Return Fund

INDIANA ECONOMIC DEVELOPMENT CORPORATION

RETURN FUND

EXECUTIVE SUMMARY OF INVESTMENT POLICY

 Focused on investments at Series A and beyond.

PURPOSE

This executive summary of investment policy specifically applies to the Return Fund, which has been established to invest, hold, and account for funds collected as distributions from all direct investments made by the State of Indiana managed by Elevate Ventures, Inc. (“Elevate Ventures”) through its subsidiary Elevate Advisors LLC (“Elevate Advisors”) to foster and promote the development of entrepreneurs and emerging companies within the State of Indiana.

DEFINITIONS

Headquarters – means having the North American Principal Office Address located in Indiana per the Indiana Secretary of State Business Registration Filing and at least one C-Suite position residing in Indiana.

Significant Presence – means at least one (1) physical office and one (1) full-time employee within the geographic borders of the State of Indiana and conducting a significant portion of its operations within the State of Indiana as determined by Elevate Advisors; or at the time of initial investment, have a clear plan to use the Return Fund investment to create a significant presence in the State of Indiana as a result of the investment.

INVESTMENT CRITERIA

1. Total investment by the Return Fund in any one Investee shall not exceed eight million dollars ($8,000,000) or twenty percent (20%) of the Fund, whichever is less.
2. Round size cannot exceed $25,000,000.
3. Each Return Fund investment shall be made on substantially similar terms as those offered to other private investors in the round.
4. Each Return Fund portfolio company investee shall be required to provide quarterly business updates.
5. The Return Fund may have a preference for considering portfolio companies of other IEDC funds managed by Elevate Ventures.
6. Each Return Fund investment shall be made into a business that:
   • its Headquarters in the State of Indiana; or
   • committed to, or be in the process of, initiating, or expanding its operations to have a Significant Presence in the State of Indiana;
   • is primarily focused on:
     • a high-growth business model where venture funding is likely to benefit that growth;
     • the commercialization, transfer, and/or application of research and technology into marketable products; or
     • a business plan that is determined by Elevate Advisors to have significant potential to bring substantial capital into Indiana, create jobs, or diversify the business base of Indiana.
   • is an innovation-driven enterprise with a total addressable market of at least Five Hundred Million Dollars ($500,000,000);
   • is not primarily engaged in a business involving: real estate; real estate development; insurance; professional services provided by an accountant, a lawyer, or a physician; or oil and gas exploration.
7. The investment has been evaluated by Elevate Advisors and the IEDC to meet or exceed its investment merit criteria
8. Each Return Fund investment is required to be syndicated with other capital sources on a minimum 1:1 basis.
9. The investment may start with a ratio of private investment to Return Fund investment of no more than 0.50:1 and has a reasonable expectation, when considering follow-on investments, to result in a higher ratio of awarded funds to new private, non-governmental capital from the time of the investment

PROHIBITED USE OF FUNDS

Return Fund is prohibited from making investments to:

• Finance a non-business purpose;
• Refinance existing debt where the lender is in a position to sustain a loss and the investment would take over that loss through financing;
• Effect a change that will not benefit the business;
• Repay delinquent state or federal withholding taxes or other funds that should be held in trust or escrow;
• Fund employee stock options (ESOPs).

INELIGIBLE RECIPIENTS

The Return Fund is prohibited from investing in or lending to the following businesses:

• Real estate investment firms, when the real property will be held for investment purposes
• Firms involved in speculative activities that develop profits from fluctuations in price rather than through normal course of trade
• Firms involved in lending activities, such as banks, finance companies, factors, leasing companies, insurance companies (but excluding agents of insurance companies), and any other firm whose stock in trade is money
• Pyramid sales plans, where a participant’s primary incentive is based on the sales made by an ever-increasing number of participants
• Firms engaged in activities that are prohibited by federal law or applicable law in the jurisdiction where the business is located or conducted
• Gambling activities, including any business whose principal activity is gambling.
• Charitable, religious, or other nonprofit or eleemosynary institutions, government-owned corporations, consumer and marketing cooperatives, and churches and organizations promoting religious objectives.