Letter to Mr. Ken Adams, President and Chief Executive Officer Designate of Empire State Development Corporation - Support of Application to Innovate NY Fund

Letter

Dear Mr. Adams,

I am writing in strong support of Excell Partners' application to the Innovate NY Fund. This funding is critical to strengthening Excell's ability to harness the innovations emerging from local research institutions and turn those breakthroughs into new cutting edge companies that will grow throughout New York.

I was proud to play an instrumental role in getting the Senate to pass the Small Business Jobs Act in late 2010 which as you know provided New York State with over $55 million, a portion of which is being used to fund the Innovate NY program. In addition to the tax cuts for small businesses, incentives for small businesses to make capital investments, and an extension of successful SBA programs that were included in this bill, the Small Business Jobs Act enabled the Innovate NY Fund to invest $26 million in organizations like Excell Partners which will in turn invest in new start-up companies.

A recent study conducted by the Economic Development Administration ranked innovation in Upstate New York lagging behind the national average and that ten "investable" deals per year do not get funded due to a lack of available capital. That is particularly concerning considering new research that shows start-up companies are the lifeblood of an economy and are responsible for all net new jobs. Therefore, regions that suffer from a lack of investment capital will also suffer from slow or negative job creation and all too often, companies that should be developing in New York instead migrate to other regions where venture capital is more prevalent and accessible.

Excell Partner's proposal aims to address this available lack of sufficient early-stage investment and help commercialize emerging technologies that are often left lurking in the early stages of what many investors know as the "Valley of Death." Excell has a strong proven track record of leveraging available resources to drive the development of new high technology companies. As a not-for-profit New York State-supported pre-seed and seed fund started in 2005, Excell has funded 22 high technology, seed-stage companies from university and research institutions in the Finger Lakes, Southern Tier, Central New York and Western New York. These companies have been in diverse industries as biotechnology, medical devices, industrial/energy, electronics and instrumentation, and consumer products. These start-ups employ 207 FTEs at an average salary of $70,000 per employee and have secured over $90 million in follow-on funding -- leveraging Excell's and public support by more than 35:1.

With this award, Excell Partners is positioned to strengthen its record in harnessing promising technologies and accelerating the creation of new technology-based businesses that offer high potential for commercial success. In addition to helping provide the financing necessary to launch these companies, funding would help Excell's efforts to provide new companies with the critical services, mentoring, and follow-on capital they need to become self-sustaining businesses.

Moreover, Excell has established cross-regional collaborations that bring together the major sources of innovation and deal-flow in these regions, such as the cutting-edge University labs across Upstate New York, many of whom constitute Excell's board of directors. Excell has also established close working relationships with the technology commercialization infrastructure in Upstate NY, including regional incubators, Centers of Excellence, Regional Technology Development Centers, and Centers of Advanced Technology -- leveraging the regional resources for improved due-diligence and enhanced mentoring and support. Excell's ability to bring together these cross-regional resources plays a key role in enhancing collaborations with other sources of risk capital across the region, such as angel groups and later-stage venture capital funds. Excell is an innovation force for Upstate and, along with other collaborative efforts, is leading the charge to grow jobs for the State.

With the support of the Innovate NY Fund, Excell is uniquely poised to take seed stage funding to the next level in Upstate New York and build upon their successes. I strongly urge your support for Excell's application.

Sincerely,

Charles E. Schumer

United States Senator

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