Document Laramie_doc_89c5e1a558

U.S. Department of the Treasury State Small Business Credit Initiative (SSBCI) APPLICATION Applicants must complete and submit this application form, relevant attachments, and the signature form on or before 5:00 pm ET June 27, 2011, to Treasury. The completed application and relevant attachments must be saved and emailed to [EMAIL REDACTED]. Applicants should use the attachments provided to facilitate submission of supplemental information as required by certain sections below. For questions pertaining to any program terms used in this application form or appropriate methods by which to validate responses to the questions below, please consult the Application Instructions and the SSBCI Policy Guidelines. Central Contractor Registration (CCR) is required for all applicants. To register, go to www.ccr.gov/startregistration.asp. For the purposes of this application, the term “Applicant” shall include all States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of Northern Mariana Islands, Guam, American Samoa, and the United States Virgin Islands, and under the circumstances described in title III, section 3004(d) of the Small Business Jobs Act of 2010 (P.L. 111‐240) (the “Act”), a municipality of a State of the United States to which the Act has given a special permission under section 3004(d) of the Act. Section 1: Applicant Information 1A. Enter the name of the Applicant: City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, or political subdivision of the Applicant that has been designated to implement the program(s) described in this application. Attach letter of designation from the governor of the State, or the chief executive of the territory or municipality. This letter must expressly state that the governor or chief executive has designated the department, agency or political subdivision named below to accept the SSBCI allocated funds on behalf of the State, territory or municipality; the entity designated below will implement the State program(s) and oversee the State program(s), and the entity designated below has all legal authority to enter into an Allocation Agreement with the Treasury. Organization Name: City of Laramie, WY Check one of the following boxes as appropriate for the organization: State Department or Agency X Municipality Other Political Subdivision Organizational DUNS 783281892 Registration Active in CCR: X Yes No Employer/Taxpayer Identification Number (EIN/TIN): 83-6000072 Authorized Official’s Name: Janine Jordan Title: City Manager Street Address: Post Office Box C City: Laramie State: WY Zip Code: 82073 1C. Name and contact information of person to be contacted on matters concerning this application. Name : Janine Jordan Title City Manager Email: [EMAIL REDACTED] Phone: [PHONE REDACTED] 1D. Contracting Entity. Complete this Section if the organization(s) or /entity(ies) administering one or more of the programs described in this application are different from Applicant listed in Section 1B. Space is provided below for applicants to enter information for up to four such organizations/entities. Use the attachment for Section 1D to submit the information below for any additional organization/entity. 1. Name of Contracting Entity: Wyoming Smart Capital Network, LLC Program Name: Credit Guarantee Program Seed Capital Network Program Indicate (by checking the appropriate box below) if such entity is: Agency or Department of another State For‐profit Entity Supervised by State Non‐profit Entity Supervised by State X State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 1 of 4 TD F 103.1.A (04/2011) ---PAGE BREAK--- Name of Authorized Official: Robert Heard Title: Managing Director Street Address: 4218 Cheyenne Drive City: Laramie State: WY Zip Code: 82072 Enter contact person information below: Name: Robert Heard Title: Managing Director Email : [EMAIL REDACTED] Phone: [PHONE REDACTED] 2. Name of Contracting Entity: Development Capital Networks LLC Program Name: Credit Guarantee Program Seed Capital Network Program Indicate (by checking the appropriate box below) if such entity is: Agency or Department of another State For‐profit Entity Supervised by State Non‐profit Entity Supervised by State X Name of Authorized Official: Paul Huleatt Title: Managing Director Street Address 10565 N 114th Street, Ste 110 City: Scottsdale State AZ Zip Code: 85259 Enter contact person information below: Name: Paul Huleatt Title: Managing Director Email [EMAIL REDACTED] Phone: [PHONE REDACTED] 1E. Have all legal actions been taken pursuant to applicable State laws that are necessary to enable the designee to implement the Applicant program(s) described herein? Check the appropriate box. No – Do not continue with this application X Yes – Please attach a narrative describing the necessary legal actions that have been or need to be taken. The narrative should confirm that the entity is legally capable to bind the State, territory or municipality to obligations with the Federal Government; and the legal mechanisms are in place for the State, territory, or municipality to accept the transfer of SSBCI funds and deliver funds to the entity designated in Section 1B. Please refer to attorney opinion letter from the City of Laramie and the attached letters of designation from Joint Applicants. Section 2 Amount Requested 2A. Enter the total amount of SSBCI funds requested. Do not exceed the amount allocated by Treasury under Act to the State, territory or municipality. Amount: $13,168,350 2B. Will all or part of the requested amount be used as collateral for a qualifying loan or swap funding facility? Yes, all of the requested amount Yes, part of the requested amount X No If yes, provide the following information: Amount of funding: Names(s) of private financial entity(s): Attach commitment letter from source of financing. If commitment letter is unavailable, use the attachment for Section 2B to describe the items and structure of the transaction. The description should not exceed 1 page. 2C. If applying for more than one program enter the information below for each program (use the attachment for Section 2C if more space is needed for additional programs): 1. Name of Program Credit Guarantee Program CAP X OCSP Amount Requested: $10,168,350 2. Name of Program Seed Capital Network Program CAP X OCSP Amount Requested: $ 3,000,000 3. Name of Program CAP OCSP Amount Requested: 4. Name of Program CAP OCSP Amount Requested: 5. Name of Program CAP OCSP Amount Requested: 2D. For both CAPs and OCSPs, use attachment for Section 2D to indicate how the Applicant plans to use SSBCI funds to provide access to capital for small businesses in low‐ and moderate‐income communities, in minority communities, in other underserved communities, and to women‐ and minority‐owned small businesses. The Applicant’s plans must include a narrative on how the Applicant will monitor the performance of its plans to provide access to capital to small businesses meeting these criteria. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 2 of 4 TD F 103.1.A (04/2011) ---PAGE BREAK--- Section 3. Capital Access Program (CAP) Complete this Section if applying for SSBCI funds to use for a CAP 3A. Confirm by checking the boxes below that the Applicant’s CAP satisfies each of the 4 criteria. Applicants should use the attachment for Section 3A to describe the CAP and explain how the CAP meets each criterion. Documentation should not exceed 5 pages. Provides portfolio insurance for business loans based on a separate loan‐loss reserve fund for each financial institution. Requires insurance premiums to be paid by participating financial institution lenders and by the business borrowers to the CAP‐created reserve fund to have their loans enrolled in such reserve fund. Provides for contributions to be made by the State to the CAP‐created reserve fund in amounts at least equal to the sum of the amount of the insurance premium charges paid by the borrower and the financial institution to the reserve fund for any newly enrolled loan. Provides portfolio insurance solely for loans that meet both the following requirements: The borrower has 500 employees (as defined at 13 C.F.R. Part 121.106) or less at the time that the loan is enrolled in the CAP and the loan amount does not exceed $5,000,000. 3B. Lender capital at‐risk criteria: For loans made under Applicant CAP programs where financial institution lenders bear less than 20% risk of loss, use the attachment for Section 3B to articulate exceptional circumstances as to why the financial institution lender is unable to bear a greater share of the risk. 3C. Is the Applicant’s CAP a new program or an existing program? Check the appropriate box. New, beginning with SSBCI Existing 3D. Enrolled loan data: Applicants establishing new programs will be required to provide detailed assumptions for their estimates of total enrolled loans, total loan amounts and the estimated total Federal contributions over the lifespan of the SSBCI. Applicants with existing programs should provide historical data for total enrolled loans, total loan amounts, and total public subsidies for these loans, and use this historical data to estimate total enrolled loans, total loan amounts, and the estimated total Federal contributions over the lifespan of SSBCI. Applicants should use the attachment for Section 3D to provide these estimates. Section 4: Other Credit Support Programs (OCSP). Complete this Section if applying for SSBCI funds to use for a State Other Credit Support Program 4A. Check all types of OCSPs for which the application applies and use the attachment for Section 4A to provide a narrative statement describing each program. Statement should include background of the program; summary of program guidelines; historical performance of the program (for existing programs); and expected performance of the program. Narrative statement must not exceed 3 pages for each OCSP. Loan participation program (may be structured in the form of a loan purchase or companion loan transaction). X Applicant‐run venture capital fund program. X Credit guarantee program. Other types of credit support programs that use public resources to promote private access to credit, are not a CAP, and meet the eligibility criteria for OCSPs. 4B. Confirm by checking each box below (box 3 should only be checked if it is applicable) that each program checked in Section 4A, above, satisfies the following criteria: X At a minimum, $1 of public investment by the State OCSP will cause and result in $1 of new private credit. X The Applicant has a reasonable expectation that, when considered with all other Applicant programs, such Applicant programs together have the ability to use amounts of new Federal contributions to, or for the account of, all such programs to cause new small business lending at least 10 times the SSBCI contributed Federal amount. X If the Applicant OCSP provides credit support through a financial institution lender or through a non‐financial institution lender or investor, the financial institution lender (or, if applicable, the non‐financial institution lender or investor) has a meaningful amount of its own capital resources at risk in the loan or investment to the eligible small business. The term “meaningful capital” may vary for different programs. Guidelines for CAPs and OCSPs are contained in the SSBCI Policy Guidelines. For instances where financial institution lender(s) bear less that 20% risk of loss, Applicants should use the attachment for Section 4B to articulate exceptional circumstances as to why the financial institution lender is unable to bear a greater share of the risk. X The OCSP provides credit support that meets all the following requirements: targets an average borrower size of 500 employees or less*; does not extend support to borrowers that have more than 750 employees; targets support towards loans with an average principal amount of $5,000,000 or less; and does not extend credit support to loans that exceed a principal amount of $20,000,000. *The definition at 13 C.F.R. Part 121.106 should be used to calculate the number of employees. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 3 of 4 TD F 103.1.A (04/2011) ---PAGE BREAK--- 4C. Leverage calculations: Provide an attachment showing the calculation and the assumptions for the first two boxes above. If the Applicant expects to achieve the 10:1 private leveraging target through subsequent private financing to the small businesses over time, the attachment should show the expected private leverage year‐by‐year and cumulatively through December 31, 2016, the last date through which Applicants are expected to report program performance. Please refer to the SSBCI Program Guidelines for examples. 4D. Is the OCSP a new program or an existing program? Check the appropriate box. X New, beginning with SSBCI Existing 4E. Provide documentation (use the attachment for Section 4E) describing the anticipated benefits from each OCSP to the State, its businesses, its residents, and describe the extent to which resulting small business lending will expand economic opportunities. For Loan Guarantee Programs, States must provide detailed assumptions concerning estimated number of loans and estimated loan amounts during the course of the SSBCI. States that are enacting new Collateral Support Programs should present detailed assumptions concerning estimated loan volume and overall Federal collateral support used for such loans. Documentation should not exceed 5 pages. The metrics used should include, but need not be limited to: • Jobs created • The number and value of new OCSP small business loans • Increase in sales, income or other tax revenues paid by businesses or employees 4F.Provide documentation (use the attachment for Section 4F) for each OCSP describing operational capacity, skills, and experience of the management team of the State OCSP. Documentation should not exceed 5 pages. The metrics used should include, but need not be limited to: • Qualifications and financial industry experience of senior management • Experience of senior management in operating CAPs or OCSPs • Adoption of industry best practices use of risk management strategies employed by analogous successful programs) 4G. Provide documentation (Applicants should use the attachment for Section 4G) for each OCSP describing the capacity of OCSP staff to manage increases in the volume of its small business lending. Documentation should not exceed 2 pages. Evidence cited should include, but need not be limited to: • Financial strength • Operational capacity 4H. Provide documentation (Applicants should use the attachment for Section 4H) for each OCSP describing the internal accounting and administrative controls systems used by the OCSP staff and the means they use to safeguard against waste, loss, unauthorized use, and misappropriation. This description should not exceed 3 pages. If available, evidence cited should include, but need not be limited to: • Periodic internal audits • Annual independent audits (including management letters) • Program financial statements current within the last 6 months. • Accounting and financial reporting system compliant with OMB Circular A‐127 In addition, if available, the Applicant must attach a copy of the most recent independent financial audit or program financial statements for each OCSP, dated within the last six months. If no independent financial audit or program financial statements exist for the OCSP, then the Applicant must attach a copy of the independent financial audit or program financial statements, dated within the last six months, for the entity implementing each OCSP as identified in the response to Section 1B or 1D of the application. Section 5: Compliance. 5A. Check any or all of the boxes below to indicate how the Applicant plans to staff oversight of compliance activities? Current Staff New Staff X Contract Staff 5B. Provide a narrative statement (Applicants should use the attachment for Section 5B) describing what reporting mechanisms, audits, or other activities the Applicant has in place or need to be implemented to enable the Applicant to conduct oversight and meet annual reporting requirements for the proposed programs. Documentation should not exceed 3 pages. Applicants must save the completed PDF application and attachments and email to [EMAIL REDACTED] Applicants must complete, sign, and email the signature page with the application and attachments. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 4 of 4 TD F 103.1.A (04/2011) ---PAGE BREAK--- Attachment ‐ Question 1.A – Joint Applicants The Wyoming municipalities of: Casper Honorable Paul C. Bertoglio, Mayor 200 North David, Casper, Wyoming 82601 307‐235‐8224 Cody Honorable Nancy Tia Brown, Mayor 1338 Rumsey Avenue, POB 2200, Cody, Wyoming 82414 307‐527‐7511 Douglas Honorable Bruce A. Jones, Mayor 101 North 4th Street, POB 1030, Douglas, Wyoming 82633 307‐358‐3462 Edgerton Honorable H.H. “Buck” King, Junion, Mayor 311 North 2nd Street, POB 407, Edgerton, Wyoming 82635‐0407 307‐437‐6763 Gillette Honorable Tom Murphy, Mayor 201 East 5th Street, POB 3003, Gillette, Wyoming 82717 307‐686‐5203 Green River Honorable Hank Castillon, Mayor 50 East 2nd North Street, Green River, Wyoming 82935 307‐872‐6136 Hanna Honorable Tony Poulos, Mayor 301 South Adams, POB 99, Hanna, Wyoming 82327 307‐325‐9424 Hartville Honorable Darrell L. Offe, Mayor 200 West Gambell Street, Hartville, Wyoming 82215 307‐836‐2288 Laramie Janine Jordan, City Manager 406 Ivinson Street, POB C, Laramie, Wyoming 82073 307‐721‐5226 Midwest SSBCI Attachment - Question 1.A 7-Oct-11 ---PAGE BREAK--- Honorable Guy Chapman, Mayor Post Office Box 190, Midwest, Wyoming 82643 307‐437‐6513 Pine Bluffs Caryn Miller, CEO Town Administrator 220 Main Street, POB 429, Pine Bluffs, Wyoming 82082 307‐245‐3746 Powell Honorable Scott Mangold, Mayor 270 North Clark Street, POB 1008, Powell, Wyoming 82435 307‐754‐5106 Rawlins Honorable Kenneth C. Klouda, Mayor 521 West Cedar Street, POB 953, Rawlins, Wyoming 82301 307‐328‐4500 Rock Springs Honorable Carl R. Demshar, Jr., Mayor 212 D Street, Rock Springs, Wyoming 82901 307‐352‐1510 Sundance Honorable Paul Brooks, Mayor 213 Main Street, POB 542, Sundance, Wyoming 82729‐0542 307‐283‐3451 Wheatland Honorable Jean Dixon, Mayor 600 South 9th Street, Wheatland, Wyoming 82201 307‐322‐2962 Cheyenne Honorable Richard L. Kaysen 2101 Oneil Avenue, Cheyenne, Wyoming 82001 (307) 637‐6300 SSBCI Attachment - Question 1.A 7-Oct-11 ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 2D ‐ Access to Capital for Small Businesses Section 1: Applicant Information 1A. Enter the name of the Applicant: City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, or political subdivision of the Applicant that has been designated to implement the program(s) described in this application. Organization Name: City of Laramie, WY Section 2: Amount Requested 2D. For both CAPs and OCSPs, use the space provided below to indicate how the Applicant plans to use SSBCI funds to provide access to capital for small businesses in low‐ and moderate‐income communities, in minority communities, in other underserved communities, and to women‐ and minority‐owned small businesses. The Applicant’s plans must include a narrative on how the Applicant will monitor the performance of its plans to provide access to capital to small businesses meeting these criteria. The Wyoming Smart Capital Network (WSCN) is focused on small businesses with capital needs of less than $1 million. The CGP anticipates average loans of approximately $500,000. The strategy will incorporate outreach to minority and women owned businesses, and urban and economically impacted communities, with a goal of creating jobs within those communities. A variety of methods and strategies will be utilized to increase capital in underserved communities. 1. WSCN is staffed with business development, credit underwriting, marketing, and web portal professionals committed to administering and promoting the WSCN to underserved communities as an integral part of the business development outreach. 2. WSCN will establish a network of participating banks, Small Business Development Centers, Community Development banks, SCORE centers and nonprofits serving minority and underserved communities. 3. WSCN will provide periodic outreach and training programs to participating and prospective lenders and groups of lenders. Additionally, staff will organize webinars and produce and distribute marketing materials to be distributed through training events, conferences, and partner newsletters and mailings. 4. WSCN staff will seek to leverage CGP participating banks’ resources to provide outreach and periodic training to participating bank personnel. 5. WSCN will develop partnerships with economic development and community organizations to make small businesses aware of the CGP and SCN programs. Partnering organizations are expected to include chambers of commerce, industry trade associations, Community Development Financial Institutions, and groups supporting minority and women owned businesses. 6. WSCN will advertise in enewsletters such as the LipperCurrent, a weekly enewsletter distributed to investors, corporations, universities, and economic development organizations. 7. WSCN will host quarterly training and outreach events throughout the state in partnership with NIST MEP centers, participating banks, and regional economic development organizations. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 1 of 2 TD F 103.1.F (04/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 2D ‐ Access to Capital for Small Businesses 8. WSCN will market to and enroll qualifying loans from CDFI lenders, provided the CDFA offers commercial loans that qualify for the SSBCI program. There are two possible CDFI’s WSCN can partner with to support small business loans. The WWBC, described above, is preparing an application to become a CDFI. If approved, the WSCN would seek to enroll loans from the WWBC. Additionally, Elk Basin Federal Credit Union is a CDFI based in Powell, WY. This CDFI is currently in the midst of a merger with River‐Rail Federal Credit Union (Casper). The WSCN will support underserved communities. There are many definitions to describe underserved communities or segments of a region. For example, several of our communities in Wyoming characterize the underserved areas of their communities (or their community as a whole) as being rural, low income, “prison population” (to describe the community of residents with ties to those imprisoned), Native American, minority, or women entrepreneurs. However, the most common characteristic among the 16 participating municipalities is the rural nature of their communities. According to Mary Randolf, executive director of the Wyoming Rural Development Council, at least 13 of the 16 consortium municipalities meet the USDA definition of rural communities. The Fund will work closely with the economic development organizations of the member cities and the participating banks to market to rural businesses. The Fund will also collaborate with the Wyoming Business Council, Wyoming Economic Development Association, and State Small Business Development Centers. A particular focus of the Laramie Consortium is the income disparity between men and women – with Wyoming reporting the largest gender gap in the nation. This issue spans all 16 of the municipalities in the Wyoming Consortium, making women the single largest underserved population. One strategy that the state and local economic developers have employed is the support of female entrepreneurs through education and access to capital. The SSBCI program will provide increased access to capital to women. Wyoming Smart Capital Network has established a relationship with the Wyoming Women’s Business Center (WWBC), the state’s leading outreach program to women, minorities and individuals with low income. WSCN staff will monitor the performance of plans to provide access to capital to small businesses located in low and moderate income communities and to women‐owned and minority‐owned businesses. Data will be captured on all companies participating in the CGP and SCN programs, obtaining registration information on all attendees of outreach events, by recording the number of recipients of enewsletter campaigns, by collecting web statistics of enewsletter ads where available, and by periodically surveying CGP and SCN participants and prospective participants. The information gathered from small companies participating in the CGP and SCN include: 1. Business name, Contact name, Business address, phone, email, NAICS code, TIN; 2. Demographic information such as county and town 3. Stage of business, 4. # of Full‐Time Equivalent (FTE) employees, 5. average wage, 6. benefits offered, 7. estimate of the number of jobs expected in 1‐2 years; 8. Loan information including the loan number, loan amount, interest rate, and term, 9. Purpose of the loan, and collateral description. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 2 of 2 TD F 103.1.F (04/2011) ---PAGE BREAK--- Performance Historical* Expected Borrowers Total Number 71 61 Average Size 531,000 1,790,947 TRANSACTIONS Number 88 61 Average Size 429,000 1,790,947 Total Amount 37,800,000 109,247,801 LOSSES Total Amount 302,000 598,731 Cumulative % 4:50 4.50 LEVERAGE RATIO 5:1 w/o recycling 11.3:1 w/recycling * This is a new program. It is modeled after the state sponsored credit guarantee program implemented by the program manager. See 4H for details. State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4A – Narrative Statement for Each OCSP Section 1: Applicant Information 1A. Enter the name of the Applicant: City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, authority, political subdivision of the Applicant, or other organization that has been designated to implement the program(s) described in this application. Organization N City of Laramie, WY Section 4: Other Credit Support Programs (OCSP). Complete this Section if applying for SSBCI funds to use for a State Other Credit Support Program 4A. Applicants should use the space provided below to provide a narrative statement describing each OCSP. Statement should include background of the program; summary of program guidelines; historical performance of the program (for existing programs); and expected performance of the program. Name of Program: Credit Guarantee Program (“CGP”) 1) Background. The Cities will contract with WSCN to implement this program. The Credit Guarantee Program will extend collateralized guarantees to lenders to support loans to qualifying small businesses on a loan by loan basis. Each guarantee will be secured by a Certificate of Deposit (CD) pledged by the WSCN as additional collateral for a loan. WSCN will post cash collateral for each loan made by a participating Lender. A guarantee may be called by a lender if the loan goes into liquidation. A lender must first liquidate the primary collateral pledged by the borrower and exhaust its collection efforts against the borrower. If a shortfall remains, the CD may be liquidated and claimed by the lender up to the extent of the shortfall. The balance, if any, will be released by the lender and redeemed by the WSCN. 2) Guidelines. The WSCN will partner with many lenders. Commercial banks are expected to be the primary participants. The WSCN will exercise due care to determine that banks and non‐bank financial institutions participating in the Program possess sufficient commercial lending experience, financial and managerial capacity and operational skills to meet the objectives as set forth in the SSBCI Act. The WSCN will apply the same standards for participation in the Program to all classes of lenders. As required by the Act, the WSCN shall consult with the appropriate federal banking agency or, as appropriate, the Community Development Financial Institution Fund. The Program will target an average borrower‐size of 500 employees (as defined in 13 CFR 121.106) or less and will not extend credit support to borrowers with more than 750 employees. The Program will target loans with an average principal amount of $5 million or less. 3) History. The Program is patterned after a credit guarantee program implemented by members of the team described in Section 4E. 4) Expected Performance. The WSCN intends to recycle approximately 37% of SSBCI funds one time during the five year program life, and then continuing thereafter. Guarantees are expected to range from 10% to 50% of the loan amounts (50% is the maximum), averaging 18%, and range in size from $5,000 to $1 million. On average, the loans supported by WSCN are expected to match additional private loans at closing or subsequently (without the pledge of WSCN collateral) at the ratio of 1.0 to 0.68. The rate of loan failure is expected to be 3% to and the rate of loss of CDs pledged is expected to be about 4.5%. By pledging funds matched by additional private loans, and by recycling a portion of the SSBCI funds, the program is expected to produce better than 10 to 1 leverage. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 1 of 3 TD F 103.1.J (04/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4A – Narrative Statement for Each OCSP Based on our past experience with similar programs, including a variety of federal and state government loan programs, together with input from other SSBCI program managers in Idaho, Michigan, and North Carolina, we have found that more than one layer of financing is common to serve the needs of business (e.g. a working capital loan is matched with an equipment loan and a real estate loan). We believe in the initial round of financings it is reasonable to expect additional or subsequent financing equal to 68% or more of the SSBCI supported financing. 5) Reasonableness. The CGP is designed to accomplish full deployment within 36 months, intermediate leverage of greater than 10 to 1 by the end of 2016, and long term impact through multiple cycles. The Applicants occupy a substantial market area. The attached map shows the Primary, Secondary and Tertiary areas of commerce and employment served by the Applicant Cities. The 2010 population of these areas total 392,016, or 69% of the total 563,626 population of the state. In 2009, Wyoming financial institutions made 14,094 business loans under $1 million totaling $406 million1. In the service areas of the Applicant Cities, using population as a gross indicator of loan volume, the market for business loans of up to $1 million was about $282 million in 2009. These were, clearly, all bankable loans. The purpose of the CGP is to help lenders expand the universe of doable deals. In our experience, for every loan a lender makes, there is another loan he would like to make but for a stronger balance sheet. Said another way, the market for doable loans that could benefit from collateral support is likely at least $282 million per year for loans up to $1 million, and higher still when including loans above $1 million. CGP helps fill this need. CGP expects to support loans of $17 million in 2012 and $17.5 million in 2013, matched by other loans in those years of $11.6 million and $11.9 million. Given the strong relationships with Wyoming lenders and WSCN’s plan of action, the goal is readily attainable. Not stated here, and only for lack of data, is the market for loans of up to $5 million. The CGP will consider loans of up to this size. The following map shows commerce and employment regions of the Applicant Cities (the Primary Areas), a 50 mile radius from the Cities (the Secondary Areas), and the counties of the Primary Areas (the Tertiary Area). The Tertiary Areas and the population of these include the counties of: COUNTY POPULATION Park, 28,205 Big Horn, 11,668 Campbell, 46,133 Crook, 7,083 Natrona, 75,450 Converse, 13,833 Carbon, 15,885 Albany, 36,299 Platte, 8,667 Goshen, 13,249 Laramie, 91,738 Sweetwater. 43,806 TOTAL 69% 392,016 All Wyoming 563,626 State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 2 of 3 TD F 103.1.J (04/2011) 1 County Business Patterns; U.S. Small Business Administration, Office of Advocacy fro, Community Reinvestment Act. http://www.sba.gov/content/banking‐study‐2010 ---PAGE BREAK--- Testing the Market WSCN has participated in three informal marketing focus group meetings that included lenders and economic developers in the communities of Laramie, Rawlins and Casper. DCN described the collateral support available through the CGP and invited input from the participants. WSCN hosted a booth at the Wyoming Economic Development Association annual meeting last September and interacted with regional economic developers and lenders. WSCN has conducted marketing phone calls to lenders and economic developers in Rawlins, Cody, Powell, Laramie and Casper. WSCN has contacted the Wyoming Bankers Association for feedback about the lending climate in Wyoming and lender attitudes toward collateral enhancement programs in general. More recently, WSCN has taken advantage of Treasury's conference in San Francisco to learn from and network with successful Collateral Enhancement programs in other states. We have received materials and support from Idaho and Michigan and will continue to seek their guidance and input. Partial list of Lenders contacted: Wyoming State Bank, Laramie 1st National Bank, Powell Wyoming Industrial Development Corp, Casper Rawlins Bank of Commerce Rawlins National Bank Results of Research: Lenders want the collateral support program to be SIMPLE to apply for and simple to collect the collateral if necessary. Lenders like the idea of having the CDs in their banks. Lenders prefer 50% collateral support to other figures we offered, such as 20% and 25%. Lenders believe that the best loans will be made without help, but they believe they have good loans that our collateral support program will make possible. Lenders want our turn around to be fast. Lenders want to know what fees are associated and how they can pass them along to borrowers. Overall, lenders respond positively to the concept of the program, adding that there is strong demand for working capital loans where collateral support would help to get the deal approved. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 2b of 3 TD F 103.1.J (04/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4A Narrative Statement for Each OCSP The CGP is attractive to banks. Members of the WSCN team managers designed, implemented and managed a similar program from 1997 to 2008. The original program was in Oklahoma while the new program is in cities in Wyoming. The original program was focused on financing short term working capital needs and fixed assets until the final three years of the program when by statute the program was limited to fixed asset loans with a minimum 5‐year term. Working capital support was always in high demand. The CGP program will focus on financing working capital needs with terms of generally less than two years. Wyoming banks have indicated this is the primary need. The original program had many technical constraints that limited eligibility. The SSBCI funds come with many fewer constraints and therefore a broader potential market. The closing mechanism for the original program was complicated, while the closing process for the new program is relatively simple. Therefore, the appetite of banks for the program is expected to be higher than that for the Oklahoma template. In our experience, a basic requirement for deploying development capital is to have a program that is a) useful and easy to use by participating lenders, b) worthy of trust such that a lender can rely on the support and c) material to the transaction such that a lender finds it to participate. The template program has demonstrated these requirements, and the WSCN’s Credit Guarantee Program is superior in many respects. The guarantee percentage can be as high as 50% in the WSCN program, compared to 18% in the template model, making the program particularly valuable. The cash collateral will be deposited at the lending bank, making it trustworthy. The lender will be able to use its standard loan documents, making it easy to use. For these reasons, the appetite of banks for the program is expected to be significantly higher than that for the Oklahoma template. A second basic requirement for achieving the desired volume and quality of transactions is having a vigorous system for marketing the program and selling the tool, the discipline to follow the process, and a management team capable of implementing the plan. The WSCN has a robust system designed to accomplish its goals. • Starting with our staff – As the former state director of the Wyoming Small Business Development Center, Diane Wolverton personally knows lenders and economic developers across the state. She has worked with the network of advisors to small companies and has the unique capacity to connect with those who are helping companies find capital. Paul Huleatt has a successful history of business development and commercial credit underwriting for Silicon Valley Bank, First Interstate Bank, Norwest Bank and other lenders. And Mark Huston and Robert Heard both have direct experience marketing guarantee and collateral support programs through a network of banks. WSCN is establishing a network of participating banks. Banks will serve as the primary source of deal flow for the CGP. Personal contact is key to leveraging this resource. The WSCN team will contact each member of our network banks at least once a month to identify deals and discuss structures. The targeted banks are listed below. • WSCN will provide periodic outreach and training programs to participating and prospective lenders and groups of lenders. • WSCN will organize webinars and produce and distribute marketing materials to be distributed through training events, conferences, and partner newsletters and mailings. • WSCN will reach out to individual companies who may serve as borrowers for the program. For example, among the estimated 18,000 businesses in the state, WSCN has identified over 350 manufacturers with up to 500 employees. Our team will target the companies that meet SSBCI guidelines and systematically reach out to these. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 3 of 3 TD F 103.1.J (04/2011) ---PAGE BREAK--- • WSCN will establish a network of regional attorneys, accountants, and intermediaries who are focused on supporting Wyoming small businesses. We will include these professionals in our outreach of the CGP training events to encourage networking and deal flow among these professionals. • WSCN will establish a network of Small Business Development Centers, Regional Economic Development Organizations, Community Development banks, SCORE centers and nonprofits serving minority and underserved communities to identify deal flow for the program. For example, WSCN will sponsor the Telesummit on Finance for Women Entrepreneurs, April 2012 in conjunction with the Wyoming SBDC, Wyoming Business Council and the Wyoming Women's Business Center. • The cooperating municipal partners are eager to serve as a conduit for dissemination of marketing materials through City newsletters, websites, and other venues. 7) Underwriting. A) Applicant borrowers will be required to complete an application, generally in the form of the attached draft Application for Loan Guarantee. B) WSCN reviews loans for eligibility pursuant to SSBCI statute, rules and guidelines, following the checklist of eligibility criteria in the Application for Loan Guarantee. Each borrower will be required to provide an assurance that it complies with eligibility criteria. C) WSCN reviews loans for credit worthiness. This generally includes a review of historical financial statements of the borrowing business, the personal financial statement of the principal, financial projections of the business, and documents that support the value of assets. A participating bank will execute a Credit Guarantee Program Agreement generally in the form of the attached draft. WSCN will pledge and assign CDs for approved loans using a form generally as illustrated in the attached sample. Our goal is to deploy funds as quickly as possible. If the market provides greater opportunity in one of our two programs, we may seek permission from Treasury to shift funds to the program showing the greatest demand. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 3 (Cont) of 3 TD F 103.1.J (04/2011) ---PAGE BREAK--- BANKS TARGETED BY WSCN American Nat Bank, Cheyenne Ann Nelson Regional President Bank of Buffalo, Buffalo Paul Brunkhost President Bank of Commerce, Rawlins Copper France President Bank of Jackson Hole, Jackson Jeff Fuechsel President Bank of Lovell, Lovell Bart Langemeier President Big Horn Federal, Greybull John Coyne, III Chairman/CEO Central Bank & Trust, Lander Carl Huhnke President Cheyenne State Bank, Cheyenne David Cook President Commerce Bank of Wyo, RS Mike Yedinak SVP/COO Converse County Bank, Douglas Tom Saunders President Cowboy State Bank, Ranchester Sam Summers President/CEO Farmers State Bank, Pine Bluffs John Gross President FirsTier Bank, Cheyenne Marty Knaub Branch President 1st Fed Savings Bank, Sheridan David Ferries President First Interstate Bank, Sheridan Bill Huppert Regional President First National Bank, Buffalo Scott McBride Chairman First National Bank, Gillette Sam Saunders President/CEO 1st Bank, Evanston Doug Nisson President/CEO First Bank of Wyoming, Powell Richard Nelson President/CEO 1st National Bank of WY, Laramie Dan Furphy Chairman First State Bank, Wheatland Mike Daly Chairman First State Bank of Newcastle Leonard Nack President/CEO Hilltop National Bank, Casper John Jorgensen President Jonah Bank of Wyoming, Casper Mark Zaback President Lusk State Bank, Lusk Jay Hammond President/CEO Oregon Trail Bank, Guernsey Leonard Scoleri President/CEO Pinnacle Bank, Torrington Doug Weedin President/CEO Platte Valley Bank, Torrington Joe Guth President Points West Community Bank Ryan Schilreff President/CEO Rock Springs National Bank John Hay, III President Security First Bank, Cheyenne Ron Van Voast President/CEO Security State Bank, Basin Ron Boyd CEO State Bank, Green River Mark Borders President Summit National Bank, Hulett Clarence Elkin President Sundance State Bank, Sundance Jim Durfee President/CEO The Bank of Star Valley, Afton Rod Jensen President The Rawlins National Bank Richard Chenoweth President/CEO Tri-County Bank, Cheyenne Rick Flood President U.S. Bank Steve Lovas WY President Wells Fargo,Casper Tim Kugler Regional President WY Bank & Trust, Cheyenne Jeff Wallace CEO WY National Bank, Riverton Kent Shurtleff President/CEO Wyoming State Bank, Laramie Gary Crum President & CEO WY Industrial Development Corp. Diane Johnston President ---PAGE BREAK--- Expected FUNDS Total Number 6 Average Size $500,000 Expected Match $13,666,000 SCN Commitment $3,000,000 Total Amount $16,666,000 TRANSACTIONS Total Number 32 Average Size $500,000 Co‐Investment $500,000 Total Co‐Investment $16,666,000 TOTAL CAPITAL $33,333,000 LEVERAGE RATIO 11:1 Ratio of Match & Co‐ investment/SSBCI 10:1 State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4A – Narrative Statement for Each OCSP Section 1: Applicant Information 1A. Enter the name of the Applicant: City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, or political subdivision of the Applicant that has been designated to implement the program(s) described in this application. Organization Name: City of Laramie, WY Section 4: Other Credit Support Programs (OCSP). Complete this Section if applying for SSBCI funds to use for a State Other Credit Support Program 4A. Applicants should use the space provided below to provide a narrative statement describing each OCSP. Statement should include background of the program; summary of program guidelines; historical performance of the program (for existing programs); and expected performance of the program. Name of Program: Seed Capital Network Program(“SCN”) 1) Background. The Cities will contract with the WSCN to implement this program. The Seed Capital Network Program (the "SCN") will invest in angel funds to support investment in qualifying small businesses. An investment will be in the form of an interest purchased in a fund, such as a limited partner interest or an LLC member interest. The interest purchased by WSCN will generally range in size from $50,000 to $3 million (never more than $3 million) and represent 5% to 50% of fund capital (never more than 50%). A commitment to a fund may be pari passu, preferred or subordinate to other investors. The objective will be to exceed a 10 to 1 leverage factor over the remaining 5‐year reporting period of the program. Funds will typically have a life of ten or more years, with the active investment period spanning the first three years. 2) Guidelines. The WSCN will seek to build and support angel funds in Wyoming, following the selection criteria listed below. WSCN will favor angel funds that have $2 million or more in total commitments, without WSCN. The maximum size of the fund to which WSCN may commit is $20 million. The WSCN will exercise due care to determine that the participants in angel funds are accredited investors per SEC rules. Beyond capital, participants are expected to contribute their knowledge and experience of starting, building and growing new companies. The angel funds will tend to focus on projects that complement the knowledge base of the participants. WSCN will exercise a preference for funds that elect to participate in a network of similar funds across the state and demonstrate a willingness to practice sound disciplines. WSCN will offer to help administer angel funds, help sustain these investors as they analyze, value, price, structure, negotiate, make and monitor their projects, and help investors connect to national sources of technology, capital and business‐building talent. 3) History. The program is patterned after the experience of the WSCN team training angel investors in over 100 communities, facilitating angel networks in Iowa and Oklahoma, and investing in angel, seed and venture capital funds. See 4E. 4) Expected Performance. The WSCN expects to initially commit about $3 million to angel funds where other capital can be leveraged. An average commitment may be for 18% of the total capital of an angel fund. The $3 million is expected to partner with $13.3 million. In aggregate, these funds are expected to invest in about 30 high potential companies that attract at least an equal amount of $16.6 million from co‐investors and other participants in the transactions. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 1 of 3 TD F 103.1.J (04/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4A – Narrative Statement for Each OCSP 5) Reasonableness. The SCN is designed to accomplish rapid deployment, intermediate leverage of greater than 10 to 1 by the end of 2016, and long term impact through multiple cycles. The Applicants occupy a market area of reasonable size with sizeable population in every quadrant of the state. The WSCN team is connected to the University of Wyoming is in Laramie. Diane Wolverton led the state’s Small Business Development Center housed at the University. The team is connected to the technology and entrepreneurial development staff at the University and will work with this staff to connect to alumni throughout the state, particularly those engaged in business building. Members of the WSCN team have designed, implemented and managed angel, seed and venture capital programs in other rural states, including Oklahoma, Arkansas and Iowa. The oldest of these, the Oklahoma Capital Investment Board (OCIB), was launched in 1993 and made commitments through 2009. OCIB has invested approximately $60 million in 19 seed and venture capital funds. OCIB represented about 7% of total fund capital, such that every dollar invested in funds leveraged about $14 for investment in small companies. Within the state alone, OCIB funds have invested and attracted equity co‐investment of $131 million in Oklahoma companies along with an estimated $262 million of leveraged debt. In 2004 members of the team committed $100,000 through the Arkansas Institutional Fund to the Fund for Arkansas Future, an angel fund with over $6 million in subscribed capital. The portfolio has eleven Arkansas companies with average investment size of $340,000. On average each of these deals has attracted co‐invested from other private investors of $439,000. In Iowa, members of the WSCN team helped launch eight angel funds from 1998 to 2001, and since 2008 have served as facilitator of the Iowa Seed and Angel Network. The network collaborates on deals and works together to build the entrepreneurial environment in Iowa. For example, the members produce the annual Iowa Seed and Venture Capital Forum, http://investiowa.com/icic/web.nsf/pages/IE2011.html. In Wyoming, the opportunity for deploying equity capital lies with local individual investors. The WSCN will focus on the formation of new member‐managed angel funds and the facilitation of these funds as a statewide seed capital network. In this regard, groups of angels are emerging in Laramie, Rawlins, Cody, and Casper with local development organizations serving as champions. Taking the next step to form a fund will be natural for several of these. Other communities have voiced a desire to catalyze an angel fund. A variety of methods and strategies will be used to identify prospective angel investors and catalyze angel funds. • Jim Troxel of the WSCN team has provided training to private investors since 1997, delivering over 100 seminars on angel investing in communities across America. An estimated half of these seminars have catalyzed a new angel fund, group or network. This tool and others will be used to create interest and momentum toward angel fund formation. • WSCN will leverage the marketing efforts of the CGP to identify prospective angels. Specifically, in each CGP training or networking event the WSCN team will dedicate a portion of these events to highlight the SCN as part of the overall SSBCI program in WY. Lenders will learn about the SCN and be constantly reminded of the SCN program. • WSNC will encourage participating lenders to extend an invitation to appropriate bank customers to participate in the SCN. • WSCN will market the SCN to municipalities, universities, colleges, and economic development organizations. This is a proven method to identify groups of high net worth individuals who either active angel investors or seek to be active angel investors. WSCN will then convene prospective angel investors in a community to walk thru the SCN and steps necessary to form a regional angel fund. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 2 of 3 TD F 103.1.F (04/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4A Narrative Statement for Each OCSP 6) Underwriting. When selecting funds for investment, WSCN expects to use the following criteria for selecting angel funds managed by their members: • Successful Business Builders WSCN will favor angel funds that are substantially composed of business builders who have become prosperous, are seeking to give back to young entrepreneurs, and are willing to spend time and share their knowledge with their angel peers and investee companies. • Desiring to Connect WSCN will favor angel funds that have $2 million or more in total commitments (without WSCN), a term of at least 10 years, and a governance system that is relatively flat and strives to use the knowledge of all the members. Angel funds are expected to participate in the WSCN Seed Capital Network, to engage with other members of the Network, and to attend statewide venture forums hosted by the Network. Individual angels are expected to consider co‐investing with their fund, and funds are expected to consider co‐investing with other angel funds. • Seeking Fair Profits WSCN will have a preference for angel funds that seek to learn the methods and disciplines of angel investing, to become excellent at angel investing, and to that end welcome the administrative support and facilitation • Willing to be Visible WSCN will seek to support angel funds that elect to be visible to entrepreneurs and that support entrepreneurial development programs in the community. Angel funds will have discretion to select their own business investments and will be required to vet deals with WSCN to determine eligibility for SSBCI funds. Applicant investees will be required to complete an application, generally in the form of the attached draft Application for Loan Guarantee or Investment. WSCN will review transactions for eligibility pursuant to SSBCI statute, rules and guidelines, following the checklist of eligibility criteria in the Application for Loan Guarantee or Investment. Each applicant will be required to provide an assurance that it complies with eligibility criteria. 7) Operations WSCN expects to serve as the administrator and facilitator of WSCN‐sponsored angel funds, supporting the core processes that include: • Organizing the Fund • Establishing Investment Criteria • Marketing for Deal Flow • Screening and Filtering Applications • Due Diligence • Valuing the Company and Pricing the Deal • Drafting the Term Sheet • Negotiating and Closing • Adding Value • Exiting Using DCN’s WBT Angel system, WSCN will provide an online portal for each angel fund. The attached illustrates the draft website for the University of Wyoming community (the Cowboys). A portal serves as a site where entrepreneurs can apply for an investment and prospective angels can explore the fund. Access to the private records of the site will be through a secure login. There fund members can review deals, communicate online securely with other members, and review fund documents. This medium will be the primary means of communicating with members of the angel fund beyond periodic meetings. Our goal is to deploy funds as quickly as possible. If the market provides greater opportunity in one of our two programs, we may seek permission from Treasury to shift funds to the program showing the greatest demand. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 3 of 3 TD F 103.1.F (04/2011) ---PAGE BREAK--- ---PAGE BREAK--- 1A. Enter the name of the Applicant: City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, or political subdivision of the Applicant that has been designated to implement the program(s) described in this application. Organization Name: City of Laramie, WY Section 4: Other Credit Support Programs (OCSP). Complete this Section if applying for SSBCI funds to use for a State Other Credit Support Program 4B. If the Applicant OCSP provides credit support through a financial institution lender or through a non‐financial institution lender or investor, and there are instances where financial institution lender (or, if applicable, the non‐financial institution lender or investor) bear less that 20% risk of loss, the Applicant should use the space provided below to demonstrate exceptional circumstances as to why the financial institution lender (or, if applicable, the non‐financial institution lender or investor) is unable to bear a greater share of the risk. Through the Credit Guarantee Program, WSCN will extend collateralized guarantees to lenders to support loans to qualifying small businesses on a loan by loan basis. Each guarantee will be secured by a certificate of Deposit (CD) pledged by the WSCN as additional collateral for the underlying loan. The CD's may range in size from $5,000 to $1 million and each CD will generally cover 10% to 50% of the loan amount. The lender will typically bear 50% to 90% of the risk of loss. No lender will bear less than 20% risk of loss. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 1 of 2 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4B – Lender Capital at‐Risk Criteria for OCSPs State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 2 of 2 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative APPLICATION ATTACHMENT SECTION 4C –Leverage Calculations Line 17 of the Summary of Anticipated Program Benefits reflects overall leverage based on the entire allocation amount without netting out admin expenses. For the Seed Capital Network Program column reflects both private dollars and SSBCI dollars since the SSBCI dollars are invested in funds, and from there to companies. For the Credit Guarantee Program column reflects only private dollars since SSBCI dollars are used as collateral support for loans to companies. The Leverage ratios reflect Total Private Participation to SSBCI Allocation to Program. NOTES: Page 1 of 1 1 2 3 (d + e) 4 5 7 CAP Program : 8 9 OCSP Program(s) 10 Seed Capital Network Program 1,500,000 $ 18.0% 3,000,000 $ 13,666,667 $ 16,666,667 $ 30,333,333 $ 33,333,333 $ 10.1 : 1 33 382 11 Credit Guarantee Program 1,000,000 $ 10‐50% 9,686,388 $ 88,772,801 $ 20,475,000 $ 109,247,801 $ 109,247,801 $ 11.3 : 1 61 1558 12 OCSP (Description 3) : 13 OCSP (Description 4) : 14 Sub‐total OCSPs : 15 TOTAL ALL OCSP Programs 12,686,388 $ 102,439,468 $ 37,141,667 $ 139,581,134 $ 142,581,134 $ 11.0 : 1 94 1940 16 Administrative Funds 481,962 $ 17 TOTAL ANTICIPATED BENEFITS 13,168,350 $ 102,439,468 $ 37,141,667 $ 139,581,134 $ 142,581,134 $ 10.6 : 1 Summary of Anticipated Program Benefits OCSP Description Maximum Principal Amount Allocation to Proposed Program Private Share 1,2,3 Leverage Private to Public Number of Loans/ Projects Jobs 4 Created SSBCI Share Initial Private Participation Follow‐on or 2nd Round Total Private Participation Total Project Costs 1 NORTH DAKOTA SSBCI 4/3/2012 v11 2 Red River Corridor Fund 3 Income and Expense Budget 4 5 FY 2012 2013 2014 2015 2016 Total Ratio 6 Activity 7 Transfer 13,168,350 4,345,556 4,345,556 4,477,239 13,168,350 8 Admin Fee 217,278 130,367 134,317 481,962 9 Invested 4,128,278 4,215,189 4,342,922 12,686,388 10 Seed Capital Network Program 11 Investments 18% 1,000,000 1,000,000 1,000,000 ‐ ‐ 3,000,000 12 Angel Fund Match 4,555,556 4,555,556 4,555,556 ‐ ‐ 13,666,667 13 Angel Fund Balance 5,555,556 11,111,111 16,666,667 16,666,667 16,666,667 ‐ 14 Co‐Investments ‐ ‐ 5,555,556 5,555,556 5,555,556 16,666,667 15 Co‐Investments Balance ‐ ‐ 5,555,556 11,111,111 16,666,667 ‐ 16 Total Annual Leverage Achieved 4,555,556 4,555,556 10,111,111 5,555,556 5,555,556 30,333,333 10.1 17 Initial Private Participation 4,555,556 4,555,556 4,555,556 ‐ ‐ 13,666,667 18 Subsequent Rounds ‐ ‐ 5,555,556 5,555,556 5,555,556 16,666,667 19 Credit Guarantee Program 20 Allocated to Credit Guarantees 3,128,278 3,215,189 3,342,922 9,686,388 21 First Tranche 22 Collateral support 3,128,278 1,809,375 23 Matched Loans 17,043,291 10,237,500 27,280,791 8.7 24 Less losses 140,772 81,422 222,194 25 Plus additional private loans 11,626,422 26 Second Tranche 27 Loan Guarantees 3,215,189 1,809,375 28 Matched Loans 17,516,795 10,237,500 27,754,295 8.6 29 Less losses 144,683 81,422 226,105 30 Plus additional private loans 11,949,432 31 Third Tranche 32 Loan Guarantees 3,342,922 33 Matched Loans 18,212,702 18,212,702 5.4 34 Less losses 150,431 150,431 35 Plus additional private loans 12,424,159 36 Total Annual Leverage Achieved 28,669,713 29,466,227 30,636,861 10,237,500 10,237,500 109,247,801 11.3 37 Initial Private Participation 28,669,713 29,466,227 30,636,861 88,772,801 38 Subsequent Rounds 10,237,500 10,237,500 20,475,000 39 Total Activity 33,225,269 34,021,783 40,747,972 15,793,056 15,793,056 139,581,134 10.6 40 Leverage Ratio 7.6 7.7 8.2 9.4 10.6 10.6 Losses 140,772 144,683 150,431 81,422 81,422 598,731 ---PAGE BREAK--- CGP Leverage Table Additional Private Loans at closing or subsequently, plus some recycling Initial Loans Amount CSP‐ supported loans Add'l Private Loans Total Financing CSP% CSP $ Recycled Loans Amount CSP‐supported loans CSP% Total CSP $ 3 257,590 772,770 772,770 50% 386,385 3 325,000 975,000 25% 243,750 12 500,000 6,000,000 6,000,000 40% 2,400,000 7 500,000 3,500,000 25% 875,000 15 1,000,000 15,000,000 10,000,000 25,000,000 20% 3,000,000 7 1,000,000 7,000,000 20% 1,400,000 8 2,000,000 16,000,000 12,000,000 28,000,000 15% 2,400,000 2 2,000,000 4,000,000 15% 600,000 3 5,000,000 15,000,000 14,000,000 29,000,000 10% 1,500,000 1 5,000,000 5,000,000 10% 500,000 41 52,772,770 36,000,000 88,772,770 18% 9,686,385 20 20,475,000 18% 3,618,750 Total Financing 109,247,770 Leverage 68% 11.3 ---PAGE BREAK--- WSCN 4/3/2012 v11 1 2 3 (d + e) 4 5 7 CAP Program : 8 9 OCSP Program(s) 10 Seed Capital Network Program 1,500,000 $ 18.0% 3,000,000 $ 13,666,667 $ 16,666,667 $ 30,333,333 $ 33,333,333 $ 10.1 : 1 33 382 11 Credit Guarantee Program 1,000,000 $ 10‐50% 9,686,388 $ 88,772,801 $ 20,475,000 $ 109,247,801 $ 109,247,801 $ 11.3 : 1 61 1558 12 OCSP (Description 3) : 13 OCSP (Description 4) : 14 Sub‐total OCSPs : 15 TOTAL ALL OCSP Programs 12,686,388 $ 102,439,468 $ 37,141,667 $ 139,581,134 $ 142,581,134 $ 11.0 : 1 94 1940 16 Administrative Funds 481,962 $ 17 TOTAL ANTICIPATED BENEFITS 13,168,350 $ 102,439,468 $ 37,141,667 $ 139,581,134 $ 142,581,134 $ 10.6 : 1 Note. 1 Explain source of new private financing data or methodology used to calculate leverage if other than historical. 2 Describe, if applicable, data from regional State program that serves as the basis for estimates of new private financing. 3 Include any additional information that will enable reviewer to determine reasonableness of leverage calculation. 4 Explain rationale and or assumptions used to estimate new jobs created. If jobs retained are also anticipated break out those figures on Attachment for Section 4D for each OCSP. Seed Capital Netwk Prgm 33% 33% 34% Originated Avg # Investments Tranche 1 Tranche 2 Tranch 3 Total $13,168,350 $4,345,556 $4,345,556 $4,477,239 3,000,000 0.05 0.03 0.03 16,666,667 500,000 33 22.782% 49,500 29,700 30,600 109,800 Net 2,950,500 2,920,800 2,890,200 Credit Gurantee Prgm 33% 33% 34% Originated Avg # Investments Tranche 1 Tranche 2 Tranch 3 Total $13,168,350 $4,345,556 $4,345,556 $4,477,239 109,247,801 1,790,947 61 10,168,350 0.05 0.03 0.03 Originated Avg # Companies 77.218% 167,778 100,667 103,717 372,162 Net 10,000,572 9,899,906 9,796,188 109,247,801 1,790,947 61 Summary of Anticipated Program Benefits OCSP Description Maximum Principal Amount Allocation to Proposed Program Private Share 1,2,3 Leverage Private to Public Number of Loans/ Projects Jobs 4 Created SSBCI Share Initial Private Participation Follow‐on or 2nd Round Total Private Participation Total Project Costs ---PAGE BREAK--- Seed Fund Template & Projections Credit Guarantee Template & Projections 131,000,000 Template Equity 37,725,989 Template Guarantee Loans 1,500 Template Jobs 538 Template Jobs 87,333 Template Avg $/job 70,123 Template Avg $/job 33,333,333 Tot Proj Costs 109,247,801 Tot Proj Costs 382 Tot Proj Jobs 1,558 Tot Proj Jobs 5 Job‐Years 5 Job‐Years 53,931 Avg State Wage 53,931 Avg State Wage 102,921,756 Wages 420,109,811 Wages 30,876,527 Taxes 126,032,943 Taxes 13,305,135 Total Credit Guarantees 8,540 Gurantee support per job 70,122.66 Tot Proj Cost/Job ---PAGE BREAK--- State Small Business Credit Initiative APPLICATION ATTACHMENT SECTION 4E –Anticipated Benefits from Each OCSP Section 1: Applicant Information 1A. Enter the name of the Applicant: City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, or political subdivision of the Applicant that has been designated to implement the program(s) described in this application. Organization Name: City of Laramie, WY Section 4: Other Credit Support Programs (OCSP). Complete this Section if applying for SSBCI funds to use for a State Other Credit Support Program 4E. Applicants should use the space provided below to describe the anticipated benefits from each OCSP to the State, its businesses, its residents, and describe the extent to which resulting small business lending will expand economic opportunities. For Loan Guarantee Programs, Applicants must provide detailed assumptions concerning estimated number of loans and estimated loan amounts during the course of the SSBCI. Applicants that are enacting new Collateral Support Programs should present detailed assumptions concerning estimated loan volume and overall federal collateral support used for such loans. The metrics used should include, but need not be limited to: • Jobs created • The number and value of new OCSP small business loans • Increases in sales, income or other tax revenues paid by businesses or workers Credit Guarantee Program (CGP) (Amount requested: $10,168,350.00) Based on experience with a similar program implemented by members of the WSCN team in Oklahoma, the Credit Guarantee Program is expected to create at least one job for every $13,286 in credit support (or $70,123 in loan amount) within 3 years from the date of each guaranteed loan. As the approximately $10 million committed to the Credit Guarantee Program is deployed, matched with other private capital and recycled, the program is expected to create 1558 jobs. A typical borrower that qualifies for this program (other than a startup) is typically growing at a rate of 20% per year on average when it applies for financing under the program. Over time, after the first year post‐ financing, a more modest rate of growth of 10% per year is expected. Allowing for an average job duration of five years, the 1558 workers are expected to earn over $420 million in wages (at $53,931 average 2009 WY wage) and pay about 33% of their wages, or $126 million, in federal, state and local taxes. The Credit Guarantee Program will focus on manufacturing firms as its primary target, and on existing companies that need capital to grow. The distribution of loans by sector, size and stage is expected to approximate the experience of the Template Program described below, although reflecting the unique opportunities in Wyoming and modified to emphasize working capital rather than fixed assets, and shorter terms – less than two years – rather than the 5 years required in the latter years of the Template Program. Wyoming bankers have indicated this is the primary need for the region. Template The Credit Guarantee Program is modeled after loan and investment fund that operated from 1997 to 2008 by members of the WSCN team. With support from the State of Oklahoma, the program made 88 loans and pledged CDs that averaged 18% of the loan amounts. One job was created for every $12,500 in guarantee amount, or approximately one job for every $70,123 in loan amount. The program experienced a loss rate through 2010 of 4.5% of CDs pledged. The loans were distributed among the following sectors: 34% to manufacturing, 24% to service and retail, 23% to medical, 13% to distributors, 4% to construction, and 1% to technology. 76% of the loans were to existing companies and 24% to start‐ups. The Oklahoma program emphasized manufacturing, but not to the exclusion of other small businesses. Please refer to the attached schedule. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 1 of 5 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4E –Anticipated Benefits from Each OCSP State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 2 of 5 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4E –Anticipated Benefits from Each OCSP Seed Capital Network Program (SCN) (Amount requested: $3,000,000.00) The State Seed Capital Network Program is expected to catalyze over $10 for every $1 committed to angel funds. The $3 million requested for this program is expected to attract a private match of $13.6 million in capital invested into angel funds, and then to attract another $16.6 million in the form of co‐investment at the transaction level. One dollar of equity tends to leverage 2 or 3 dollars of debt. This is expected for the portfolio, but likely not during the Allocation Time Period. The program is expected to create 382 jobs assuming a rate of job creation of $87,333 invested per job created. Based on the experience of the WSCN team, these companies tend to be startups. While some will fail, others will grow very rapidly with financing. Over time, after the first year post‐financing, a rate of growth of 10% per year is expected as an average across the portfolio. Allowing for average job duration of five years, the 382 direct jobs are expected to be paid over $102 million in wages (382 x 5 years x $53,931 average 2009 WY salary) and pay about 33% of their wages, or $30 million, in federal, state and local taxes. Template The estimated impact of the Seed Capital Network Program set forth in the preceding paragraph is based on the experience of the WSCN team with similar programs in Oklahoma, Arkansas and Iowa. From 1993 through 2009, the Oklahoma Capital Investment Board (OCIB) invested approximately $60 million in 19 seed and venture capital funds. In turn, these funds invested and attracted equity co‐investment of $131 million in Oklahoma companies. As a result, direct payroll to 1500 workers at investee companies was $204 million, and the total of direct and indirect payroll was $338 million, as documented by the report of Applied Economics, March 2010, at www.ocib.org. This report only counted jobs created in Oklahoma. OCIB represented about 7% of the total capital of its portfolio funds. Therefore, this template benchmark may materially underestimate the total jobs to be created with this program. This type of leverage is also typical of angel funds. In 2004 members of the team committed $100,000 through the Arkansas Institutional Fund to the Fund for Arkansas Future, an angel fund with over $6 million in subscribed capital. Today the portfolio has eleven Arkansas companies. The average investment size is 340,000, for a total of about $3.74 million, and the average amount co‐invested by other private investors is $439,000, for a total of about $4.8 million. The foregoing projections are based on assumptions believed to be reasonable in light of the information available at this time. However, as with all economic forecasting, there can be no guarantee that actual results from the investments in the CGP and SCN will match these projections. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 3 of 5 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4E –Anticipated Benefits from Each OCSP State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 4 of 5 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 4E –Anticipated Benefits from Each OCSP State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 5 of 5 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative APPLICATION ATTACHMENT SECTION 4F – Operational Capacity, Skills, and Experience of the Management Team for Each OCSP Section 1: Applicant Information 1A. Enter the name of the Applicant: City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, or political subdivision of the Applicant that has been designated to implement the program(s) described in this application. Organization Name: City of Laramie, WY Section 4: Other Credit Support Programs (OCSP). Complete this Section if applying for SSBCI funds to use for a State Other Credit Support Program 4F. Applicant should use the space provided to describe operational capacity, skills, and experience of the management team of the State OCSP. The metrics used should include, but need not be limited to: • Qualifications and financial industry experience of senior management • Experience of senior management in operating CAPs or OCSPs • Adoption of industry best practices use of risk management strategies employed by analogous successful programs) Qualifications and Financial Industry Experience Each OCSP described in this Application will be implemented through a contract with Wyoming Smart Capital Network, LLC, a Wyoming limited liability company. The WSCN will be managed by Development Capital Networks (DCN), http://www.dcnteam.com, a national firm with an office in Laramie. DCN specializes in strategies that build regional innovation economies. DCN principals and affiliates have created and managed successful loan and investment programs similar to the programs proposed in this application. DCN has delivered training to angel investors in over 100 communities in the U.S. and produces the annual WBT Innovation Marketplace, the nation's largest networking and "deal" event for seed stage companies seeking to commercialize new technologies. DCN leads the Innovation Finance course of the Council of Development Finance Agencies, and with partners, hosts regional venture forums in Iowa and Oklahoma. The firm offers customized patent landscapes to technology developers seeking a competitive edge and helps companies scout for technologies for new products and processes. The management team includes professionals with extensive experience in building and managing successful development loan and equity programs. The team is led by Paul Huleatt, Diane Wolverton, and Robert Heard, and supported by Mark Huston, Jeff Carpenter, and Jim Troxel. See bios below. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 1 of 5 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative APPLICATION ATTACHMENT U.S. Department of the Treasury SECTION 4F Operational Capacity, Skills, and Experience of the Management Team for Each OCSP Experience Operating State Credit Support or Capital Access Programs Several of our accomplishments include: • Paul Huleatt led the teams that advised over 500 small businesses on commercialization of NSF‐funded technologies and over 650 emerging companies and technologies as part of the annual WBT Innovation Marketplace. • Jim, Jeff and Paul designed the WBTangel system for communities and universities. • Robert Heard launched Oklahoma’s Capital Access Program, which has provided credit insurance for loans to over 1500 small businesses. • Robert served as the first President of the Oklahoma Capital Investment Board, a $100 million state‐sponsored venture capital organization, responsible for venture fund investments. • Mark Huston served as Manager of Business Finance at the Oregon Economic and Community Development Department for 21 years with responsibility for State of Oregon programs delivering revenue bonds, loans, guaranties, and credit enhancement. Under his management, thousands of Oregon companies were provided with over $1 billion of financing. • Mark Huston led a $50 million program for making development loans to small businesses in partnership with banks. • Mark Huston and Robert Heard are managers of state venture programs in Arkansas and Iowa. • Jim Troxel has taught over 100 seminars on seed investing to over 4,000 angel investors. • Jim designed the angel system for the alumni association of a public university. • Paul Huleatt made EX‐IM Bank guaranteed loans while an officer at Silicon Valley Bank. • Robert launched the Capital Resources Division of the Oklahoma Dept. of Commerce in 1987 and led the development of loan guarantee and investment programs. • Jeff Carpenter led the technology commercialization unit within the University of Minnesota Technology Transfer Office. Adoption of industry best practices The team is committed to using best practices, defined as methods that a) deliver high benefit per cost, b) catalyze a meaningful level of loans and investment, and c) engage private lenders and investors as partners. Members of the team contribute to the knowledge of best practices through active involvement in training and networking events, both as trainees and as trainers. The team is active in the Council of Development Finance Agencies, where Mark Huston has served as President and Training Committee Chair. In 2011 Robert Heard and Jim Troxel delivered CDFA’s first Innovation Finance Course. IN 2000 Robert co‐authorized the National Governors’ Association Best Practices Report on “Experiences of States with Seed and Venture Capital.” ---PAGE BREAK--- State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 2 of 5 TD F 103.1.I (1/2011) State Small Business Credit Initiative APPLICATION ATTACHMENT U.S. Department of the Treasury SECTION 4F Operational Capacity, Skills, and Experience of the Management Team for Each OCSP TEAM BIOS and KEY ASSIGNMENTS Paul Huleatt and Robert Heard are the senior members of the team responsible for the overall operation of the WSCN and approval of commitments for credit guarantees and investments. Diane Wolverton, WSCN Executive Director Diane serves as Executive Director of the WSCN. Diane is full time with WSCN. Her key assignments include serving as the Wyoming‐based point of contact for WSCN, marketing the collateral support program to Wyoming banks and economic developers, identifying champions for the creation of local angel funds, and supporting Paul and Jim Troxel in the facilitation of angel funds. Diane will organize training events and maintain the WSCN website. From 1995 to 2011 Diane was State Director of the University of Wyoming Small Business Development Center. She managed all aspects of the WyomingEntrepreneur.Biz statewide network that is devoted to training and counseling small business owners. She was responsible for a $2 million‐plus budget, grant writing, fund raising, financial and programmatic reporting, personnel (20 employees), program development, public outreach and communications, training and strategic planning. Diane. The Center advises aspiring entrepreneurs on how to start a business, buy or sell a business, find capital, conduct market research, and build and grow an enterprise. Paul Huleatt, WSCN Operations and Investment Manager Paul supervises the WSCN team. He leads the evaluation and structuring of commitments to banks for credit guarantees and the evaluation and structuring of commitments to invest in angel funds. Paul is one of the founders and Managing Partners of DCN. He currently serves as Entrepreneurial Services Team Leader, responsible for DCN’s commercialization planning assistance program which has provided assistance to over 500 SBIR/STTR companies. Paul was the first CEO of the WBT Innovation Marketplace, a national event showcasing seed and pre‐seed stage technologies developed at top universities, federal labs, federal agencies, and federally supported research and development institutions. Paul has over 15 years experience in venture capital investing and commercial lending. He began his career as an Associate and Investment Officer with First Interstate Equity Corporation, the SBIC of First Interstate Bank. He later served as Business Development Officer for Norwest Business Credit, LaSalle Bank and Zions Bank. Prior to DCN, Paul served as Vice President and Business Development Officer for Silicon Valley Bank. Paul has a Bachelors degree in Finance with honors from Northern Arizona University and an MBA from Arizona State University. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 3 of 5 ---PAGE BREAK--- TD F 103.1.I (1/2011) State Small Business Credit Initiative APPLICATION ATTACHMENT U.S. Department of the Treasury SECTION 4F Operational Capacity, Skills, and Experience of the Management Team for Each OCSP Mark Huston, WSCN Credit Guarantee Consultant Mark advises Paul on the operation of the Credit Guarantee Program and the structuring of commitments to banks for credit guarantees. Mark joined Cimarron Capital Partners fund of funds team in July of 2008 and serves as Portfolio Manager. He began his association with Cimarron in December 2004 as a Managing Director of the firm’s $50 million direct investment fund that finances growing companies in Oklahoma. It is capitalized in partnership with OG+E, the state's largest utility and supported by the state. Prior to joining Cimarron, Mark was the Manager of Business Finance at the Oregon Economic and Community Development Department. He served in that capacity for over 21 years ‐ from 1983 to 2004 ‐ with responsibility for State of Oregon programs delivering revenue bonds, loans, guaranties, and credit enhancement. Under his management, thousands of Oregon companies were provided with over $1 billion of financing. Mark served on the Oregon State Bond Committee. Mark is a Director and former President of the national Council of Development Finance Agencies. He received a Masters of Public Administration degree from Arizona State University and a Bachelors of Science degree in Economics from the University of Idaho. Mark makes his home in Des Moines, Iowa. Robert Heard, WSCN Manager Robert shares with Paul responsibility for the overall operation of the WSCN, but in more of an oversight role than in daily operations. With Paul, he approves commitments for credit guarantees and investments. With Paul and Jim, Robert formed Development Capital Networks in 2002 and serves with Paul as a Managing Director of the firm. Robert is also a Managing Director and Founder of Cimarron Capital Partners. Cimarron is an investor in venture capital and private equity funds and serves public and private investors in the U.S. and Latin America. In 1994, Robert formed Edge Development Capital, Inc., which serves as fund manager of Cimarron’s direct fund and of the Oklahoma Capital Investment Board. Cimarron and its affiliates are responsible for $280 million in program assets. Robert has helped build organizations that support the growth of the entrepreneurial economy. He has served as a founding director of the National Association of Seed and Venture Funds, Latin American Venture Capital Association, Technology Ventures Summit, and Robert was an author of the National Governors' Association study on "The Experience of States with Seed and Venture Capital." He sits on the advisory committees of numerous venture capital funds and a serves as a managing director of Development Capital Networks LLC. A resident of Oklahoma City, Robert earned his undergraduate degree from the University of Oklahoma and his MBA from the J.L. Kellogg Graduate School of Management at Northwestern University. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 4 of 5 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative APPLICATION ATTACHMENT U.S. Department of the Treasury SECTION 4F Operational Capacity, Skills, and Experience of the Management Team for Each OCSP Jeff Carpenter, WSCN Open Innovation Manager Jeff will support angel investors in the evaluation and structuring of commitments to companies requiring technology acquisition and commercialization. Jeff helps innovators be more competitive by understanding the players in their markets and using this knowledge to optimize their R&D, patenting, partnering, and exit strategies. He shows them ways to maximize the value of their IP investments and how to use patent landscape analysis to gain essential competitive intelligence. Finally, he works with technology developers, acquirers, and investors to understand their partnering and investment goals, and find them ideal matches. Jeff has over 15 years of experience in technology commercialization. Jeff was director of product development for a clean tech start‐up in the mid 90's, also supporting manufacturing, patenting, marketing, and sales. He licensed University of Minnesota inventions during nearly 10 years in the UM tech transfer office, where he evaluated licensing prospects for well over 100 inventions across many technology areas, then directed patenting and negotiated licenses for the most promising. His expertise includes market and competitor analysis, strategic patenting, patent landscape analysis, partner identification and vetting, patent valuation, and license negotiation. Over the past decade, Jeff has performed technology scouting for an international medical device company, served as reviewer on NSF SBIR commercialization plan panels, assisted applicants in preparing SBIR commercialization plans, and performed opportunity assessment of emerging technologies from the private sector. Based in St. Paul, MN, Dr. Carpenter holds a PhD in Cell and Developmental Biology, supporting programs in Genetics and Biochemistry from the University of Minnesota; a Masters of Science degree in Forestry, from the University of Montana; a Bachelors of Science degree in Forestry/Range Resource Management from the University of Montana. After receiving his doctorate, Jeff worked for 15 months as a Congressional Science Fellow in the U.S. Senate. Jim Troxel, WSCN Angel Fund Facilitator and Training Director Jim will serve as the lead facilitator of local angel funds, supported in this task by Paul and Diane. And Jim will lead WSCN training events for angel investors and entrepreneurs seeking to better understand seed and angel capital. Jim is an author and consultant to public service organizations and private companies worldwide. He is a founding partner of Development Capital Networks, LLC, as well as Millennia Consulting, LLC. Jim previously served as Training Director for the National Association of Seed and Venture Funds (NASVF) and has led over 1000 workshops in 21 countries and over 100 seminars on angel investing for entrepreneurs and angel investors. During his career Jim has launched five businesses and served as an advisor to countless others. He guides the design and delivery of conferences and workshops of DCN clients, trains the facilitators for angel investing seminars and leads the development of new training events and angel funds through the firm's WBT Angels unit. As an adjunct faculty member of DePaul University in Chicago, Jim has created a new course on "Facilitating Adult Learning". He also serves as a judge for the university's New Venture Challenge, a business plan competition for students. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 5 of 5 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative APPLICATION ATTACHMENT SECTION 4G – Capacity of OCSP Staff to Manage Increases in the Volume of its Small Business Lending Section 1: Applicant Information 1A. Enter the name of the Application: City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, authority, political subdivision of the State, or other organization that has been designated to implement the program(s) described in this application. Organization Name: City of Laramie, WY Section 4: Other Credit Support Programs (OCSP). Complete this Section if applying for SSBCI funds to use for a State Other Credit Support Program 4G. Applicant should use the space provided below to describe for each OCSP, the capacity of OCSP staff to manage increases in the volume of its small business lending. Evidence cited should include, but need not be limited to: • Financial strength • Operational capacity The lead city, City of Laramie, and each of the Joint Applicants and participating municipalities have agreed that each OCSP described in the Applications will be implemented through WSCN. The methodology and coordination between the City of Laramie and other Joint Applicants as it pertains to WSCN, specifically the capacity of its staff to manage the increases in the volume of its small business lending, are further described in response to question 4H of this Application. The City of Laramie and other Joint Applicants intend to enter into a cooperative agreement and create an Advisory Board which defines and memorializes the relationship and duties therein. The Wyoming Smart Capital Network LLC is a new Wyoming entity created to implement the Programs and serve as the revolving fund for recycling of the Allocated Funds during and after the Allocation Time Period. WSCN LLC has no operating history, no historical income or expense and no existing assets or liabilities. Development Capital Networks LLC, a Delaware company, serves as the manager and member of WSCN, and as a contracting entity for this Application. The latest year‐end financial statements for DCN are attached. DCN has access to Cimarron Capital Partners (Cimarron), a builder and manager of state‐sponsored venture capital programs, to consult with and support. Cimarron maintains a database of hundreds of investors accessible by preference of sector, stage and geography, and can identify funds that are currently investing. Cimarron’s database of resources will be made available through DCN to the Wyoming Smart Capital Network at no cost. We anticipate the organization may tap this resource when an angel fund in the region is searching for a venture investor with unique preferences or skills. Please refer to the attached letter from Cimarron. The WSCN team has qualities and resources to perform the Programs at an exceptional level: Well Staffed. DCN has 15 full time and 10 part‐time staff, and the capacity to add and train staff that might be required for this project. Staying Power. The WSCN team has more than 100 years of experience in development lending, regional private equity programs and venture investing in small companies. DCN was formed in 2002 and its predecessor in 1994. The staff and systems of the team are well developed and available to support this project. Connected in Wyoming. The WSCN team works with universities, labs, private investors, and economic developers across the state and country. The team will leverage these relationships to market the Seed Capital Network Program to private investors. Connected to Capital. The team is connected to capital. DCN produces the WBT Innovation Marketplace, gathering seed stage investors and corporate investors from across the country to explore the newest seed stage tech companies. Cimarron tracks the venture capital industry across the nation and is prepared to facilitate the sharing of deals by angel investors with venture funds. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 1 of 2 TD F 103.1.I (1/2011) ---PAGE BREAK--- State Small Business Credit Initiative APPLICATION ATTACHMENT U.S. Department of the Treasury SECTION 4G – Capacity of OCSP Staff to Manage increases in the Volume of its Small Business Lending Committed to Best Practices. The team is committed to exploring and learning from best practices, and implementing loan and investment programs that produce good results for public sector sponsors. Members of the team: • Co‐authored the 2000 Best Practices report for the National Governors Association, “The Experiences of States with Seed and Venture Capital” • Produce the Innovation Finance course of the national Council of Development Finance Agencies Prepared to Lead. The team is prepared to implement the CGP and SCN programs in Wyoming communities. Members of the team have delivered or are delivering programs of relevant scope and mission, including: • $50 million development fund, providing unsecured and subordinate development loans and loan guarantees in partnership with commercial banks • $100 million investment program of the Oklahoma Capital Investment Board, committing to seed, venture and private equity funds • $60 million investment program of the Iowa Fund of Funds, committing to venture capital and private equity funds • $70 million investment program of the Arkansas Institutional Fund, committing to angel funds, seed funds, venture funds and private equity funds • $50 million Oklahoma Capital Access Program, providing guarantees akin to loan insurance to banks • Leveraged loan guarantee program for the State of Oregon • Deal origination for venture funds, SBICs, and asset based lenders • Origination of federal and state guaranteed loans • Assistance to over 500 SBIR grantees on commercialization plans • The WBTangels (wbtangels.com), a comprehensive system for supporting and facilitating angel investors as they organize and invest in young companies. • Training for angel investors in over 100 communities in 37 states. Internal Systems. Internal accounting and control systems will be supplied primarily by WSCN member DCN. DCN is on the GSA‐MOBIS Schedule. The team employs full time administration and support staff: • Accounting – Lori Griffin, CPA, MBA serves as Chief Financial Officer. She and 2 bookkeepers are responsible for maintaining books and records in audit ready form. The team is experienced in accounting for federal funding from DOE, NREL, NIST, NSF, and EDA. • The accounting team for DCN and Cimarron is experienced in supporting annual audits of lending, investing and service organizations and since 1992 have managed public accounts. The accounting staff supported six audits for the 2010 year. Audited financial reports are provided to state clients in Iowa, Arkansas and Oklahoma. From the inception of each program every audit has been issued without qualification. The system of financial controls is in place that enables WSCN to comply with all applicable federal and state audit, compliance, monitoring and reporting requirements. • Information Technology – Sam DeNies serves as IT Director. He and one support staff build and manage databases, web sites, and communication systems on a secure Lotus Notes platform. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 2 of 2 TD F 103.1.N (04/2011) ---PAGE BREAK--- State Small Business Credit Initiative APPLICATION ATTACHMENT SECTION 4H Internal Accounting and Administrative Controls Systems Used by the OCSP Staff Section 1: Applicant Information 1A. Enter the name of the Applicant: City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, or political subdivision of the Applicant that has been designated to implement the program(s) described in this application. Organization Name: City of Laramie, WY Section 4: Other Credit Support Programs (OCSP). Complete this Section if applying for SSBCI funds to use for a State Other Credit Support Program 4H. Applicants should use the space provided below to describe for each OCSP, the internal accounting and administrative controls systems used by the OCSP staff and the means they use to safeguard against waste, loss, unauthorized use, and misappropriation. If available, evidence cited should include, but need not be limited to: • Periodic internal audits • Annual independent audits (including management letters) • Program financial statements current within the last 6 months. • Accounting and financial reporting system compliant with OMB Circular A‐127 In addition, if available, the Applicant must attach a copy of the most recent independent financial audit or program financial statements for each OCSP, dated within the last six months. If no independent financial audit or program financial statements exist for the OCSP, then the Applicant must attach a copy of the independent financial audit or program financial statements, dated within the last six months, for the entity implementing each OCSP as identified in the response to Section 1B or 1D of the application. The joint applicant cities will enter into a cooperative agreement that sets forth the responsibilities and obligations of the parties under the Allocation Agreement, to exercise oversight of the WSCN, to engage and supervise the compliance contractor and financial auditor, and the system for taking any corrective actions. The cooperative agreement details how the City of Laramie will administer contracts with the Contracting Entity, WSCN, and an independent auditor, who will review the program. Each joint applicant will receive copies of audits and all reports and be expected to review these reports. An Advisory Board will be formed to provide a venue for discussion and input into the oversight function. The staff of the WSCN will facilitate the delivery of reports to cities, the gathering of approvals from the cities, and the delivery of approvals to Treasury. Wyoming cities are governed by a city council form of government with a mayor providing leadership to the council. The Mayor acts as the chief executive of the city and has fiduciary responsibility for the actions of the city. Each Mayor has taken an oath of office to affirm his or her commitment and understanding of this important role. Some of Wyoming cities and towns have a form of government that includes a city manager or administrator who has the authority to conduct business on behalf of the city. The initial members of the Advisory Board will be the Mayor or chief administrator of each of the joint applicants. Casper, Paul C. Bertoglio, Mayor Cody, Nancy Brown, Mayor Douglas, Bruce A. Jones, Mayor State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 1 of 3 TD F 103.1.N (04/2011) ---PAGE BREAK--- Edgerton, H. H. King, Jr., Mayor Gillette, Carter Napier, City Administrator Green River, Hank Castillon, Mayor Hanna, Tony Poulos, Mayor Hartville, Darrell L. Offe, Mayor Laramie, Janine Jordan, City Manager Midwest, Guy Chapman, Mayor Pine Bluffs, Caryn Miller, Town Administrator Powell, Scott Mangold, Mayor Rawlins, Kenneth C. Klouda, Mayor Rock Springs, Carl. R. Demshar, Jr., Mayor Sundance, Paul Brooks, Mayor Wheatland, Jean Dixon, Mayor Cheyenne, Richard L. Kaysen, Mayor The Wyoming Smart Capital Network is well‐equipped to meet the reporting and accounting needs of the program. Internal accounting and administrative control systems will be supplied to WSCN primarily by its member, Development Capital Networks LLC (DCN). DCN is registered on the GSA MOBIS Schedule and is experienced in producing records in audit ready form and accounting for grants from Federal agencies, including NIST, DOE, NREL, and EDA. GENERAL POLICIES: In order to safeguard against waste, loss, unauthorized use, and misappropriation, the WSCN and its managers: • Have written policies for personnel, customer relations and confidentiality and require written acknowledgement of employee's receipt and reading of all policies. • Have a system of internal controls that include segregation of duties, approval for payments, and internal review of transactions. • Routinely investigate any accounting, analytical, or operating performance anomalies. • Focus on creating a culture of honesty, openness and assistance. • Communicate with employees on business practices and ethical behavior. • Work to eliminate opportunities for waste, loss, unauthorized use, and misappropriation. • Encourage employees to report possible problems in any area. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 1 (Cont) of 3 ---PAGE BREAK--- TD F 103.1.N (04/2011) State Small Business Credit Initiative APPLICATION ATTACHMENT U.S. Department of the Treasury SECTION 4H Internal Accounting and Administrative Controls Systems Used by the OCSP Staff ACCOUNTING AND FINANCIAL REPORTING POLICIES IN COMPLIANCE WITH SSBCI REGULATIONS: The following describes internal accounting and administrative control procedures for WSCN. Control activities involve segregation of duties, proper authorization of transactions and activities, adequate documents and records, physical control over assets and records, and independent checks on performance. Use a system of checks and balances to ensure no one person has control over all parts of a financial transaction. • Require purchases, payroll, and disbursements to be authorized by a designated person(s). • Separate handling (receipt and deposit) functions from record keeping functions (recording transactions and reconciling accounts). • Separate purchasing functions from payables functions. • Ensure that the same person is not authorized to write and sign a check or wire transfer form. • Require supervisors to approve employees’ time sheets before payroll is prepared. • Require payroll direct deposit paystubs to be distributed by a person other than the one authorizing or recording payroll transactions or preparing payroll direct deposits. • Ensure that all checks received are recorded and deposited in the form originally received. • Require accounting department employees to take vacations. Verify that all transactions meet the requirements of the Program. • When a check or wire transfer or ACH deposit is received, verify that the payment is proper under the Program. • When a purchase, payroll, or disbursement is authorized by a designated person(s), verify that it meets the requirements of Treasury rules and regulations and OMB Circular A‐133, cost principles of OMB Circular A‐87 and 48 CFR part 31, applicable provisions of the grants management common rule referenced in the attachment to OMB Circular A‐102, OMB Circular A‐127, OMB Circular A‐129, and SSBCI Policy Guidelines published by Treasury on its website at www.treasury.gov/ssbci. Reconcile bank accounts every month. • Require the reconciliation to be completed by an independent person who does not have bookkeeping responsibilities or check signing responsibilities, or require supervisory review of the reconciliation. • Examine canceled checks and other types of disbursements (e.g. wire transfers) to make sure vendors are recognized, expenditures are related to business, signatures are by authorized signers, and endorsements are appropriate. Examine bank • Statements and cancelled checks to make sure checks are not issued out of sequence. • Initial and date the bank statements or reconciliation report to document that a review and reconciliation was performed and file the bank statements and reconciliation. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 2 of 3 ---PAGE BREAK--- TD F 103.1.N (04/2011) State Small Business Credit Initiative APPLICATION ATTACHMENT U.S. Department of the Treasury SECTION 4H Internal Accounting and Administrative Controls Systems Used by the OCSP Staff For company credit cards, restrict use and verify all charges made to credit cards to ensure they were business‐related. • Limit the number of credit cards and users. • Apply a policy that credit cards are for business use only; prohibit use of cards for personal purposes with subsequent reimbursement. • Set account limits with credit card companies; do not allow cash advances on credit cards. • Inform employees of appropriate use of the cards and purchases that are not allowed. • Require employees to submit itemized, original receipts for all purchases. • Examine credit card statements and corresponding receipts each month, independently, to determine whether charges are appropriate and related to business. Ensure that assets such as computers, cell phones, equipment, and other resources are used only for official business. • Examine expense reports, credit card charges, telephone and other bills periodically to determine whether charges are appropriate and related to business. • Maintain an equipment list and periodically complete an equipment inventory. Protect checks against fraudulent use. • Prohibit writing checks payable to cash. • Deface and retain voided checks. • Store blank checks in a locked drawer or cabinet, and limit access to the checks. • Require that checks are to be signed only when all required information is entered on them and the documents to support them (invoices, approval) are attached. • Mark invoices “Paid” with the check number when checks are issued. • Enable hidden flags or audit trails on accounting software. Provide oversight of operations and management. • Monitor financial activity on a regular basis, comparing actual to budgeted revenues and expenses. • Require an explanation of any significant variations from budgeted amounts. • Periodically review the check register or general ledger to determine whether payroll taxes and other taxes are paid • Periodically review financial procedures and policies. • Require independent auditors to present and explain the annual financial statements and to provide management letters. • Evaluate employee performance annually against a written job description. • Participate in the hiring/approval to hire consultants including the independent auditors. • Review all contracts. Compliance testing to be performed. • On an ongoing basis randomly select elements of the accounting and operations systems for compliance testing. State Small Business Credit Initiative Application (OMB Control # 1505-0227) Page 3 of 3 TD F 103.1.O (04/2011) ---PAGE BREAK--- State Small Business Credit Initiative APPLICATION ATTACHMENT SECTION 5B‐ Reporting Mechanisms, Audits, or Other Activities Section 1: Applicant Information 1A. Enter the name of the Applicant City of Laramie, WY and Joint Applicants (See Attachment Q‐1A) 1B. Enter information below about the specific department, agency, or political subdivision of the Applicant that has been designated to implement the program(s) described in this application. Organization Name: City of Laramie, WY Section 5: Compliance 4H. Applicants should use the space provided below to provide a narrative statement describing what reporting mechanisms, audits, or other activities the Applicants has in place or need to be implemented to enable the Applicant to conduct oversight and meet annual reporting requirements for the proposed programs. The joint applicant cities will enter into a cooperative agreement that sets forth the responsibilities and obligations of the parties under the Allocation Agreement, to exercise oversight of the WSCN. Oversight will include the following general guidelines: Performance. To the extent allowed by the Allocation Agreement and applicable law, the Applicants have obligated the WSCN to satisfy and perform on behalf of the Applicants, and to be bound by as though it were the Applicant, all covenants and agreements of Applicants set forth in Article IV of the Allocation Agreement, including, without limitation, any and all restrictions set forth therein on uses of Allocated Funds, payment of Allowable Costs and uses of Program Income, and the requirement to deliver quarterly and annual reports. Compliance. The WSCN shall maintain all records required to be maintained by the Allocation Agreement and by other applicable state and/or federal law that are pertinent to the activities to be performed under this Agreement. In addition, WSCN shall maintain the following records: records providing a full description of each activity undertaken pursuant to this Agreement; records demonstrating that each activity undertaken is in compliance with the requirements of the Act and the Allocation Agreement; and records required to verify the eligibility of the activities and expenditures of WSCN pursuant to this Agreement. Reports. WSCN shall submit regular reports to Applicant regarding the activities of WSCN pursuant to this Agreement. Such reports shall be in such form and content and shall be provided with such frequency as may reasonably be required by co‐applicants as outlined in the cooperative agreement. Such reports shall include an annual report, including copies of its annual financial audit. Any failure to meet reporting criteria and resulting cost to be borne solely by WSCN. Annual Audit. WSCN, at WSCN's expense (but as an Allowable Cost under the Allocation Agreement), agrees to have an annual financial audit conducted of its books, records and affairs. Such financial audit shall be conducted in accordance with standard accounting procedures by a firm of independent certified accountants of recognized standing selected by the City and reasonably acceptable to WSCN. The audit shall be done in compliance with existing rules including any rules that may be promulgated in the future. Should the audit activity reveal non‐ compliance, the City may order additional auditing for purposes of identifying or verifying corrective action, and shall do so solely at WSCN’s expense. The City will engage a duly authorized representative to conduct regular oversight of the WSCN and perform these tasks. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 1 of 3 TD F 103.1 P (04/2011) ---PAGE BREAK--- State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 5B Reporting Mechanisms, Audits, or Other Activities Supervision: The co‐applicants, through Lead Applicant the City of Laramie, will have access to, and the right to audit, examine and make excerpts from or transcripts of, any pertinent documents, papers and records related to the performance of the Wyoming Smart Capital Network (WSCN).The City of Laramie as the lead Applicant, and the participating cities as joint Applicants, will engage accounting firm Casey Peterson & Associates of Rapid City or a comparably qualified firm, as its duly authorized representative to conduct regular oversight of the WSCN and perform these tasks: 1. Accept quarterly summary reports from WSCN. Review for completeness according to standards promulgated by Treasury for the Program. 2. Present quarterly reports to City of Laramie CEO for submission to Treasury. 3. Before it is made, review each loan guarantee to confirm that the file is complete, that the guarantee is being made in compliance with the requirements of the Program, and the facts of the file are being included in the summary reports. 4. Before it is made, review each angel fund investment to confirm that the file is complete, that the investment is being made in compliance with the requirements of the Program, and the facts of the file are being included in the summary reports. 5. Accept annual summary reports from the WSCN. Review for completeness according to standards promulgated by Treasury for the Program. 6. Present annual reports to City of Laramie CEO for submission to Treasury. 7. At request of the City of Laramie CEO and in compliance with the agreement with WSCN, act as the duly authorized representative of the City as often as deemed necessary to audit, examine and make excerpts from or transcripts of, any pertinent documents, papers and records related to WSCN’s performance under the agreement with WSCN. 8. Review administrative expenses prior to disbursement to confirm allowability per SSBCI requirements. The co‐applicants further intend to utilize an Advisory Board to ensure adequate supervision of WSCN and compliance with program objectives. The Board shall be composed of one member assigned by each of the partner municipalities and a representative of the Wyoming Business Council. Board members will have demonstrated experience and/or training that will assist the Board in meeting its duties and goals in the oversight of the third party administrator and the funds being distributed through the programs, Board members will include professionals with experience in lending and investments, economic development, or business development. Co‐applicants with a local or regional economic development organization (EDO) may appoint the chief executive of the EDO to serve on the Advisory Board. The Board will meet not less than quarterly during the operational period of the board and meetings may be conducted electronically or telephonically to obtain the most attendance practical. The staff of the WSCN will facilitate the delivery of reports to cities, the gathering of approvals from the cities, and the delivery of approvals to Treasury. The team expects to use an online site where City CEOs and administrators can access reports, make approvals, and generate signatures. The multiple approvals will be aggregated for delivery to Treasury. ---PAGE BREAK--- State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 2 of 3 TD F 103.1 P (04/2011) State Small Business Credit Initiative U.S. Department of the Treasury APPLICATION ATTACHMENT SECTION 5B Reporting Mechanisms, Audits, or Other Activities The duties of the Advisory Board shall include, but not be limited to, the following with the goal of providing new primary jobs within the partner municipalities: 1. Review of annual audits and reports prior to submission to the U.S. Department of Treasury 2. Review of quarterly use‐of‐funds report including but not limited to summary information on the applications made to the CGP and SCN programs; loans and investments made; the number, location and type of jobs created by the programs; and costs incurred and revenues received from the programs. 3. Establish operating procedures for the Advisory Board that will accomplish the necessary oversight of the WSCN and other vendors within the rules promulgated for the program by the U.S. Department of Treasury. The Applicants supervise the WSCN. The Applicants will contract for the financial audit and compliance review of the WSCN. Wyoming Smart Capital Network LLC is a Wyoming limited liability company. DCN is the manager and sole member of WSCN. The Applicants are contracting with WSCN to operate as a perpetual fund until all Allocated Funds have been invested, re‐invested as Program Income or non‐Program Income, and ultimately exhausted. This will occur both during and after the Allocation Time Period. The Allocated Funds are intended only for this purpose. WSCN may only pay compensation to DCN and may only reimburse DCN for expenses incurred subject to the restrictions on payment of Allowable Costs and uses of Program Income as set forth in the Allocation Agreement. The Applicants acknowledge these restrictions. State Small Business Credit Initiative Application (OMB Control # 1505‐0227) Page 3 of 3 TD F 103.1 P (04/2011) Revolving Fund ---PAGE BREAK--- April 2, 2012 Mr. Cliff Kellogg Project Director SSBCI U.S. Department of the Treasury 1500 Avenue NW Washington, DC 20220 Dear Mr. Kellogg, On behalf of Cimarron Capital Partners, LLC, its principals and affiliates (“Cimarron”), I am writing in support of DCN’s Wyoming Smart Capital Network and Red River Corridor Fund proposals in support of lending and investing in Wyoming and North Dakota small businesses. For over 20 years, Cimarron has designed, built and managed effective, results-driven regional private equity programs and specialty funds. Our team has advised more than twenty states and regional organizations on program and policy design. Cimarron’s team draws on deep skills and experience. Our eight investment professionals have over 120 years investing in funds, investing in companies, and supporting entrepreneurs. We provide leadership to our industry, helping found trade associations, training programs, and research initiatives that advance the knowledge of venture investing, business building, and the prudent use of public funds where programs are expressly designed to protect regions from fraud, waste, and abuse. We are pioneers, often working in regions of the country most in need of venture capital resources. We innovate to solve problems, and create new models that are often replicated by others. Cimarron maintains a database of hundreds of investors accessible by preference of sector, stage and geography, and can identify funds that are currently investing. For these projects, Cimarron’s database of resources will be made available through DCN to the Wyoming Smart Capital Network and Red River Corridor Fund at no cost. We anticipate the organizations may tap this resource when an angel fund in the region is searching for a venture investor with unique preferences or skills. We strongly support funding for these important initiatives and look forward to contributing Cimarron’s capabilities to meet the needs of Wyoming and North Dakota entrepreneurs. Sincerely, Michael A. Tharp, CFA Founder and Managing Director