This annual report summarizes the activities of the Flagship Enterprise Center (FEC) for the 2010 fiscal year. The FEC is a business incubator and accelerator located in Anderson, Indiana that provides services to startup businesses to help them grow. In the past year, the FEC engaged with 85 client companies, provided over 1700 hours of student training, and helped clients create 79 new jobs despite economic challenges. The FEC also assisted clients in raising $34.7 million in capital for the local economy. Looking forward, the FEC is constructing an new 80,000 square foot accelerator building and a 3,200 square foot lab addition to expand its facilities and programs.

1. Annual
Report
FY2010

2. Welcome:
With this report, we celebrate another year of one of the most effective economic
development projects in the region. A partnership, born of the need to find a future in
a changing economy, brought together the vision and management of Anderson
University, an independent college with an outstanding business school, and the
administrative leadership of our city. What resulted was the Flagship Enterprise Center
(FEC), one of the most effective business incubators in our state, drawing significant
support from federal and state governmental partners. The FEC has provided the
necessary support to start and grow numerous small businesses that in turn have
added many badly-needed jobs to the local economy.
The added benefit in this dramatic engagement is an immersive experience through
internships and service learning projects. Student leaders are finding their future
through this effort, and the future is bright both for them and for the region.
We are indebted to so many for the progress we can report. FEC has had exceptional
leadership from CEO Chuck Staley. The services of the staff and each member of the
FEC Board and the Chair Jim Ault, are a significant part of this story of remarkable
development. Our legislative servants in local, state and federal arenas have made
great contributions to the partnership. We are especially indebted to the faculty and
students of Falls School of Business at Anderson University, to Dean Terry Truitt, and to
all who have guided this project to the promise we know today.
On behalf of Anderson University, our board of trustees, and all who see the benefits
of new business development, jobs added to the local economy, and students
mentored toward such a promising future, we offer the pages that will follow. What
has been achieved in the past gives us hope for a dynamic future.
James L. Edwards
James L. Edwards
President, Anderson University

3. TABLE OF CONTENTS
Mission and History 3
Year at a Glance 4
Challenges 5
Performance 6-7
Annual Payroll 8
Capital Raised 9
Rents and Services Income 10
Financial Statements 11
Anderson Business Incubator 12
New Construction 13
Client Headlines 14
Flagship Accelerator Building 15
New Programs and Initiatives 16
Challenges 17
Looking Ahead 18 – 19
FEC Board of Directors 20

4. Our Mission
To be a premier technological
Business incubator creating new
jobs and contributing to the long-
term economic development of
the communities of Anderson,
Madison County and the state of
Indiana by encouraging and
nurturing the entrepreneurial
spirit in communities and by
providing mentoring, networking,
business services, educational
opportunities and access to Our History
capital.
Created through a partnership between
Anderson University and the City of
Anderson, the Flagship Enterprise Center
(FEC) serves as a new business incubator
and growth stage business accelerator.
Through its client-specific Client Support
Program, the FEC helps emerging
companies become independently viable.
Located at I-69 and Martin Luther King
Blvd. (exit 22) in Anderson, the FEC
provides ongoing contact with
management consultants, university
researchers, student mentoring programs
and access to capital. The FEC and its
partners seek to encourage and nurture
the entrepreneurial spirit within the
community. The Flagship Enterprise
Center is both an educational and
technological incubator helping
businesses develop and transition their
technologies into real world applications
and products in global markets. The FEC is
one of the largest such centers in Indiana.

5. YEAR AT A GLANCE
•Number of Training Events 21
•Number of people trained 400
•Student training hours provided 1768
•Total clients engaged 85
•Clients currently being served 32
•New clients for CY 2009 16
•New client growth for 2008
and 2009 combined 125%
•Cumulative jobs through 2009 850
•New jobs for CY 2009 79
•Client Payroll for CY 2009 $18.6M
•Average client wage vs. average
county wage 177%
•Client Capital raised for 2009 $ 34.7M
•Total direct economic effect of
incubator for CY 2009 $53.3M

6. The recent economic history of Madison County is well
known, and so will not be repeated here. However, there is
merit in taking stock of our current situation, and using that as
a baseline for moving forward.
Unemployment remains stubbornly high in Madison
Challenges
County. Of course, the recession has not helped, but our area
remains more severely affected than several surrounding
counties, the state as a whole, and the nation.
Unemployment Rates - 2009
15.0%
12.0%
9.0%
6.0%
3.0%
0.0%
Wage Rates, for those who have jobs, remain
inordinately low as compared to nearly all our neighboring
counties, the state and the nation as well. You can see from
the chart below that only one county (Henry) in central Indiana
has wage rates slightly lower than those in Madison County.
Average Annual Wage - 2009
$50,000
$40,000
$30,000
$20,000
$10,000
$0

7. Performance
Community Outreach – Training
From its inception, FEC has recognized a need to assist our community,
not only by helping to create jobs, but also to be a real factor in a re-
emergence of the overall community economically. FEC has continued to
expand its outreach to the community. We have expanded our training
offerings, bringing the total number of training events to 21 for FY 2010.
By doing that and enlisting knowledgeable, well-known speakers and
facilitators, we have been able to reach almost 400 people during the
2010 fiscal year. Some of the attendees are clients, but most are other
small business people in the community. Evaluation surveys are
collected at every event, giving us the opportunity to improve our
offerings significantly over time.
New Business – Clients Engaged
Our growth in total clients engaged continued through this past year, and
we have now reached 85. As you can see from the chart below, this
involved a near-doubling from 2006 to 2007, and another doubling from
2007 to 2009 calendar years. For the past twenty four months, we have
averaged almost two new clients every month. At the same time, we
have dramatically increased the services offered to every client, so that
the total staff workload has been increased significantly.
90 85
80 Clients Engaged 69
70
60
50 40
40
30 15 21
20
10
0
2005 2006 2007 2008 2009

8. Performance - Continued
Jobs Created
We understand that the FEC does not create jobs; businesses do.
We are, however, very proud to speak of those jobs that our clients have
created, because they are significant contributors to our economy. As we
all struggled through the deep trough of the recession, FEC clients
continued to expand overall, and create an additional 79 jobs this past
calendar year. While that is the smallest year-to-year gain in the past five
years, it is nevertheless a gain, when the rest of our economy was
suffering through large losses. These jobs are all the more important
because the Madison County unemployment rate continues to lag behind
Indiana and the nation. As of April 2010, unemployment in Madison
County stood at 10.7%, while Indiana and the nation stood at 9.8%*.
Jobs – Full-Time Equivalents Cumulative
850
900 771
800
700 576
600
500
400
300 171
200 73
100
0
2005 2006 2007 2008 2009
Calendar Year
http://www.bls.gov/ro5/qcewin.htm
http://www.bls.gov/bls/unemployment.htm

9. Annual Payroll
The economic effect of jobs amounts to more than just the number of jobs, of
course. The payroll that is generated adds to economic activity, and multiplies
as the money is exchanged in the local economy. In spite of the ongoing
recession in 2009 and 2010, FEC clients were able to report an increase in
annual payroll to $18,637,062, a very significant increase.
One of the most meaningful statistics in measuring economic effect is the
average annual wage. For Madison County in April, 2009, the average annual
wage was $29,700. FEC clients were instrumental in raising the bar as they
reported an average annual wage of $52,499.
Annual Payroll – FEC Clients
$20,000,000 $18,637,062
$15,000,000
$11,573,754
$10,000,000
$3,952,930
$5,000,000 $1,341,967
$293,291
$0
2005 2006 2007 2008 2009
Calendar Year

10. Capital Raised - Flagship Clients
$34.707
$35 $26.974
$30
$25
$ Million
$20
$15
$5.264
$10 $2.221
$5 $0.341
$0
2005 2006 2007 2008 2009
Calendar Year
Another extremely important aspect of the economic effect brought to us by our
clients is the amount of capital they raise, and thus bring in to the local
economy. This capital comes in three forms: debt, equity and grants. By far the
largest capital contributor among these is in the form of grants, either federal or
state. This capital is very important to our economy because it comes from
outside the area, and constitutes a fresh infusion of economic vitality.
FEC is very active in assisting our clients in their efforts to obtain grants. As can
be readily determined from the chart above, the last two years have been
especially fruitful for us in this regard. For Calendar Years 2008 and 2009
together, we have brought over $61 million into the community.
In addition to the above, the Flagship Enterprise Center itself has raised grant
money to continue operations, and also to expand by building additional
business incubator and accelerator space. Grants totaling $3.455 million have
been obtained from the Economic Development Administration to build a new
80,000 ft2 accelerator building, and a 3,500 ft2 addition to our current incubator
building.

11. Rents and Services Income
One of the more important aspects of managing a business
incubator is ensuring that the operation is economically
sustainable. Although the FEC receives a significant amount of
assistance from several sources, we need to supplement that with
income received from rents and services. We are very cognizant
of the fact that our services must offer real value to our clients, so
we have spent a good deal of effort in polling and surveying our
client base to determine their needs and wants.
As a result of that effort, we have partnered with the Anderson
University School of Adult Learning, SCORE, SBDC, and several for-
profit companies to bring a long list of topics to our training
calendar.
Rents and Services Revenue Growth
1,000
800
$000
600
400
200
0
2005 2006 2007 2008 2009 2010
Fiscal Year

12. Financial Statements
Income Statement 2010 2009 2008
Gifts and Grants 268,240 605,350 300,000
Rents and Recoveries 826,065 639,816 427,187
Other Income 13,624 11,188 28,497
Total Operating Income 1,107,930 1,256,354 755,684
Program Expense 254,303 376,517 443,553
Administrative Expense 168,370 125,240 123,224
Fund-Raising Expense 121,536 116,516 113,425
Building Operation 518,191 513,606 515,230
Expense
Total Operating Expense 1,062,399 1,131,879 1,195,432
Net Operating Surplus / Loss 45,531 124,475 -439,748
Extraordinary Income 326,160 671,005
Extraordinary Expense (99,893)
Change in Net Assets 450,635 131,364
Balance Sheet 2010 2009 2008
Cash and Cash Equivalents 790,488 $ 729,599 $ 611,919
Other Current Assets 264,058 349,943 540,511
Land 559,121 293,608 293,608
Buildings and Equipment 3,511,837 3,332,739 3,050,122
Total Assets 5,125,504 4,705,889 4,496,160
Current Liabilities 311,886 89,582 187,292
Long-Term Liabilities 2,205,730 2,053,950 2,197,146
Net Assets (Worth) 2,607,888 2,562,357 2,111,722
Total Liabilities and Net
5,125,504 4,705,889 4,496,160
Assets

13. This year brought a number of Each partner provides value to the ABI:
changes to the Anderson
Business Incubator. With a • City of Anderson – Funding for reduced
tightening budget, the ABI had rent program
to change it’s business model. • FEC – Management of ABI and client
With the help of Dr. Terry Truitt, services
Dean of AU’s Falls School of • AU Falls School of Business – Student
Business, a new model was interns and business consulting on a project
developed. Now that the ABI is basis
considered more of a program, • Local Property Owners – Provide local
than a physical location, growth retail space in Anderson
for the program is limitless.
Currently there are 6 ABI clients
located in the PNC Bank Local
building at 931 Meridian Plaza, Space
in downtown Anderson.
Current ABI clients include: AU Falls
ABI City of
School of
Program Anderson
• Anderson Black Expo Business
• GG Enterprizes
• Madison County Firefighters Foundation
• Mobile Seamstress
• The Character and Self-Esteem Institute FEC
• WATN Enterprises

14. The past year has been an exciting one
at the Flagship. We announced, and
began the construction of two new New Construction
buildings, both scheduled for
completion in the second half of 2010.
Flagship Accelerator Building
The Flagship Accelerator Building will
be an 80,000 square foot multi-tenant
business/industrial facility similar to
the FEC’s existing Energy Systems
Center. The new Accelerator Building
was made possible through a $2.7
million grant from the U.S. Department
of Commerce – Economic Development
Administration (EDA), and a $400,000
contribution from the City of Anderson.
FEC Lab Addition
The 3,200 square foot addition will
serve as a laboratory and prototyping
space, the addition will house the FEC’s
second full-chassis dynamometer, a
tool used to measure the torque and
power characteristics of automobiles.
The construction of the Lab Addition
was spurred on by a $475,000
contribution from the US Department
of Housing and Urban Development’s
Economic Development Initiative-
Special Project (EDI-SP) grant.

15. Client Headlines
2009
July 14, 2009 – Amatra Technologies,
Inc. Partners with IBM
Aug 14, 2009 – Soveryn, Inc. Expands to
Flagship Enterprise Center
Oct 26, 2009 – Bright Automotive secures
$1.4 million U.S. Army Contract
Jan 22, 2010 – XADS selected for U.S. Air
Force Contract
Feb 4, 2010 – Obama officials tour
Flagship
Mar 5, 2010 – Bright Automotive receives
contract to electrify U.S. Postal Vehicle
Apr 6, 2010 – Coeus Technology receives
promising results from U.S. Army testing
Apr 22, 2010 – Flagship clients XADS and
TECT are nominated for the prestigious
TechPoint Mira Award
May 13, 2010 – Accelerator and Lab
Expansion Groundbreaking
May 27, 2010 – ABI Open House in
New Building
2010

16. Flagship Accelerator Building
The Flagship Accelerator Building, scheduled to open in the fall of 2010, will
serve as a light manufacturing and prototyping facility designed to house up
to eight companies. The building will join three other buildings within the
Flagship Campus, the Flagship Enterprise Center, the Energy Systems Center
and the Anderson University Flagship Center. The project is made possible in
large part through a grant from the Economic Development Administration
(EDA) of the U.S. Department of Commerce and a financial commitment from
the City of Anderson.
The new facility will have 80,000 square feet of floor space with a 32-foot
interior height. Exterior walls will be made of pre-stressed, insulated
concrete panels and the building will house twelve docks and two drive-in
bays. In addition, the facility will be LEED certified, utilizing geo-thermal
HVAC units, passive solar panels, and green construction practices. An
Anderson based architecture firm, krM Architecture, was selected to design
the building.
The project will cost approximately $4 million, and will be funded as follows:
• $2.7 million Economic Development Administration Grant
• $400,000 through the City of Anderson
• Remaining costs through a loan secured by the FEC.

17. New Programs As a business incubator the
Flagship Enterprise Center is
and Initiatives always seeking ways to improve
the resources and services that
we provide to help our clients
find success. Here are just a
couple of FEC’s new initiatives:
SBA Microloan Program
Education
FEC is now a SBA Microloan and
Intermediary. Eligible small Access to
businesses can apply for small loans Networking
Capital
between $5,000 and $35,000 to help
establish a new business or expand
Mentoring
an existing business. This program
will encourage small business
through access to capital.
Strategic Partners Program
FEC is actively seeking to build
relationships with local professionals
in the fields of law, tax, finance, and
equity investment. Certain strategic Successful
partners provide FEC clients with
professional services for free or at a
Clients
reduced rate.

18. Challenges
One of the major challenges for
any small business incubator is
the dilemma of client
graduation. The purpose of a
business incubator such as FEC
is to help clients grow into FEC
sustainable, profitable
businesses that can “graduate”
Sustainability
into the community. Although
we celebrate when a client
successfully graduates into the
community, for the Flagship
management this can be a
difficult time. The graduation
of a large client can have a
dramatic impact on incubator
rent revenue, and hinder
management’s ability to create
a self-sustaining business
model.
Client
Graduation
It is for this reason, that we at
Flagship are so grateful to our
partners and supporters who
understand the challenges of
business incubation, and offer
their continued support.

19. L
O
O
K
I
N
G
F
O
R
W
A
R
D

20. Maybe Chuck or DeWayne can write an inspiring
note looking to the future for FEC

21. FEC Board of Directors
Jim Ault – Chairman
• Retired General Manager Delco Remy
Tim Lanane – Vice Chairman
• Indiana State Senator
Sena Landey – Treasurer
• VP of Finance Anderson University
Dr. Terry Truitt – Secretary
• Dean, AU Falls School of Business
Linda Dawson
• Exec. Director City of Anderson
Economic Development
Bill Wylan (Ret.)
• President, International Energy ,LLC
Mary Jamerson
• President Myers Autoworld, Inc.
Don Henderson
• Retired CEO – United Farm Family
Life Ins. Co
Oz Morgan
• Star Financial Bank
Dr. Victor Lechtenberg
• Vice Provost for Engagement,
Purdue University
Eddie Rivers
• Founder/Owner, Esource Resources

22. Flagship Enterprise Center
2701 Enterprise Drive
Anderson, IN 47304
Tel: (765) 622-0100
Fax: (765) 622-0211
www.flagshipenterprise.org