Staff memo discussion, direction and action regarding key outcomes from city and lab partners meetin

STAFF MEMO To: i-GATE Development Corporation Board of Directors From: Brandon Cardwell Date: September 24th, 2015 Subject: Discussion, direction, and action on key outcomes from City and Lab partner meeting

Summary At the May 7th, 2015, meeting of the i-GATE Development Corporation Board of Directors, a subcommittee of i-GATE’s city and lab funding partners was established to convene with executive director Brandon Cardwell to discuss the funding partners’ long term objectives for i-GATE and determine if they believe i-GATE is on the correct path to achieve those objectives.

The subcommittee met on May 26th, and key outcomes from the meeting are as follows:     

The city and lab partners feel that i-GATE is on the right track and should continue current trajectory while remaining open to new opportunities such as LVOC, additional facilities, etc.

A location on the LVOC may be a future option for i-GATE, but timing and scope of that are yet to be defined City partners are willing to continue fund at some level, as long as there is a strong regional approach and access to companies in the incubator Programs are good, and we need metrics to help tell the story Changes need to happen at the board level: o The i-GATE Development Corporation needs to be the sole organization governing i-GATE; o The Development Corporation board needs to convert to a funders board that is responsible for governance, vision, and advocacy; and o We need to engage an “Entrepreneurs Advisory Group” to assist with program development and support member companies

Recommendation Staff recommends the board discuss the outcomes of the City and Lab partners’ meeting and take action to establish parameters for participating on the i-GATE Development Corporation Board of Directors.

Staff also recommends the board authorize the executive director to take any necessary action(s) to execute the board’s wishes.

Background At the May 7th, 2015, meeting of the i-GATE Development Corporation Board of Directors, the agenda item of alternative organizational structures resulted in a discussion of whether i-GATE’s city and lab partners were satisfied with i-GATE’s current trajectory as an organization. The board established a subcommittee and Chairman Sblendorio appointed members representing the two labs and the four partner cities, along with the executive director, to discuss their perspective on i-GATE’s current status and future objectives. Chairman Sblendorio asked the subcommittee to report the outcomes of the meeting at the next full board meeting.

On May 26th, executive director Brandon Cardwell met with representatives from the cities of Livermore, Dublin, and Pleasanton, the town of Danville, and the two national laboratories. The full attendee list is below: Marc Roberts – City Manager, City of Livermore John Marchand – Mayor, City of Livermore Buck Koonce – Senior Advisor to the Laboratory Director, LLNL Newell Arnerich – Councilmember, Town of Danville Art Pontau – Senior Manager at Sandia National Laboratories Stephanie Beasly – Economic Development Officer, Sandia National Labs Jill Bergman – Economic Development Manager, Town of Danville Nelson Fialho – City Manager, City of Pleasanton David Haubert – Mayor, City of Dublin Chris Foss – City Manager, City of Dublin Brandon Cardwell – Executive Director, i-GATE Innovation Hub Following a presentation by Brandon Cardwell on i-GATE’s current status and possible options for the future, the subcommittee engaged in lengthy discussion on their individual and collective desires for iGATE, dating back to the original inception of the organization. The key outcome from this discussion was a consensus that i-GATE has made important strides and should continue on its current path, while remaining open to new opportunities such as a presence on the Livermore Valley Open Campus, sponsorship or grant opportunities, and possible expansion into additional facilities based on market demand. The city and lab partners did not express a desire for a shift in strategy at this time.

An additional outcome from the subcommittee meeting pertains to i-GATE’s organizational structure.

The bulk of this discussion focused on the redundancy of having two organizations – NEST and the Development Corporation - and the need to move to one organization with one board of directors. This discussion has been ongoing since at least October 2014, when all NEST board members were invited to join the Development Corporation board of directors, ostensibly as a first step toward organizational consolidation.

The Development Corporation was selected for this consolidation because it holds the majority of the assets and liabilities related to i-GATE’s operations, including the lease on the Downtown Livermore facility, the debt to the City of Livermore for the Longard facility, the contracts for critical infrastructure such as internet, water, sewer, and electricity. The NEST organization currently owns the employment agreement with i-GATE community manager Marilyn Eakin.

Following lengthy discussion by all parties about the ideal organizational structure for i-GATE, a consensus was reached that the following actions are necessary for the city and lab funding partners to continue to financially support the organization: 1) Move to a single governing organization – the i-GATE Development Corporation - with one board of directors 2) Convert the Development Corporation board to a “funders’ board” that is responsible for governance, vision, and advocacy; and

3) Engagement of an “entrepreneurs advisory group” to assist with program development and support member companies If the board should choose to pursue these three actions, staff recommends the board take the following actions: 1) Adopt a resolution amending the bylaws of the i-GATE Development Corporation to require an annual financial contribution of at least $5,000 to be eligible for a “funders’ board” seat.

2) Issue an invitation to every non-funding member of the i-GATE Development Corporation board to serve on the Entrepreneurs’ Advisory Group.

3) Authorize the executive director to take the necessary steps to establish the Development Corporation as the sole organization representing i-GATE, including: a. Offer to acquire NEST’s assets and liabilities b. Offer of employment to i-GATE Community Manager Marilyn Eakin, who is currently employed by NEST c. Engagement with legal counsel on any necessary items The discussion of bifurcating the board into funders and non-funders has been ongoing for some time.

The role of the “funders’ board” under this structure would be to provide governance and oversight on fiscal matters, approve a budget, and generally endorse the direction and vision of the organization. The funders’ board would likely meet four times per year, possibly reducing to twice per year as i-GATE continues to make progress toward its goals. The funders’ board would also take on an advocacy role in support of initiatives and areas that are pertinent to i-GATE’s goals. For example, issues like transportation, fiber internet connectivity, regional development, and education are all critical drivers of the long term health of the Tri-Valley startup and business community, and i-GATE’s city and lab partners are uniquely positioned to be effective advocates in those areas.

The advisory group structure put in place by the board at the February 13, 2015, board meeting was intended to serve the function now being described as an “Entrepreneurs Advisory Group.” This group is intended to support the organization by providing mentorship and connections to i-GATE member startups, as well as providing the executive team with critical input on program design and network building. It should be noted that the city and lab partners expressed a strong desire to engage with the Entrepreneurs Group to leverage its expertise and networks toward achieving i-GATE’s mission.

The Development Corporation has no jurisdiction over NEST, as it is a separate entity with its own board of directors. However, taking the aforementioned steps to establish the Development Corporation as the sole representative organization for i-GATE will enable a seamless transition should NEST opt to dissolve or be acquired by the Development Corporation.