Questions and Answers

1. What licenses are they referring to? No licenses required to run a VC firm - Provide Delaware license(s) and/or certification(s) necessary to perform services as identified in the scope of work.

A: Please see Section V, G, 5 of the RFP at Page 19. To the extent this question seeks legal advice about whether or not a license is required, please consult the legal counsel of your choice prior to submitting a proposal.

2. Do I have to be incorporated to apply for RFP? Or can I incorporate later, if accepted?

A: Please see Section II of the RFP at Page 3: At a minimum, proposing parties will be required to meet the following conditions:

• Be incorporated or qualified to do business in Delaware as a higher education institution, non-profit organization, or private venture fund (as defined by the Securities and Exchange Commission). Individuals primarily responsible for providing management services to the Fund on behalf of the applicant must have an established business presence in Delaware and perform such services primarily from within Delaware.

Please also see Appendix B, 3 of the RFP at Page 44.

3. Seed program says target companies have 10 or less employees. Does that mean the VC program is to target companies with 10+ employees?

A: While there is no specific limitation in the RFP as described by the question, proposing parties are strongly advised to carefully review all federal guidance and requirements tied to the programs identified in the RFP. Strict compliance with those sources of legal authority will be material terms and conditions of any contract resulting from this procurement process.

4. Are you guys selecting only 1 VC fund for this program?

A: Please see Section IV,B, 17 of the RFP at Page 11. There is a possibility that more than one vendor will be selected for contract depending on the needs of the State and the qualities of the proposing parties.

5. What are the actual deliverable items you want to receive to apply? I know of the attachments that have to be completed but for the scope when describing the fund is that a Word document split into sections?

A: Please see Appendix A for the stated deliverables in the RFP. Additionally, part of the value of the services beings sought by the State in this procurement process are the proposing party’s skill in coming up with the best specific plan to achieve the results, services, and goals of the program. To that end, it is expected that proposing parties will apply their specific knowledge, training, and experience to offer innovative solutions and recommendations which best achieve the goals of the State as described in the RFP within the legal and regulatory parameters established by the federal government. With respect to how a proposing party chooses to submit information, the RFP does not specify any particular electronic format or program. Any commercially reasonable method to transmit electronic data which is capable of review and storage by the State will be acceptable for review and scoring.

6. The primary target investment sectors include biotech, life sciences, advanced materials, IT/enterprise tech, fintech, and agtech but can the funding be used outside of these categories? For example, consumer focus tech or consumer product goods?

A: The targeted investments for this program are Delaware-based companies in concept stage seeking to validate a new product or service with high-growth potential, including those with proprietary or protectable intellectual property in a large addressable market. There is a preference for programs that support startups in one or more of the state’s key industry sectors including biotech and life sciences, advanced materials, IT/enterprise tech, fintech, and agtech.

The use of the word “preference” in the referenced RFP section is intended to convey that other investment sectors may be considered in the sole discretion of the State of Delaware, but are not the focus of this program. Decisions about how such matters will be managed may be more fully explored during any potential contract negotiations. Proposals which do not focus on the specific sectors identified in the RFP may be considered non-responsive or receive lower scores.

7. If a Fund Manager receives SSBCI for their VC fund but then later also builds a tech startup. Could that same person raise capital for their tech startup from another VC fund manager that also received SSBCI funding but in this case used that funding for fund their tech startup?

A: The services being sought by the State in this RFP are focused on the industry sectors identified therein and require conflict of interest protocols that are compliant with State and Federal law. Selected fund managers shall not be permitted to leverage specific knowledge of the program for personal financial gain. Proposing parties that already have an intention to raise capital through this program should consult legal counsel for advice regarding compliance with these sources of legal authority. The State reserves the right to refuse to fund any project that fails to comply with the law or the terms of a contract.

8. Is their [sic] a scenario where a fund is asking for $1M but maybe funds are not or whatever reason - would you guys fund less or a complete decline?

A: Please see the answer to question # 6 above.

9. Attachment 7 which is referenced is not included in the document. It seems to be on reporting requirements, can you confirm this is not needed or is needed as part of the application or RFP response?

A: The reference to Attachment 7 was a scrivener’s error; there is no Attachment 7.

10. For clarity, only 60% of money needs to be invested in Delaware companies as specified in Appendix A? How does this align with Treasury’s guidance that all money either needs to be invested in state or the other money invested out of state must have a line of sight to benefits to the state of Delaware?

A. The figures referenced in this question are correct and free of typographical errors in the

RFP. Proposing parties are encouraged to seek the assistance of legal counsel when interpreting federal regulation and guidance regarding the subject matter of this RFP. Please see the answer to question # 5 above.

11. Is money invested in the fund from a non-profit organization considered “private sector capital” by the State of Delaware and this program?

A: Non-profit funds can be considered part of the private sector match as long as those funds are being used for investments in companies.

12. Can applicants request more than $7.5m if for different funds but run by the same firm/organization? That is can one firm qualify for the full $22.5m allocation if for 3 different funds?

A: Please see the answer to question # 5. Further, full compliance with federal regulation and guidance relating to the subject matter of this RFP will be made express and material terms and conditions of any contract arising out of this procurement process. The State reserves the right to reject non-conforming requests for funding or to reject requests or proposed distributions of funding that in the sole discretion of the State of Delaware are inconsistent with federal regulation or guidance or the State of Delaware’s goals in the federally compliant distribution of funds to qualifying recipients.

13. With Delaware Division of Small Business serving as an institutional Limited Partner, does the state expect returns of the fund to be given back to the State on exit and/or distributions or can the proceeds (returns/gains) be reinvested in other companies on an evergreen basis?

A: The State expects returns to be managed as set forth in any eventual contract arising out of this RFP. Without waiving any other position on this subject, the State of Delaware does not presently intend for this program to result in a revolving fund or other similar structure that lacks any finite program termination date. Please also see the answer to question # 5 above.

14. The SSBCI guidelines refer to Incubation and Early-Stage Investment Models. Under both models, “qualifying investment” is defined as “…the first SSBCI investment in a company, raising early-stage capital, p to $125,000 per company (with a maximum round of $375,000)…”. Would you please clarify which level is accurate for DE’s early-stage venture capital program.

A: The State acknowledges that proposing parties may be confused by the RFP’s reference to “early stage” programs. Please see Appendix A, 1 of the RFP at Page 42: This program is meant to support companies in seed and early stages of investments in rounds ranging from $500,000 to $5 million and typically syndicated with other investors.

15. The SSBCI guidelines require jurisdictions to use at least 90% of its capital for small businesses located within the jurisdiction. Given this requirement, we question the rationale for a lower target in the Early Stage VC program. The SSBCI program is an opportunity for DE to encourage the availability of early-stage venture capital for Delaware-based companies. The availability of local capital for companies seeded in DE will help avoid their moving out of state to secure growth capital as they begin to gain traction. The availability of a full continuum of risk capital in DE to support is early stage enterprises will help insure that DE captures the full benefits of its investment in its earliest funded enterprises, after it has helped to de-risk the enterprise and ready it for significant growth.

A: Proposing parties are encouraged to seek the assistance of legal counsel when interpreting federal regulation and guidance regarding the subject matter of this RFP. Please see the answer to question # 5 above.

16. “Private financing” as defined in the SSBCI regulations does not exclude private not-for-profit entities. Please confirm that non-federal match from private, not for profit entities qualifies as private sector capital under DE’s match requirement.

A: Non-profit funds can be considered part of the private sector match as long as those funds are being used for investments in companies.

17. There is flexibility in the federal guidelines to enable qualifying, early-stage investment entities to invest SSBCI funds via legal models other than venture capital limited partnerships. For example, qualified, jurisdiction-sponsored non- profits have invested SSBCI funds via a direct contract with their state’s treasury. Is some form of this approach an option in DE? The RFP refers to the Delaware Division of Small Business as “…serving as a Limited Partner” but also asks for information about a Board of Directors, not typical in Limited Partnerships. Does this imply that DDSB’s role need not be as a legally constructed Limited Partner in a separately formed limited partnership, but can be construed as a “limited partner” as a result of its capital commitment, via a contract for services with the qualified jurisdiction sponsored non-profit?

A: Delaware does not have a jurisdiction-sponsored non-profit entity in the program.

18. Jurisdiction non-profits are established expressly for the purpose of achieving a public policy objective. The ability to re-invest returns from these pre-seed/seed investments, in accordance with program guidelines, fosters the growth of a stronger innovation ecosystem. Is the creation of an ever-green model an acceptable approach?

A: Delaware does not have a jurisdiction-sponsored non-profit entity in the program.

19. Is it possible for two fund managers of either of the SSBCI fund programs to invest/support the same enterprise.

A: Yes, but as a reminder in this scenario the SSBCI funds could not count for leverage and the private capital cannot be double counted. Both SSBCI investments would also need to meet all other SSBCI requirements, including the $20 million restriction and conflict-of-interest standards for venture capital programs.