Early Stage Fund Business Plan by djt14765

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Early Stage Fund

Pittsburgh Life Sciences Greenhouse
Early Stage Fund (ESF)Applications are accepted on a rolling basis, unless otherwise specified by the PLSG.It is
strongly advised that potential applicants contact the PLSG to discuss eligibility and other guidelines prior to submitting a
proposal.Please see the “Announcement” section below for important information regarding the
PLSG’s application, evaluation, and award processes. Purpose of the Early Stage FundOne of the key strategies
of the PLSG is to nurture and accelerate the formation and development of entrepreneurial life science ventures as a
means of building a stronger industry base in western Pennsylvania. The Early Stage Fund (ESF) is a competitive
funding program designed to further the PLSG's mission of creating local economic benefit. The PLSG seeks to provide
pre-seed capital to very early stage companies that will develop the technology and business necessary to become
better candidates for follow-on investments. A primary consideration for funding is the likelihood of creating regional
economic benefit. The Early Stage Fund, bridging the gap between discovery research and Seed funding, is expected to
act as one of the initial investments into the company.

Eligibility

Proposals must be submitted by an early stage company within the twenty county western Pennsylvania regions
(Allegheny, Armstrong, Beaver, Bedford, Butler, Cambria, Clarion, Crawford, Erie, Fayette, Forest, Greene, Indiana,
Lawrence, Mercer, Somerset, Venango, Warren, Washington and Westmoreland).

An early stage company is defined as a company that has raised less than $2.5 million in investments outside of federal
or state grants.The company must demonstrate availability of facilities and resources available to complete the proposed
milestones.

Use of funds

Typical investments range from $50K - $250K in total costs of PLSG monies and, consistent with the PLSG’s
mission and its policies and procedures, left at the discretion of the Executive-in-Residence (EIR). Investments require a
1:1 match, which may be cash or in-kind (personnel time, equipment use, materials, software or reduced
overhead).Costs incurred for this project are allowed to be back-charged for up to 30 days from the day of execution of
the investment agreement.Funding for personnel and consulting costs must be expended within western Pennsylvania.
Exemptions may be granted upon request to the PLSG and in the PLSG judgment with justification and evidence of best
attempt to hire a regional professional.

PLSG monies may not be used to retire accrued debt. Once a proposal has been approved for investment, the scope of
work and any other material component of the proposal may not be changed without written approval from the PLSG.
Any such changes desired by a company must be requested in writing to the PLSG prior to being undertaken and will be
considered consistent with the due diligence and other evaluation principles and standards governing the PLSG’s
review of initial proposals/applications. Terms

Prior to the release of funds, the PLSG will execute appropriate agreements with the company. Such agreements will
reflect whether the subject proposal is an initial or an amended proposal and will specify, among other requirements, use
of funds, reporting requirements and quantitative milestones. The final duration and level of funding for individual projects
will be determined by the PLSG.

The investment will be made in a form determined by the PLSG, including but not necessarily limited to grant, loan,
equity investment and royalty/payback agreement. All agreements required by the PLSG need to be executed within
sixty (60) days of notice of investment, unless otherwise agreed to by the PLSG. Immediate and full payment as provided
for in the applicable agreements will be required if the company moves a substantial portion of its operations from the
twenty county western Pennsylvania region during a period of five years following the initiation of the project.

 Submitting a ProposalIndividuals interested in applying to the ESF program are encouraged to contact the Director,
Investment Programs prior to submitting a proposal. At this time, a meeting with appropriate senior PLSG Staff will be
scheduled to discuss the technology, project and review eligibility, guidelines and mission of the program. Moving
forward, each prospective applicant is assigned for case management to an EIR who serves as mentor and liaison. The
EIR will work closely with the company to ensure the project meets all eligibility criteria. Companies shall apply to the
Early Stage Fund by submitting: A completed cover sheetA business Plan, including the following sections at a minimum:
Executive Overview, Market Analysis, Marketing Plan, Competition, Intellectual Property, Financials Applications must be
submitted electronically. Note that the signed cover sheet must be sent as hard copy to the attention of the Director,
Investment Programs. Selection Process and Criteria

The PLSG intends to subject initial proposal applications and, as applicable, modification proposal applications to a multi-
stage review process, including

http://www.plsg.com                                PLSG : Pittsburgh Life Sciences Greenhouse       Generated: 30 January, 2011, 01:38
                                                  PLSG :: Pittsburgh Life Sciences Greenhouse ::




1) internal and external review of the business plan, budget and project milestones and

2) the recommendations of the PLSG's Investment Advisory Committee.

Screening and mentoring by Executives-in-Residence (EIR):Each prospective applicant is assigned to an EIR who
serves as mentor. The EIR and Director, Investment Programs work closely with the company management to ensure
that the proposal meets all eligibility criteria and mission of the program. At this stage, the application is considered a
‘draft application’. The team working with the company will look at criteria such as but not limited to: Market
opportunity and needs;Product/Service description;Competitive advantage, value proposition;Competitive threats;Market
strategy; Sales and distribution; andIntellectual Property protection

Once the EIR validates that all criteria have been met, the application will be accepted as a ‘formal
application.’Review by external sources:


External consultants will review the application for commercial potential, benefits and risks of the technology, stage of
development, job creation potential, as well as the criteria listed above.If the application receives favorable review and
meets all eligibility criteria, the applicant company will be invited to make a presentation on the project to the PLSG
Investment Advisory Committee. The Investment Advisory Committee is comprised of PLSG Executive management and
members of the PLSG Executive Program. A vote of a majority of the Committee is required to make a funding
recommendation to the PLSG Executive Management, which then makes a determination regarding final investment
approval.

Additional due diligence: A project recommended for funding may undergo additional due diligence assessment prior to
the Investment Advisory Committee making a final funding recommendation. Information gathered during the due
diligence process may be shared with other investment organizations such as, but not limited to, Idea Foundry,
Innovation Works, UPMC Health Ventures, PA Early Stage and New Spring.

The PLSG will notify all applicants of its decisions regarding proposal applications. The PLSG reserves the right to select
for investment, all, some or none of the proposals received. The PLSG also reserves the right to select portions of
individual proposals for investment. Project Investment and ManagementThe PLSG will monitor progress of each project,
schedule periodic reviews and facilitate interaction among project participants and PLSG as appropriate. Recipients of
the investment will be required to submit reports in a format specified by the PLSG and following the approved
milestones. Funds will be distributed in according to approved milestones. The final report may also include a
presentation to the PLSG. The recipient of the investment will also agree to respond to a periodic survey by the PLSG
and disclose follow-on funding and commercialization activity that results from the PLSG-funded project. In connection
with the submission, evaluation, selection and/or management of ESF project applications, the PLSG may consider
support for preliminary, succeeding, and additional projects. Such consideration will be undertaken in a manner generally
consistent with the foregoing information, tailored as necessary and appropriate to specific circumstances.

 AnnouncementThe following information regarding applying for and receiving an Early Stage Fund investment is
intended to provide guidelines for potential applicants to the program. It is not necessarily exhaustive and does not
create any contract or any enforceable rights on the part of any applicant. The Pittsburgh Life Sciences Greenhouse
(PLSG) retains the right to revise or otherwise change this information and to invest or to not invest funds based on these
or other considerations consistent with the reasonable and lawful exercise of its judgment. All investments are subject to
the terms of the investment documentation, acceptable to the PLSG and consistent with any and all applicable statutes,
regulations and institutional policies. Applications are solicited from early stage companies. The company should exhibit
the clear potential to significantly and positively impact the regional economy.

Contact information

All questions and correspondence concerning this funding program and solicitation should be directed to the following
point of contact:

Uwe Winzen, Ph.D.
Programs Manager, Pittsburgh Life Sciences Greenhouse
100 Technology Drive, Suite 400
Pittsburgh, PA 15219
Phone: 412-770-1647
Fax: 412-770-1276
Email: uwinzen@plsg.com




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