Ben Franklin Technology Development Authority

BEN FRANKLIN TECHNOLOGY DEVELOPMENT AUTHORITY KEYSTONE INNOVATION ZONE PROGRAM PROJECT SUMMARY

Applicant: Northwest PA Regional Planning & Development Commission

Amount Requested: $187,500

Amount Received to Date: $250,000

Name of Project: Northwest Pennsylvania Keystone Innovation Zone Round Two Funding

BFTDA Funding Uses: Zone Operating Costs

BFTDA Funding:

Administration; Coordinator/Operating Expenses $103,500 Programmatic Entrepreneur Infrastructure $ 0 Regional Coordination $ 0 Focus Industry Student Interns $ 24,000 Business Research Services $ 0 Marketing (Outreach/Public Education) $ 0 Capital Assistance Grants $ 60,000

Total $187,500

Match Funding:

Administration Coordinator/Operating Expenses $ 31,950 Programmatic Entrepreneur Infrastructure $102,800 Regional Coordination $ 3,405 Focus Industry Student Interns $ 9,000 Business Research Services $ 53,765 Lab Space $ 45,280 Marketing (Outreach/Public Education) $ 3,000 Capital Assistance Grants $ 63,300

Total $312,500

Match: Allegheny College ($25,500); Clarion University ($165,250); Thiel College ($28,000); Northwest Regional Planning & Development Commission ($31,950); Ben Franklin CNP ($61,800).

BFTDA Board Meeting 1 October 22, 2009 Educational Partners: Allegheny College, Clarion University, University of Pittsburgh – Titusville, Thiel College

Target Industry Sectors:  Advanced Manufacturing  Clean Technology  Information Technology  Life Sciences

Deliverables Achieved With Round One Funding and Proposed Deliverables to be Achieved with Round Two Funding:

DELIVERA Round One Round One Round Two BLE Proposed Achieved Proposed Jobs Created 20 17 10

Jobs Retained 20 57 40 Interns Placed 15 21 25 Funds Leveraged $500,000 $1,148,641 $750,000 New Company Formation 4 7 8

Businesses Assisted 20 17 20 Facilitate 5 new projects that lead to corporate partnerships/research contracts with KIZ – 4 3 5 academic partners

Program Highlights and Achievements from Round One Funding Cycle:

Entrepreneur Training Events The Clarion SBDC, through the financial support of NWPA KIZ partners Clarion University and the Northwest Commission, hosted nine KIZ sponsored events during NWPA KIZ’s first funding cycle. With an average attendance of 16 people, these workshops include topics on networking skills, legal and insurance structures, tax tips, evaluating the price of your product and service, customer service, succession planning, marketing tips, internet security, and tax tips. These workshops provide companies the opportunity to get one-on-one information on how to maintain and grow their business.

Additional training events titled, Commercializing Your Idea, Product Development for Entrepreneurs, Small Business Innovation Research Grants, and Research & Development Tax Credits, were presented in conjunction with PennTAP, KIZ Resources, and the Innovation Partnership. The NWPA KIZ company, Clarion Research Group, has utilized the information on Small Business Innovation Research and is now in the process of applying for a SBIR Grant. After attending the workshop on Research and Development Tax Credits, the KIZ company, Optical Filters, has set up the necessary administration needed to track the activity and file for

BFTDA Board Meeting 2 October 22, 2009 this credit. Between 45-50 regional entrepreneurs and 10-15 Allegheny students attended the Regional Biomass Meeting held at Allegheny College. The KIZ company, Ernst Biomass, was a presenter at this meeting and provided information on growing and potential markets for switchgrass.

Internship Program Seventeen NWPA KIZ funded interns were placed with seven KIZ companies, partners, and partnering institutions of higher education to support the work of the KIZ during the first round of funding. The NWPA Internship Program provides students with “real world” work experience at a start-up business and gives students an understanding of what it takes to be an entrepreneur while providing a great opportunity for participating NWPA companies to experience local talent at the IHEs. Prior to the NWPA KIZ, only one of the seven KIZ companies had previously utilized the higher education institutions for student assistance. This benefit has worked to provide the awareness that local talent does exist at our IHEs and that cutting edge companies in the region are looking for talented individuals. The companies using the interns have shared that the completion of their respective projects would not have been accomplished without this assistance. Michael Dent from the KIZ company Optical Filters stated that, “the information gathered from the intern’s study is ground breaking for our industry and will be a valuable design tool for the company and our customers.”

Micro Grant Program Seven companies received assistance through the NWPA PA KIZ Micro Grant program, which is designed to support innovative research projects that create marketable technologies, generate startup or early stage growth companies, and job creation within the KIZ and the Commonwealth. Steve Warner is the VP of Marketing for Novocell Semiconductor, a NWPA KIZ company that designs and licenses One-Time Programmable (OPT) embedded, non- volatile memory blocks on microchips. He has stated that “with the assistance provided by the KIZ Micro Grant Award, the company was able to purchase essential test equipment that moved the company to the next level of development and facilitate great advancements in R&D.” Another micro grant awardee, Greenville Neuromodulation Services, has developed a micro- targeting platform used in deep brain stimulation. This product is less cumbersome and available for a fraction of the cost of the device currently used. The award will provide the resources needed to train comprehensive procedural specialists who will provide a competitive advantage to the current technology.

Collaborative Business Plan Competition The NWPA KIZ has partnered with the Erie and Tri-County KIZs, eBizIT PA, Ben Franklin Partners, and the Venture Investment Forum to sponsor the 2010 NWPA College Business Plan Competition and encouraging all NWPA KIZ companies to participate. The deadline for submissions is December 4, 2009.

National Entrepreneurship Week NWPA KIZ’s institutes of higher education (IHE) partners participated in National Entrepreneurship Week, raising awareness of the importance of entrepreneurship and bringing entrepreneurial alumni to the region to share information. During the first funding cycle, over 40 NWPA IHE students participated in local and regional business plan competitions such as the Gator Challenge and the Tepper Challenge. This year, a student with potential to become a KIZ company as a result of his innovative product came in 2nd in the Tepper Challenge and received an Adobe Innovation Prize for his invention. This student also received the Scholar of the Year Award, and Allegheny College allocated some of their cash match to support business R&D that led to the company becoming an LLC.

BFTDA Board Meeting 3 October 22, 2009 Marketing & Outreach An independent website for the NWPA KIZ was developed this summer by students at Allegheny College. The website will be a valuable resource for entrepreneurs, businesses, service providers and faculty. Information on available NWPA KIZ services and resources (i.e., R&D resources, paid internships, IHE mentors, training opportunities, and local micro grants) will be accessible to the NWPA KIZ’s targeted audiences. Website development will continue as new resources are developed for the KIZ. The site can be viewed at: http://nefex.net/KIZ2/index.html until a domain name is secured.

KISK Grant Award Clarion University, a NWPA KIZ partnering higher education institution, received a $130,000 Keystone Innovation Starter Kit grant to support development of intellectual property and commercialization in Nanotechnology. The KISK Grant will directly support the faculty research member and establish a Nanotechnology Applied Research Laboratory to conduct research related to nano-diamond production and commercialization for the KIZ pipeline company, NanoBlox. This research effort will create one full time position and two additional part-time student internship positions. Upon the company’s move to KIZ designated space, NanoBlox anticipates it will create 10-18 new jobs within 2 years as it develops its research and production facilities in Clarion.

Program Activities to be Achieved with Round Two Funding: During the second funding cycle, the NWPA KIZ will focus on enhancing its existing programs and implementing and executing new programs that grow and strengthen the KIZ network in Northwest Pennsylvania. Outreach initiatives will increase to raise awareness of the NWPA KIZ program in an effort to attract more pipeline companies. This will also encourage more students and faculty to investigate opportunities for new company creation and the commercialization of technologies developed on campuses. Improved connectivity in the region among the IHEs, potential and existing KIZ companies and the KIZ coordinator will result in a stronger network to deliver services uniformly.

Company Connection Facilitation Relationships among NWPA KIZ companies and faculty at participating IHEs will be strengthened through a series of meet and greet events that help introduce company representatives to interested faculty and students. In addition, a listing of faculty expertise and capabilities is being developed for distribution and will be available on the NWPA KIZ website. NWPA KIZ plans to explore the organization of regional action team consortia that will strengthen the relationship among the institutions of higher education and innovation-based companies within the KIZ. Each of the counties NWPA KIZ covers will identify an institution of higher education and a local economic development representative to represent their respective county. These four teams will form the regional action team that will focus on improving research capacity, connecting faculty and service providers with industry, and working to turn that capacity into marketable business generators. This regional consortium will develop a baseline understanding of the strengths and needs of the research performers within the region that are aligned with KIZ prioritized industry sectors.

To increase private-sector commercialization and innovation by small businesses, the NWPA KIZ will work toward increasing the awareness of the opportunities presented by the federal government’s Small Business Innovation Research and Small Business Technology Transfer programs through entrepreneurial workshops offered by the Innovation Partnership. These workshops offer the best opportunity for new patent development and ultimate

BFTDA Board Meeting 4 October 22, 2009 commercialization due to the federal government’s identification of the need for a particular innovation or problem solving technique.

Curriculum Development The NWPA KIZ partnering IHEs will review their existing curriculum to identify gaps in available training and develop new curriculum geared to entrepreneurship at all educational levels. This resulting new curriculum would include educational services related to technology training and curriculum development that will emphasize work ethic and workforce program development via the internet and outreach workshops.

Collaboration The NWPA KIZ will continue to offer training to businesses and entrepreneurs collaboratively through the Zone’s partnering organizations. NWPA KIZ will also continue to partner with eBizIT PA, Ben Franklin Technology Partners, and neighboring KIZs in future Northwest PA College business plan competitions that promote innovation and development of skills necessary for successful growth of the target industries in the region. All new and existing programs will be examined for partnering opportunities that would offer cost effective benefits to the region’s entrepreneurs.

Angel Capital During NWPA KIZ’s second funding cycle, NWPA KIZ plans to collaborate with the Pennsylvania Angel Network and other Angel groups with the goal of increasing opportunities for Angel investors to support NWPA KIZ companies and initiatives. NWPA KIZ companies will be informed of the opportunities provided by Angel organizations, and advised on developing proposals for Angel funding. Angel investors will be invited to participate at the Board level.

Sustainability A plan for long-term financial sustainability of the NWPA KIZ program is in development, and includes identification of additional partners who will bring resources and capital to sustain the program and support strategic initiatives. New partners are being sought from within the medical community, successful regional companies, private sector professionals, angel and venture investors, additional higher education institutions, successful IHE Alumni and Trustees, banks, and relevant associations. The NWPA KIZ has established an excellent track record of success through the first round of KIZ funding, demonstrating the value of the KIZ to potential partners and enabling NWPA KIZ to solicit funding to sustain its programs.The KIZ Board is also considering a “Pay to Play” model for participating partners.

Staff Review:

The NWPA KIZ has provided valuable assistance to the designated companies and entrepreneurs in the northwest region through the benefits of the KIZ Program. The research assistance, internships and micro grants are providing those companies the support they require to assure their success. Even though the economy is impacting company growth, the NWPA KIZ has seen six new start ups in the region and believes that through their assistance these companies will continue to prosper and grow. The NWPA KIZ has set their goals for the second round of funding in this economic climate to what they believe will be attainable numbers for the region.

Staff Recommendation:

BFTDA Board Meeting 5 October 22, 2009 Staff recommends that the BFTDA approve round two funding in the amount of $187,500 for the Northwest Pennsylvania Keystone Innovation Zone.

The KIZ Coordinator will continue to: 1) report the progress of the Zone as requested by DCED’s Technology Investment Office and 2) participate and support the networking and conference activity that DCED sponsors for all BFTDA-certified Keystone Innovation Zones.

BFTDA Board Meeting 6 October 22, 2009