What they did discuss was how to handle the available $6.7 million that isn’t getting claimed from the most recent round of competition. Two more companies, Avidimer Therapeutics and Accuri Cytometers joined Cielo Med Solutions in not agreeing or unable to take the loans awarded. So the next two companies that had a tie score that just missed the cut are now eligible to step up and accept an award. Fisher Coach and Incept Biosystems are now going through due diligence and will probably sign notes totaling $3.875 million.
So what to do with the remaining $2,849,916. They can’t go to the companies with the next best scores. There are four of them and their combined ask is over $7 million. There was concensus that dividing the dollars up evenly among the four was not a good idea. What they did was ask the MEDC staff to do some investigation of the circumstances of those four companies today versus when they originally applied, nearly nine months ago.

One other action item on the agenda was the approval of the RFP for a $6.8 million award to a pre-seed fund. Applications will be due in February and the award in April.

Hopefully there will be a 2009 competition and it will come soon. Stay tuned.

SEIC Board and 21CJF Competition
Minutes and meeting dates for SEIC and info about 21CJF

Accuri Cytometers
website for Accuri

Ciello Med Solutions
web site for Cielo

Fisher Coachworks
website for Fisher Coachworks

Avidimer Therapeutics
website for Avidimer

Incept Biosystems
website for Incept Bio

Have you read the FAQ regarding the 21st Century Jobs Fund competition recently?  Here’s the link: http://ref.themedc.org/cm/attach/18efd0c7-95d3-4a2f-89e4-cae672d8ecd2/20080428_FAQs.pdf

Here are some highlights that shed more light on  the RFP.

You already know there will be 2 types of loans, a straight loan and a convertible note.  Which will apply to you?  The MEDC says this will be negotiated with the SEIC Board.  Actually it will be negotiated with a MEDC person first since they bring recommendations to the SEIC Board or designated committee.  The key takeaway here is that it can be negotiated and if you want a straight loan be prepared to make a strong case for it because they would probably prefer the convertible note.

Here’s a biggy change in my opinion.  You are required to provide a 3 year projection of your balance sheet, income statement and cash flow.  The question was if they could all be put on one page.  The answer was 3 pages.  The big change is that these 3 pages are to be in your business plan and are included in your 25 page limit.  That means your business plan is really only 22 pages. For some of you this could be tough. If you are creative maybe you can put these forecasts on fewer than 3 pages but remember the minimum size font is 10.

Their definition of Indirect Jobs is much more clear.  This is a soft number that you can estimate.  How much space you use to explain this number is directly related to how important it is to sell your application.  If the manufacturer you engage to build your widget has to hire 100 people then it’s a big deal and you should explain how you got that number.  If you aren’t creating many indirect jobs then don’t waste a lot of time on it. Remember, 1099 employees are counted in your FTE count of your company.

More about the loans, they say repeatedly that the loan documents are still being created but will be on the web site as soon as approved by the SEIC Board.  Hopefully that will happen at their next meeting in early May. One very important clarification the MEDC has now made is that the loan will be collatoralized, and assets secured with this state loan will be first priority secured.

There is a lot more in the FAQ and we encourage you to check it out. We also encourage you to ask more questions, and sooner than later.

Give us a call if you want to discuss any of these issues further.

The SEIC Board met on April 9, 2008 to approve the RFP for the next round of the 21st Century Jobs Fund, officially launching the competition for $30 million to be loaned to technology companies in Michigan.  There was discussion about the RFP and the competion, and the RFP for peer review organizations to judge the competition.

Our friend David Havilland with Shepherd Advisors was there and has summarized those discussions and added his take on the situation.  Here’s the link to his blog: http://mi21cjf.proboards100.com/index.cgi?board=306news&action=display&thread=40

He also has some commentary about the notes the MSF Board will provide for the winners in this competition. He provides a summary of the types of loans issued the last time around.

Check it out.

David Havilland’s post on the SEIC meeting 4/9/08
Summary of the conversation at the meeting