Institute Spectrum Human Capital PricewaterhouseCoopers LLP Tech Alliance Trojan Technologies Inc.

City of London City of London Lerners LLP London Technology Group

5

VISION:

‘‘For the London region to be widely recognized as an exceptional environment in which technology companies can start, grow and prosper. ”

The Chair, Board of Directors, TechAlliance staff, our members, and other key stakeholders believe in this vision. We know London has everything it needs to build a strong, significant new economy. These large dedicated groups of business leaders are working to make this vision come true.

MISSION STATEMENT:

“TechAlliance will be a catalyst that will further enhance an increasingly vibrant technology sector in the London region. By actively supporting business in Information Technology, Life Sciences, Advanced Manufacturing and Venture Investment sectors, we will provide the means to accomplish collectively what individual groups are unable to achieve alone. ”

The intention of our mission statement is to e ination to work together with our partners to share ideas, foster valuable co resources, and instill pride in our community. It is our intention to cluster secure London’s hture by enhancing the corn economy. This is embodied in our Core Values:

STRATEGIES:

Act as mentors for high potential start-up companies to become “investment-ready”. Stimulate the growth and expertise of the local high-tech community. Facilitate local linkages and synergies between businesses and between organizations. Address the needs of our members through exceptional programs, events, and services. Participate in strategic business development plans for the greater London area. To be a ready resource, to respond to technology issues and advocacy for our members. Communicate our region’s high-tech successes.

Ultimately, TechAlliance strives to help raise the profile and competencies of the local technology industry, emphasizing that exciting growth is taking place in London in the new economy.

6

PROGRAMS, EVENTS AND SERVICES:

TechAlliance Venture Services (TAVS) is a program aimed at small to medium emerging technology companies to enhance their position for future investment.

Our Venture Services Committee members act as mentors with high potential businesses using an investment acceleration process. Our mentors are volunteers and come highly skilled and experienced in the arena of business investment.

TechAlliance mentors companies because we passionately believe in bringing investment dollars into the London region. Successful capital financing brings additional investment funding, which leads to many trickle up and down benefits, which ultimately leads to a higher standard of living for all in London.

The Venture Services program follows a 5-step process: , * L a

1. Intake 3. Venture Committee Review 5. Investor Contact 2. Assessment & Coaching 4. Investment Ready

The Venture Services program goals are as follows:

Establish a resource pool of quality mentors Implement a selective matching process between entrepreneurs and investors; Facilitate access to financial capital through the establishment of a cal capital pool and Venture Capitalist and Angel Investor networks; Develop local alliances to avoid service duplication and encourage resource efficiency.

0

0

advisors to coach growth companies;

I ’

The above culminates in coordinating periodic Venture Forums, where mentored investment- ready companies present their business plan to established investors.

Continuing this valuable Venture Services program and resource to London region’s business community is critical. The economic impact to the city of London of increased investment funding brings a direct return on investment to the City of London (see Appendix #l).

On the following page are past testimonials fkom London companies who have utilized TechAlliance Venture Services (formerly London Venture Group).

Furthermore, several local company “Success Stories” are highlighted. TechAlliance Venture Services is proud to have played a part in their success. More importantly, we recognize the opportunity to assist other start-ups to become the next round of local success stories.

7

Past Testimonials from London Companies

“With L VG ’s feedback, we got a clear picture of the strengths and weaknesses of our business plan and financing presentation. They gave us concrete recommendations that helped make us Venture Capital ready. ”

John Miller, President Modus Medical Devices

“London Venture Group has been very eflective in providing us with valuable advice on our business plan and access to Venture Capital resources. We are impressed by the professionalism and their ability to go beyond our expectations in delivering the services. ”

Valy Marochko, President DirectB Inc.

“Entrepreneurs substantially improve their chances of getting a meeting with a venture capitalist if they are referred by a credible source, able to clearly and succinctly articulate their business and the investment opportunity, and have a business plan that is properly presented and carefully thought out.

Based on our past experience with the London Venture Group, we know that any opportunity they refer to us will meet the afore-mentioned criteria. This is the value propo#ition that L VG provides to both entrepreneurs and sources of capital. ’’

Peter Day, President Fullarton Capital

t.

“C?D Diamond was formed to commercialize the University of Western financing, we searched the

Ventures Group where business all the way.”

Joe Brennan, President CVD Diamond

Y have been very impressed with the support that L VG has provided to our company. The feedback, tips and financing referrals that we have received have been very helpful in our search for financing. ”

Wayne McLeish, President DRN Commerce

“With L VG mentoring and support we were able to arrange additional equity financing and alternate banking arrangements. Our business is now profitable and our sales are increasing steadily.

It is obvious to both (my partner) and I that we could not have accomplished this without the help of the London Venture Group. We now have a better appreciation of the role they play and how valuable their services are to the small business community, ”

Celine Cartwright, V.P. Marketing Cos Phi Inc.

8

TechAlliance Venture Services Success Story

In 1997, University of Western Ontario was the first academic institution to have an integrated software package to manage its recreational facilities. Until then, multiple, cumbersome, and time-consuming applications were used. BNW Software developed this software specifically for the Recreational/Athletic facilities market as a result of its collaboration with UWO.

The software was initially developed to handle their point of sale needs. Now, BNW-SI processes memberships, course registrations and improves customer service by making as much information as possible readily available to sales staff. It has evolved to handle locker service, towel service, equipment management, ID card printing, card access, and contact management.

Seven years later, the company’s product is installed in 23 of North America’s top academic institutions and 5 YMCAs. In the past vear, the company’s revenue has grown from $270,000 to more than $850,000. And, its employment has tripled in the last 18 months to 10 full-time people.

This growth did not come easy. The company and its founders sought capital from many sources. With

L ” ,

d&

the advice and mentoring of TechAlliance Venture Services, BNW staved focused on meeting the needs of its customers and managing cash flow from the ground up.

The companv was invited bv TechAlliance Venture Senricesto present in Mav 2003 at its Venture Forum in front of selected venture capital investors and local angel investors. Followina this event the companv received a term sheet proposal from an interested- hvestaPand expects to close an eauitv financing in the

Brian Foster, CEO BNW Software Inc. 394 Oxford Street East London, ON N6A 1V7

brian .foster@ bnwsoftware .com (51 9) 850-3939

h tt p ://www. bnwsoftware .co m

9

TechAlliance Venture Services Success Storv

(formerly eHawest. com)

In 1996, a group of London based entrepreneurs started a technology and marketing company that worked with clients in the agriculture and food sector.

Today, Farms.com Ltd. is a leading marketing and information company with a family of operations that provide innovative solutions to the agriculture and food industry. Farms.com can be accessed through their leading agriculture information portal, which has business services and resources for agribusiness, livestock and crop producers.

Farms.com Ltd. has been recognized by Forbes Magazine as "Best of the Web" three times as one of the Top e-Business companies in the world.

technology, marketing strategy, and market Position.

Farms.com went on 'to raise three rounds,of venture capital financincl in the USA market and successfully restructured after the technology market meltdown.

Farms.com has now crown to 45 full time emPlovees, with 28 PeoDle based in dowhtown offices in London, Ontario.

"London needs organizations and PeoPle like TechAlliance" says Dales reflecting upon the opportunity to nurture the local technology industry in the region. "We want to inspire other people in London. Over the next three years, the technology sector is going to grow. There are some really sharp, high tech people here, but we need to develop more entrepreneurs and increased access to capital."

Joe Dales, Co-Founder and Sr. Vice President Farms.com Ltd 148 Fullarton Street, 14th Floor London, ON N6A 5P3

joe.dales@>farms.com 1-877-438-5729

www.farms.com

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TechAlliance Venture Sewices Success Story

formerly ThinkSpace Inc.)

Keigan Systems Inc. is a London-based company that specializes in providing location-based intelligence and decision support software for large enterprises in the defense, energy and telecommunications space. Formerly ThinkSpace Inc, this company was established by three researchers from the University of Western Ontario’s geography department in 1992 and is a graduate of UWO’s Research Park. Since its inception, Keigan has gained an international reputation as a provider of quality software and related services and can now boast a client base of 8,000 private and public users in over 40 countries worldwide.

Keigan Systems is dedicated to ongoing research and develop It has made significant investments in software development and has formed strategic business pa hips with a variety of global software powerhouses, including Oracle, lntergraph and Alion Science and Technology. Keigan Systems continues to foster innovative development efforts with industry and academia to further enhance its technology and value proposition for its customers.

Keigan Systems Inc. is a highly entrepreneurial company that has sitioned itself as a major supplier of decision support and analysis software that requires the use:of location-based data. Keigan software and

subsequently presented again at a TechAliance (TAVS) Venture Forum in May 2003. Despite the industry “tech wreck of the past two years, Keiaan continues to secure outside capital to further expand the company’s proarammina and marketing capability. The company currently employs 15 skilled management and technical personnel with plans to triple in size over the next two years.

Paul Paolatto, President & CEO Keigan Systems incorporated 633 Colborne Street, Suite 250 London, Ontario N6B 4V3 Tel: (51 9) 433-0077 paolatto@keicransystems.com

www. keigansystems.com

. 11

TechAJJiance Venture Sewices Success .Stow

SECT has built a software solution to address the significant challenge of demonstrating electronic compliance in regulated industries. For the life sciences industry, the FDA requirement is a problem estimated to cost $5 billion to address (Gartner, 2001). SECT’S solution addresses the problem by managing electronic signing events and mapping the business process across disparate applications and networks to demonstrate compliance.

SECT provides its customers with the following unique advantages: - - -

allows a person to work in the ad hoc and unstructured way in which they are used to working operates in a decentralized multi-vendor environment provides centralized compliance control, management and auditing of these distributed ad hoc workflows.

One of the founders of the company, a London resident, won the 2003 lvey New Venture Business Plan competition and was invited and coached bv TechAllianct? Venture Services to present in Mav 2003 at its Venture Forum in front of selected venture capital investors and local<,angel investors. Following this event the companv received term sheet proDosals from two interested investors and recentlv closed a $1 million financing lead bv the BDC Technoloav-Seed Investment Fund.

facilitating follow UP meetings. One of its members continues to serve as the companv’s interim CFO. TechAlliance is Droud of its relationship with the lvev Business School and assisting the business opportunities that its students spawn.

Trevor Bain, President & CEO SECT Inc. 243 College St., Suite 100 Toronto, Ontario M5T 1R5

trevor@sectinc.com

h t t p ://www. sect i n c . co m

(416) 971-4360

12

TechAlliance was formed to foster support for the high-technology industry in general and for high-tech businesses in particular. TechAlliance compliments and adds to the strategies and energies of those seeking to grow and retain London’s new economy.

Our PES addresses TechAlliance members’ needs in the Life Science, Advanced Manufacturing, Information Technology and Venturelhvestment sectors. The high value of these programs and subsequent business networking is demonstrated through subsequent collaborative business ventures, skill and knowledge transfer, and advocating and highlighting local expertise:

A general synopsis of TechAlliance’s other key programs, events, and services follows: Peer-to-Peer groups, where individuals fiom different companies but similar roles come together to share best practice and learn from industry experts. High-Tech tailored educational programs and Panel Sessions Networking and publicity focused on the needs and successes of the Technology sectors Strategic planning specifically carried out to create growth in the technology sectors Resources, mentoring and coaching are gathered specifically for the technology sectors Opportunity for members to sit on related Task Forces Staff and advocacy support to our sector Councils’ priorjties and initiatives

Testimonials

“Of all of the Peer group is

“The financial gains have certainly exceeded the costs ofjoining TechAlliance and we expect this to multiply next year as we see more program and service launches as well as a growth in the membership base. Definitely a positive investment for Info-Tech. ”

Lisa Harrison, COO The Info-Tech Research Group

“TechAlliance ’s Panel Sessions are extremely worthwhile. The information provided is excellent and the presenters are clearly experts in thecfield. ”

Sandi Delaney, President Stride Associates

“Being part of an organization that provided as much to its members as TechAlliance was an absolute must for us. Networking within the London business community, the informative events, and the Peer to Peer Groups provides us, as a growing company, access to London businesses ”

Loretta Smith, President Genesis Executive Management

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ACCOMPLISHMENTS TO DATE:

Improved access to capital for London companies through TechAlliance Venture Services (formerly London Venture Group ):

4 In nine years, 200+ companies have been assisted, of which 25 have directly or indirectly received over $30 million in new funding

> Notables: Keigan Systems, CVD Diamond, Farms.com, EK3 Technologies

4 In May 2003,8 companies were mentored for an investor Venture Forum: P 5 companies received new investment funding, at least $4 million identified P 17 new jobs created; 120 new jobs projected in next 1-5 years fkom these 8

companies alone.

Established organizational infrastructure complete with staff, full-time permanent President, and Board of Directors. Recruited 3 1 Founding Members, with total present membership at over 100 members

Increased awareness of Techalliance and its role networking events, peer to peer meetings, tr

Initiated alliances with LEDC, the Chamber, Institute, Lawson Health Research Institute,

technology sectors through nhanced communication.

awe College, Robarts Research ech Commercialization Centre,

TI), Small Business Centre, and

ife Science, and lliance mandate.

Delivered numerous value-added programs, events, and services.

It is important to note that TechAlliance is very similar to a start-up company with enormous potential. While maturing, we respect our accomplishments to date and recognize the best is still to come. Our strength lies in the organization's vision and deeply committed board, staff and volunteers to deliver on our operating plan to the betterment of all London region stakeholders.

When looking at the increased City investment and subsequent company and job growth facilitated directly and indirectly by TechAlliance, the ROI fkom the City of London's funding has an immediate payback and more (see Appendix #l).

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2004 OBJECTIVES

Strategic / Growth (London and Industry Focused)

Be involved in Strategic Business Planning initiatives for the City of London Develop stronger strategic alliances and partnerships with complementing organizations Develop stronger relationships with all three levels of government. Re-launch member Task Forces (Advocacy, Events, Communication, Membership)

0 Join technology associations for greater advocacy strength and best practice

Programs, Events, and Services (Member-Focused)

Further enhance the Venture Services mentoring and investment-matching process lb Bring on an additional resource to deliver all key initiatives. )\. Formalize the 5-step “investor-ready” Program b Establish a local Angel Investor network h Track and communicate the key economi

“Success Stories” * Y

th indicators of the present and future

rtise, distribution lists,

Implement an overall Communication strategy P Enhanced Website, with password protected membership benefits and electronic survey. lb Initiate a bi-weekly e-mail newsletter (Bi-Weekly Connections) b Leverage our Free Press column for success stones, advocacy, and knowledge-sharing. @ Showcase the local talent through “Member Spotlights”. Also work with the London Free

Press and other media to become media partners in this endeavour.

Create a high-technology job board for local organizations to post for others regionally and nationally to access. This is critical in promoting London both internal and external to the city.

Develop joint business education programs with UWO and Fanshawe College

Develop a robust Peer-to-Peer program with “member champions” and added groups.

Stronger value proposition to our larger member companies

Continue to improve and develop robust internal business processes

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FINANCIAL PICTURE

I I Budgeted Costs $360,000 I $286,000

* Key additional (reduced) costs projected this year over last year: 0 Director of Member Programs & Services: $70,000 0 Administrative Assistant $26,000

0 Professional Fees & Operating Expenses ($36,000) 0 Rent and occupancy costs: $12,000

> >

Positive Notes:

$50,000 loan from the city has $800 monthly repayments, commencing September, 2004. TechAlliance’s cash position at start of fiscal year is $20,000.

Membership demand has facilitated the need ditional resources. * *

Every revenue-generating stream is increasing ov Effective internal cost management evidenced by osts reduced by $36,000.

icipal investments at

I OCRIrOttawa - 1996) I $200.000 I 323.000 I $0.62 I ~ ~~ ~

TechAlliance (London - 2004) $ 85,000 336,000 $0.25 $ 32,000 336,000 $0.09

TechAlliance is growing both in membership and value-adding initiatives. With this growth comes an increased demand for programs, events, services, and advocacy tailored to the high- tech industry.

Combined with our internal growth is the oncoming return of the high-tech investment growth in the industry. London requires an organization like TechAlliance to deliver formal and robust Venture Services programs. TechAlliance can only deliver this through dedicated paid resources. The return on investment for the City’s investment of $85,000 is a notion that TechAlliance takes quite seriously and takes on that responsibility.

TechAlliace will stand behind our measures of quantifiable success to demonstrate a return on investment back to the City. These measures of success are on the following page.

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MCEASURES OF SUCCESS:

Quantitative (ROO:

$ Millions of capital investment secured by TechAlliance mentored companies

Increased # of investor-ready companies

Increased # of organizations receiving investment funds

Increased # of new jobs created by TechAlliance mentored companies

# of jobs captured through our on-line job boird

Increased # of TechAlliance members

Budget break- even

Provincial and Federal government innovati

Continued increase in all revenue streams (

/ grants utilized

ent % of total revenue decreases)

Qualitative :

Increa

Increased # of communiquks, newsletters, success stories, publicity, and advocacy

Increased # of mentors utilized within Venture Services

Increased value and number of member programs, events, and services

Increased awareness regionally and beyond of the local expertise right here in London

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CONCLUSION:

The Chair of Techalliance, the Board of Directors, the staff and members of our TechAlliance community are motivated and committed to focusing their efforts toward growing the high technology industry here in London. The testimonials, letters of support and success stories emphasize this point.

TechAlliance is at a critical resource growth stage facilitated by an ever-increasing positive demand fiom members and the investment community. This is a great opportunity for increasing the economic wealth of the City of London and the subsequent benefits for all its citizens.

We encourage the City of London to continue to support TechAlliance with an increased financial investment of $85,000 per mum. TechAlliance believes this is a relatively small investment, with a guaranteed ROI, into a growing opportunity for London's economic growth.

We see this relationship with the City creating a unique opportunity for City employees to have a direct window into the business community and for the business community to appreciate the value of the work done by our Municipal Government.

Most importantly, we believe the valued work o contribution in terms of

Thank you for your support to date, and we look fo for TechAlliance and the City of London.

'ance will more than offset this

e opportunity that presents itself

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Appendix #l - Testimonial on TechAlliance’s Economic Impact to the City of London

RE: ECONOMIC BENEFITS OF TECHALLIANCE TO LONDON (Ron Dear Joseph,

Tracking economic stimulation (the value of TechAlliance to London) is not an exact science. However, I believe I can at least give you a key part of the picture. I looked at the flow of capital ($30 million) into London through the TechAlliance assisted companies.

If one assumes a capital structure of at least 1:l other sources of balance sheet funding (spontaneous credit, bank debt, etc.) to venture capital successfully raised, ee the abovementioned $30,000,000 invested into new London companies multiplied to $60,00 . At 2:1, the initial capitalization available to these startup firms is $90,000,000. This i sh fl9wing directly into London’s economy in the first year of these new company’s lives. Keep are for initial stimulation only, and do not include the incremental stimulation pr om ongoing operations in later years. What happens to this money?

mpany. The development and e. High technology companies a~&, etc. ?hey pay rent, buy

es. This payroll is subsequently spent largely in the local community on everything from housing, food, entertainment, residential property taxes, etc. $60 - $90 million over nine years is an average of $7,000,000 - $10,000,000 of new cash pumped into London’s economy annually! That is just the initial investment into the opening balance sheet. On going cash flow is a multiple of these figures!

Let’s even suggest an incredibly conservative figure of TechAlliance’s direct impact on the $30 million raised at 10%. I know through personal experience with TechAlliance that this percentage is much higher. But even at lo%, the return on investment (ROI) back to the city from TechAlliance’s initiatives is $700,000 to $1,000,000 annually! Keeping with this conservative theme, TechAlliance would need to only assist in $850,000 of initial capitalization annually to London companies to provide the City a 1:l ROI on their $85,000 investment. TechAlliance has already surpassed that this year!

Should you have any questions, please do not hesitate to contact me. Keep up the good work!

Sincerely

Prof. Gerry Higgins Strategic Management Director: Ivey Client Field Project, Ivey Business Consulting Group

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Appendix #2 - Letters of Support from the Business Community

f i b a r t s Letter # 1:

-\ R E s E A R c H

ATTENTION: MAYOR AND BOARD OF CONTROL

RE: LONDON MUST COMPETE

In my travels across much of Ontario, I am seeing the extent to which municipalities are supporting initiatives, which they hope will be transforming in terms of their economies. London has had an illustrious reputation in health care and heath care innovation. It has also had an important role in other high tech initiatives in both the public and private arenas.

We are, however, in danger of falling behind if we do not these initiatives. To my mind, the TechAlliance is a terrific catalyst to do just that. The current leadership of that organization in Hank Vander Laan as Ch as CEO, is excellent and with their leadership, with the s shown) we have the potential to maintain and based economies here in Londo

together to support many of

the board and Joseph Starcevic f the community (already

to stimulate the knowledge-

has now changed and many other municipalities are helping to fund the "overall development'' of the high tech centers in their cities.

I would encourage the administration of the City of London to make sure it keeps pace in all respects, and I very much support TechAlliance's request to the City Manager's Senior Team to fund this program at the level of $7,000 per month.

If there are any points that I might have missed or points on which your require clarification, please don't hesitate to give me a call.

Sincerely,

Mark J. Poznansky, Ph.D. President & Scientific Director Robarts Research Institute

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Letter # 2:

ATTENTION: MAYOR AND BOARD OF CONTROL

RE: SUPPORT FOR TECHALLIANCE

I’m very happy to convey 3M’s continuing strong support for the goals, objectives and programs of the TechAlliance. We were founding members, and through my involvement we continue to play a role on the board.

TechAlliance is a vital facilitator to the creation and sustendce of London’s “high tech” business matrix. Its programs help them grow, find capital, iecure services and get important networking to benchmark others ‘best practices’ whether start-ups or sizeable operations.

In the tough hyper competitive world we live in TechAllianc force in attracting and growing our knowledge base employment and growth will emanate.

sures London remains a vital inesses fiom which much future

Sincerely,

3M CANADA COMPANY A. J. Magrath Director Corporate Marketing

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Letter # 3:

Trojan Technologies Inc.

ATTENTION: MAYOR AND BOARD OF CONTROL

RE: SUPPORT FOR TECHALLIANCE

I would like to briefly express my own and Trojan's conviction that we are in full support of London TechAlliance. We at Trojan have supported this initiative right fiom the outset since we strongly believe that our city needs to speak with a united and professional voice both within and beyond our city.

We also believe that the strategic direction setting most difficult stage of this new organization and see it through. Our expectations for results are long term, to a significant degree fiom the various initiatives offered industry as well as the city. We have not only committed our financial support but also

ce is currently engaged in is the all of our combined efforts to ough we have already benefited y, and require the support from

that will make our city world class. We commit ourselves,to not withdraw f?om that but to be proactive to realize that vision together. Tech Alliance, along with the LEDC, and The Chamber of Commerce will be able to serve our city with a strategy and vision that will make our collective investment realize returns over time.

We know and appreciate that there are plenty of requests for taxpayers' dollars before you. We strongly believe you should consider the London Tech Alliance as an equity investment and not as an expense.

Thank you for giving this request your special consideration.

Yours sincerely,

TROJAN TECHNOLOGIES Marvin DeVries President & CEO

Letter # 4:

ATTENTION: MAYOR AND BOARD OF CONTROL

RE: SUPPORT FOR TECHALLIANCE

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Keigan Systems, like many hi-tech companies in the area, have benefited fiom the mentoring and networking services offered by TechAlliance. In my opinion, London’s hi-tech presence will match and likely exceed that of Waterloo’s in the next ten years, in large measure due to the work of organizations such as the TechAlliance. Jos arcevic and his small team work diligently to help local entrepreneurs cost-effective1 ly build their businesses.

They also provide a highly useful gathering point for capital, sweat equity and great ideas to come together and realize new and exciting te gical advances. Finally, I have witnessed the terrific job the TechAlliance and its predecessor organizations has done to raise the

ning businesses so consider the

creation of new business a key element of any successful economic development initiative. TechAlliance helps fulfill this service.

More importantly, TechAlliance has already proven its value by virtue of its contribution to the development and maturation of several new hi-tech companies over the past five years. As a taxpayer, I appreciate the competing demands of your constituents given a finite number of resources.

However, fiom a purely business perspective, I can think of no greater return on investment for the city and I ask that you throw your support behind the continued fimding of this endeavour. London needs to maintain its emerging hi-tech presence and the TechAlliance can help make that happen.

Regards,

Paul Paolatto President and Chief Executive Officer Keigan Systems

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ATTENTION: MAYOR AND BOARD OF CONTROL

RE: SUPPORT FOR TECHALLIANCE

I am providing this letter in conjunction with our support of TechAlliance of southwestern Ontario. We have been involved with TechAlliance since its inception and are proud to be one of its founding sponsors. TechAlliance has brought together a number of previously disparate organizations with a combined focus and centralized resources.

By centralizing these efforts, we believe the organization is better equipped to deliver value and position London as a competitive centre for business and financial support of Techalliance as we believe in it development of business in the London region. We evidenced through the list of founding members and s

. We have continued our ion of growth and in this vision which is TechAlliance.

In its short existence, Techalliance has already st business community. The City will benefit fi;

ivering value back to the London alized image, ability to attract outside

on a national "and international ces and fostering

We recognize that the City of London has been a key supporter of TechAlliance in the past and we would hope that you will give their request due consideration as part of your upcoming budget deliberations.

Kind regards,

Tom Mitchell Managing Partner - London PricewatehouseCoopers LLP

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ATTENTION: MAYOR AND BOARD OF CONTROL

RE: SUPPORT FOR TECHALLIANCE

I am pleased to confirm my support for increased fbnding for TechAlliance. Having worked for almost thirty years in the area of new business start-up and growth, I have developed sound insight on what is required to enable a new enterprise to become established and grow to a healthy, self sustaining member of the local business community.

Success requires smart, patient capital deployed in a disciplined manner. This is what makes TechAlliance Venture Services (TAVS) so relevant. almost ten years, TAVS and its members have been mentoring entrepreneurs to demons o potential investors that they can take a great idea and turn it into a successful enterprise. Smart equity investors invest in people, not technology. Investors want to see entrepreneurs who have a well organized, properly staffed business plan. TAVS 's mentoring teaches business

lliance startup companies and I have gether to- the benefit of the

business commmt . $roof of success is found enthre Group) has guided

entrepreneurs through the capital investment process, resulting directly and indirectly in more than $30,000,000 in new capital being deployed into London companies. 'New businesses that most likely would not have been fhded had it not been for TechAlliance's direct mentoring.

TechAlliance has accomplished a great deal with limited resources. TechAlliance has a great resource in the combined experience of its members and interested professionals in the London business community. TechAlliance needs to build a strong core of managers who can leverage the energy and skills of its members.

My strong recommendation is for TechAlliance to seek the $85,000 this year and to develop an even more aggressive growth plan for the future. It is now time to move forward.

Should you have any questions about the above, please do not hesitate to contact me.

Sincerely

Prof. Gerry Higgins Strategic Management Director: Ivey Client Field Project, Ivey Business Consulting Group