CIT Annual Report 2011

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GROWING THE INNOVATION ECONOMY

2011 ANNUAL REPOR


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1 CIT 2011 ANNUAL REPORT


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MESSAGE FROM THE PRESIDENT AND CEO

Pete JobsePresident & CEO

Center for Innovative Technology

One of my favorite pastimes is watching good movies.

This summer, I had the pleasure of watching Moneyball,

the story of Oakland As General Manager Billy Beane,

who revolutionized baseball with his groundbreaking

method of building teams. Beane had to innovate. He

couldnt compete in a league with wealthier teams that

could recruit star players with high salaries, so Beane

used a new analytical tool called sabermetrics to recruit

players that other teams often overlooked, and in doing

so, built winning teams.

Billy Beane was an innovator, and his story is a lesson

for anyone who wants to succeed in todays economy.

With the global economic challenges still before us, we

have to explore new ways to create an ecosystem that

allows entrepreneurs to build companies and create jobs.

I talk a lot about innovation. It is my passion. As I was

drafting this message, I found a quote about innovation

by noted economist Theodore Levitt, who popularized the

term globalization. He said, Creativity is thinking up new

things. Innovation is doing new things.

I thought that distinction described very well what

we do at CIT. We champion innovation. We do new

things. Since 1985, we have made innovation happen by

creating a collaborative ecosystem comprised of industry,

universities and government leaders who commercialize

research, build new companies and create new jobs, nd

new ways to manage systems and assist people across

the Commonwealth gain the basic and necessary tools to

build innovative communities that will compete today and

in the future.

While we are proud of all of our accomplishments

over the last 26 years, we take great pleasure in the

work we have done this past year. Working with the

McDonnell Administration and the General Assembly,

we succeeded in garnering additional reforms and

investments that strengthen our innovation ecosystem.

These initiatives help us accelerate the efforts we have

made to plug the innovation gaps in commercialization

and seed-stage funding not currently being lled alone

by the private sector. While we applaud efforts to recruit

new, established companies to Virginia, we also believe

that we need to help researchers and entrepreneurs grow

them organically here if we want to successfully build a

new innovation economy in the Commonwealth.

We have also carried out other initiatives in cyber

security, education reforms, modeling and simulation,

electronic medical records and commercial space

ight that will strengthen Virginias position in the new

innovation economy.

I hope you enjoy reading this 2011 Annual Report.

When you nish, if you have not done so, I encourage

you to take the time to watch Moneyball. Not only is

it an entertaining movie, but it will inspire you to think

differently, to reach high and to innovate!


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CIT ENTREPRENEUR

Access to Capital

CIT knows that access to early-stage capital is acritical need of many emerging technology companies.

We provide that access through CIT GAP Funds and

CITs Federal Funding Assistance Program.

CIT GAP Funds makes seed-stage equity

investments in Virginia technology, energy and

life science companies with a high potential for

achieving rapid growth and generating signicant

economic outcomes for entrepreneurs, investors

and the Commonwealth of Virginia.

CIT GAP Funds draws on its private sector

Investment Advisory Board (IAB) to assist in

making investment decisions. Consisting of three

investment committees with expertise in CITs

primary areas of investment interest the IAB is

made up of leading entrepreneurs, angel investors,

venture capital funds and corporate strategic

partners from the Mid-Atlantic region and across

the country. Since 2005, CIT GAP Funds has

invested $5.4 million in 56 companies, attracting anadditional $77.81 million in private equity for a 14:4

private:public dollar leverage factor. In 2011, CIT

GAP Funds invested in six new companies.

CITsFederal Funding Assistance Program identies

and accelerates opportunities for Virginias small

technology businesses to obtain federal funding from

the SBIR, STTR and other government researchprograms. Once again, as the Commonwealths

designated ofce, CIT was awarded a $100,000

Small Business Administration contract for statewide

SBIR education and support services, facilitating 13

statewide events and 11 training webinars for 310

Virginia-based entrepreneurs. Because of CITs

work in this area, small businesses secured 429

SBIR/STTR awards totaling $124 million (Source:

SBIR Tech-Net).

With capital markets still frozen, CIT Entrepreneur

provides valuable funding opportunities for Virginias

high-growth, early-stage companies that will create

sustainable job growth in the new innovation economy.
http://www.citgapfunds.org/http://www.cit.org/programs/cit-entrepreneur/federal-funding-assistance-programhttp://www.cit.org/programs/cit-entrepreneur/federal-funding-assistance-programhttp://web.sba.gov/tech-net/public/dsp_search.cfmhttp://web.sba.gov/tech-net/public/dsp_search.cfmhttp://www.cit.org/programs/cit-entrepreneur/federal-funding-assistance-programhttp://www.citgapfunds.org/


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CIT R&D

Commercializing Research

CIT facilitates commercialization of Commonwealthresearch and brings together public and private

sector teams to develop and deploy solutions to

address regional and national challenges and

produce innovative and marketable solutions. The CIT

R&D team accomplishes these tasks with strategic

investments and by identifying opportunities, building

competent and capable teams, and managing these

teams as they design and implement solutions.

CIT R&D manages the Commonwealth Research

Commercialization Fund (CRCF), which invests in

research and commercialization at Virginia colleges

and universities, companies, political subdivisions and

federal labs and other research institutions in their efforts

to advance technology and drive economic growth

in the Commonwealth. In 2011, the CRCF made 29

awards totaling $3.6 million to spark commercialization

and company formation in Virginia. Of that amount,

$799,032 was awarded within the SBIR Matching

Funds Program; $716,872 was awarded within the

Matching Funds Program; $250,000 awarded within

the Eminent Research Recruitment Program; and

$500,000 allocated to the Facilities Enhancement

Loan Program. Additional awards will be made in June

2012.

Closely aligned with the CRCF is the Commonwealth

Research and Technology Strategic Roadmap, a

strategic planning tool that identifes key industry sectorswith commercial promise and worthy of institutional

focus and economic development for Virginia.

CIT R&D also develops and executes federally-

funded research programs targeting the areas of

defense and national security, energy and marine

sciences, including:

Mid-Atlantic Regional Association Coastal

Ocean Observing System (MARACOOS), to

improve maritime safety and provide data andforecasts for the recreational, commercial and

shery management communities;

Mine Safety, to prevent mine disasters and

protect miners and emergency personnel if

incidents occur, using wireless and sensor

technologies; and

Vessel Tracking, to advance and demonstrate

vessel detection technology in support of federal

initiatives to detect and track approachingvessels off the Virginia coastline.

In each of these areas, CIT continues to build

partnerships with industry and universities to identify

new strategic opportunities that require investments

in research and commercialization initiatives that

build companies and create jobs.
http://www.cit.org/programs/cit-rdhttp://www.cit.org/programs/cit-rdhttp://www.cit.org/programs/cit-rd/crcfhttp://www.cit.org/programs/cit-rd/crcfhttp://www.cit.org/programs/cit-rd/roadmaphttp://www.cit.org/programs/cit-rd/roadmaphttp://www.cit.org/sites/default/files/file/Release%20-%20MARACOOS%20-%20FINAL.pdfhttp://www.cit.org/sites/default/files/file/Release%20-%20MARACOOS%20-%20FINAL.pdfhttp://www.cit.org/sites/default/files/file/FINAL%20-%20Mine%20Safety%20II(1).pdfhttp://www.cit.org/sites/default/files/file/FINAL%20-%20VesselTracking.pdfhttp://www.cit.org/sites/default/files/file/FINAL%20-%20VesselTracking.pdfhttp://www.cit.org/sites/default/files/file/FINAL%20-%20Mine%20Safety%20II(1).pdfhttp://www.cit.org/sites/default/files/file/Release%20-%20MARACOOS%20-%20FINAL.pdfhttp://www.cit.org/sites/default/files/file/Release%20-%20MARACOOS%20-%20FINAL.pdfhttp://www.cit.org/programs/cit-rd/roadmaphttp://www.cit.org/programs/cit-rd/roadmaphttp://www.cit.org/programs/cit-rd/crcfhttp://www.cit.org/programs/cit-rd/crcfhttp://www.cit.org/programs/cit-rdhttp://www.cit.org/programs/cit-rd


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7CIT 2011 ANNUAL REPORT


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CIT CONNECT

Finding and Assimilating Innovation

CIT Connect is dedicated to helping federal, stateand corporate consumers of technology identify and

assimilate innovation. The Connect service delivers

unique and innovative value-add solutions enabling

technology consumption, adoption and integration

into organizations. The Connect service is based on

26 years of CIT experience delivering technology

identication and assimilation consulting services to

government agencies and private sector companies.

CIT Connects customers cover local, state, federal

and corporate consumers across a variety of

industries with emphasis in education, health IT and

mobile learning technologies.

In the eld of education, CIT experts are assisting

the Department of Education with innovations in

data governance and performance measures, and

are developing Apps4Virginia, a groundbreaking

application development competition. For Virginias

Community College System, Connect experts have

provided research and resources to support theWorkforce Investment Act.

To help lower costs and speed the delivery of health

care services, Connect experts continue to assist

the Virginia Health Quality Centre and Regional

Extension Centre implement the expansion of

electronic medical record. By increasing the

adoption of this technology among priority healthcare providers and obtaining Medical Use, advanced

health care will be available for patients residing in

remote areas of Virginia.

Finally, in the national security arena, CIT helped

inventory the Commonwealths cyber security

assets and continues to assist the Department of

Defense with its mobile learning project.

In all of these areas, CIT Connect offers a range

of customized services geared to maximizeorganizational efciencies and effectiveness and

streamline costs.
http://www.cit.org/programs/cit-connecthttp://www.apps4va.org/http://www.apps4va.org/http://www.cit.org/programs/cit-connect


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CIT Broadband is the only resource in theCommonwealth that offers a holistic supply and

demand approach to solving the broadband equation.

The current mission of CITs Broadband Program is

to accelerate the socio-economic growth of Virginias

rural and underserved areas through the application

and use of broadband telecommunications. This

bold mission emphasizes the idea that the true value

of broadband telecommunications infrastructure

is derived from the applications that traverse its

capacity, not the mere existence of the infrastructure.

The American Recovery and Reinvestment Act

(ARRA) provided funding to expand broadband

access in communities across the United States,

which will increase jobs, spur investments in

technology and infrastructure, and provide long-term

economic benets. CIT is Virginias designated entity

for ARRA mapping and planning activities. As such,

CIT was awarded $8.1 million for the mapping of

broadband availabilityand other initiatives, including:

Health IT Assessment, to gauge broadband

availability and usage at healthcare facilities

across the Commonwealth to develop a better

understanding of current connectivity across

the healthcare provider universe and to create a

link between broadband connection and health

IT implementation.

E-commerce Assessment, to conduct an annualassessment of how businesses, organizations

and individuals use and benet from broadband.

The e-commerce assessment also assesses

the impact of Virginia broadband investments,

identies gaps in broadband access and use

and identies the availability of necessary

broadband capacity, services and economic

growth support.

For the Commonwealth to truly be successful in

an increasingly global innovation economy, CIT

knows that it is critical that all our communities

have equal and affordable access to broadband

telecommunications.

CIT BROADBAND

New Infrastructure for the New Innovation Economy
http://www.cit.org/programs/cit-broadbandhttp://www.wired.virginia.gov/broadband_map.shtmlhttp://www.wired.virginia.gov/broadband_health_it.shtmlhttp://c/Documents%20and%20Settings/xca37547/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/ZPBW5QPD/Ecommerce%20Assessmenthttp://c/Documents%20and%20Settings/xca37547/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/ZPBW5QPD/Ecommerce%20Assessmenthttp://c/Documents%20and%20Settings/xca37547/Local%20Settings/Temporary%20Internet%20Files/Content.Outlook/ZPBW5QPD/Ecommerce%20Assessmenthttp://www.wired.virginia.gov/broadband_health_it.shtmlhttp://www.wired.virginia.gov/broadband_map.shtmlhttp://www.cit.org/programs/cit-broadband


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MOVING FORWARD

When people talk about innovation in Virginia,

they point to CIT. True to our mission, we have

established a record of accelerating innovation

and technology-based economic development

strategies. We have helped build research and

development capabilities at our universities,

invested in emerging technology clusters and

created technology councils across Virginia.

Today, we are planting the seeds for the new

innovation economy with advancements

in commercialization activities and helping

entrepreneurs who have ground-breaking

ideas and plans nd access to capital. We

are helping government agencies and

private sector partners nd new, efcient

and innovative ways to do business. And

we continue to be the leader in broadband

deployment across the Commonwealth that

will give every community access to new

economic opportunities.

As we continue our work today, we are

advancing initiatives in cyber security,

electronic medical records, modeling and

simulation, education reforms and commercial

space ight to strengthen Virginias position in

these areas going forward.

For over 26 years, we have been Virginias

recognized leader in advancing innovation

through public-private partnerships that

unleash the vibrant entrepreneurial spirit that

has made Virginia an economic force today

and for tomorrow. At CIT, we not only think

about the future, we create it.


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BOARD OF DIRECTORS

As of January 3, 2012

OFFICERS

OFFICERS AND DIRECTORS

Ted Cahall

Corporate Vice President, Microsoft

Jim Cheng

Secretary of Commerce and Trade,

Commonwealth of Virginia

Jim Duffey

Secretary of Technology,Commonwealth of Virginia

Laura Fornash

Secretary of Education,

Commonwealth of Virginia

Eric Hansen

CEO, President and Co-Founder,

Innovative Wireless Technologies, Inc.

Wayne Hunter

Managing Partner,Harbert Venture Partners

Terry Hsaio

Founding CEO, Hook Mobile

Dr. Ray O. Johnson, Sr.

Senior Vice President and CTO,

Lockheed Martin Corporation

Hooks Johnston

General Partner, Valhalla Partners

Suzanne H. King

Partner, New Enterprise Associates

Dr. Alan Merten

President, George Mason University

Dr. Michael Rao

President, Virginia Commonwealth

University

Dr. Charles W. Steger

President, Virginia Polytechnic Institute

and State University

David C. Lucien

Chairman

Joseph P. Doherty, Jr.

Vice-Chairman

Peter J. Jobse

President and CEO, CIT

Linda E. Gentry

Treasurer and Secretary, CIT


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