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July 16, 2013 Dear Indiana Entrepreneurial Community Stakeholders: On behalf of Elevate Ventures, I would like to express our support of Governor Pence’s directive in serving as a fiduciary of the public interest. The Indiana Economic Development Corporation (“IEDC”) has been a highly-valued partner to our efforts. We look forward to the review and any subsequent recommendations. Elevate Ventures started conducting business in March 2011, as our former Governor Mitch Daniels took a progressive step towards catalyzing private sector participation in assisting and investing in high-potential Indiana companies. This was a natural evolution of the 21 Fund, which moved from a grant-giving entity to a provider of targeted resources to innovation-based startups. Several key lessons were learned in that process: ̶ ̶

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Public dollars alone cannot fill the funding gaps in the Indiana entrepreneurial ecosystem. It takes entrepreneurial and business development expertise, not just capital, to translate innovative research into high-growth potential, commercial impact, and sustained job creation, hence the Entrepreneur-in-Residence model under Elevate Ventures. Investment of public dollars should be aligned with the private sector interest to ensure protection of public interest.

Through Elevate Ventures, we now have a mechanism to hold equity on behalf of the IEDC and for the benefit of the State of Indiana and its taxpayers, thereby enabling the state to capture returns on the same private-sector terms, and reinvest in future ventures. With Elevate Ventures, we also have an independent and apolitical nonprofit to solicit operating and investment dollars from other public, private and philanthropic sources, further leveraging state dollars. To these aims, we believe it to be important to note the following: ̶

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Elevate Ventures was a crucial element to the State’s ability to receive up to $34.3 million and set up investment and lending programs under the U.S. Department of the Treasury’s State Small Business Credit Initiative (“SSBCI”). Elevate Ventures has raised over $2.6 million in private dollars to support its activities in Indiana communities. For every public dollar invested in our portfolio of Indiana companies, the amount of private dollars has increased from $1.2 in 2009 to $5 in 2013. Since 2009, over $11 million 21 Fund dollars have been recaptured through collective recovery and restructuring efforts by the IEDC and Elevate Ventures.

In summary, as referenced in the fact sheet enclosed herein, Indiana is now on the national map as the venture development model touted by other states including North Carolina and Wisconsin. In addition to these early results, I would like to communicate the following: ̶ ̶

Howard Bates was recruited by the state to help set up Elevate Ventures, because he is one of Indiana’s leading entrepreneurs. Elevate Ventures is governed by a Board of Directors comprised of key business and community leaders around the state.

 


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Previous 21 Fund staff underwent the Indiana State Ethics Commission review before their transition to Elevate Ventures. SSBCI investment policies as well as 21 Fund investment policies and recommendations are overseen by the IEDC, not Elevate Ventures’ Board of Directors. All Indiana Angel Network Fund investments were made under the SSBCI program policies and guidelines, and all went through the normal Elevate Ventures’ extensive due diligence process. All SSBCI and 21 Fund information are publicly available through annual reports, website, press releases, etc. In compliance with the Elevate Ventures’ conflicts of interest policy, any interested person made disclosures and was strictly recused from the investment process. As an independent entity, Elevate Ventures is audited by the U.S. Department of the Treasury, the IEDC, and a third-party auditor. A Department of the Treasury program-wide audit was scheduled for 2013 prior to the Star inquiry, and we will continue to prepare for the upcoming review as part of the normal business activity.

Last but not least, none of Elevate Ventures’ personnel has any personal financial interest in any of these investment transactions. Our end goal is to see Indiana companies succeed, through which, any wealth created, including return generated from public dollars, is recycled back to the State and to our entrepreneurial communities. We are working diligently to create a truly vibrant entrepreneurial ecosystem with reduced need for additional taxpayers’ dollars. We remain committed and passionate as before, and look forward to continuing this journey with you. Should you have any questions or need further information, please do not hesitate to call us at 317-252-0258 or email my assistant Alex Bowers directly at abowers@elevateventures.com.

Kind regards,

Steve Hourigan Chief Executive Officer Elevate Ventures, Inc.

Enclosure: Elevate Ventures Fact Sheet


Elevate Ventures Transformative - we work across the continuum of resources needed to grow companies. §

Utilize federal dollars from the Treasury’s SSBCI program to fill earlier stage investment capital gap.

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Deploy state dollars to provide early growth capital and attract institutional investment into Indiana companies.

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Work with a network of in-state and out-of-state investors to catalyze private-sector participation.

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Several of these executives have gone on to help lead Indiana startups, further protecting Hoosier investments. Our Economic Gardening program offers assistance to high-potential second-stage companies with $750K to $10M in revenue. §

We have launched a high potential start-up grant program for deserving entrepreneurs in St. Joseph, Kosciusko, Elkhart, Marshall, LaGrange, Noble, Whitley, Wabash, Huntington, Steuben, De Kalb, Allen, Wells, and Adams counties.

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We have also launched a Diversity Investment Fund dedicated to entrepreneurial activities by women, minorities, and veterans.

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April 2011- April 2013

Elevate Ventures is a 501(c)(3) nonprofit organization, with a mission to develop and nurture emerging and existing highpotential businesses into high-performing Indianabased companies.

Our Entrepreneurs-In-Residence program has attracted top business talent from around the country to assist and mentor Indiana entrepreneurs.

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Fact Sheet

Elevate Ventures is preparing to launch a fund targeted at food and

We accomplish this by providing rigorous business analysis and robust advisory services that connect companies with the resources they need to succeed long-term. As a notfor-profit organization, we are able to offer unbiased, in-depth perspective and recommendations.

agricultural innovation. §

We are partnering with academic institutions to jointly promote and invest in university-derived technology commercialization activities.

Start here. Go further. Elevate Ventures

In two years since Elevate Ventures’ formation, Indiana is now on the national map as a model for venture development touted by states like North Carolina, Wisconsin, and California. 1


Collaborative – we aggregate resources to leverage state dollars.

Portfolio Notables

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§ SmarterRemarketer: 2013 Tier50 Top Start-

Local communities in Northern Indiana have committed nearly $2.2 million of private dollars to help Elevate jumpstart local entrepreneurship.

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Southwest Indiana business executives have raised nearly $300K to allow placement of full-time Elevate resources to support the area.

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Elevate co-invests with local and regional institutional investors without the same carried interest arrangement. A number of these investors received financial support from 21 Fund at their fund formation stages, such as

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up (winner) § SmarterRemarketer: 2013 TechPoint Mira Awards Tech Start-up of the Year (winner) § SmarterRemarketer: 2013 American Business Awards -Stevie's Top New Product (finalist) § Emerging Threats Pro: 2013 TechPoint

BioCrossroads Seed Fund, Allos Ventures, and Midpoint Food & Ag Fund

Mira Awards Tech Start-up of the Year

now known as Cultivian Ventures.

(honorable mention)

Elevate has increased the amount of private dollars per public dollar invested from 1.2:1 in 2009 to 5:1 today.

§ hc1.com: 2013 Red Herring Top 100 North America Award (winner) § hc1.com: 2013 TechPoint Mira Awards

Results-oriented – we operate at the speed of business. §

Elevate Ventures has formalized processes around due diligence and ongoing asset management that have fundamentally transformed the way Indiana taxpayer dollars are invested in high growth opportunities.

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Now the state’s funds can take financial positions in companies on the same private-sector terms through Elevate Ventures, to generate returns and reinvest in future ventures.

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Engaged 900 companies and entrepreneurs, and advisory services totaled more than 20,000 hours.

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Elevate Ventures has helped at least 25 companies raise investment capital without the need for public dollars.

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We made Angel Fund investment commitment to 15 companies and have now completed investment into 9, in addition to 6 investment recommendations to 21 Fund.

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Economic Gardening services have been delivered to more than 75 second-stage Indiana companies to the tune of more than 3,000 hours.

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Based on 38 Economic Gardening companies surveyed, revenue in aggregate grew from $107.5 million in 2011 to $133.2 million in 2012 and projects to be $172.6 million in 2013, leading to 27% average annual growth rate; jobs in aggregate increased from 747 in 2011 to 936 in 2012 and projects to be 1120 in 2013, averaging 22.5% growth per year.

Elevate Ventures

Health Information Technology Excellence & Innovation (winner) § BidPal: 2013 TechPoint Mira Awards Mobile Technology Excellence & Innovation (winner) § BidPal: 2013 TechPoint Mira Awards Emerging Technology Company of the Year (winner) § Indigo BioSystems: 2013 TechPoint Mira Awards Innovation of the Year (winner) § Cloud One: 2012 IBM Beacon Award Finalist § Jada Beauty: 2012 Top 10 Honoree, L'Oreal's Women in Digital NEXT Award § Fast BioMedical: 2012 "Innovators Row" finalist at American Society of Nephrology Global Conference § Wolfe Diversified Industries: 2012 Inc 5000 ranking of #62 in Education

§ Courseload: 2013 IMS Gold-level Global Learning Impact Award st

50 East 91 Street, Suite 213 Indianapolis, IN 46240 317.252.0258 elevateventures.com

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Elevate Ventures letter to stakeholders