Perspectives on European

1

• Perspectives on European
• Venture Capital
• Graham OKeefe

2
Europe Represents An Attractive VC Opportunity

• Strong Research Base
• Rich Talent Pool
• Large Home Markets
• Mature Investor Community
• Global Ambition
• Proven Exit Markets

3
Mature Investor Community

• Atomico
• EEF
• IP Group
• London Technology Network
• Scottish Enterprise
• Braveheart
• London Seed Capital

• Local angel networks

• Balderton
• Accel
• Atlas Venture
• 3i
• Abingworth
• Amadeus
• Index
• SEP
• Etc

• Google
• Cisco
• Intel
• NEC
• Nokia
• Novartis
• Novo

• Silicon Valley Bank
• ETV Capital
• Kreos
• GE Finance

• Fidelity
• Summit
• TA
• Tiger Global
• Tudor

• Dedicated and generalist funds

4
Emergence of Repeat Entrepreneurs
5
Proven Exit Markets
European IT Exits, 2002 to 2006

• MoneySupermarket (raised 722m Jul 07)
• Renovo (raised 88m Apr 06)
• Optos (raised 53m Feb 06)

London Stock Exchange

• 104 IPOs raising 10bn
• 130bn in MA

• Seloger.com (raised 100m Nov 06)
• Metabolic Explorer (raised 72m Apr 07)
• Metris (raised 72m Dec 06)
• Aden Classifieds(raised 59m Mar 07)
• Tigenix (raised 55m Mar 07)

Euronext

• Biovitrum (offered existing shares Sep 06)
• LifeCycle Pharma (raised 90m Nov 06)
• Exiqon (raised 56m May 07)
• Algeta (raised 38m Mar 07)
• Trolltech (raised 20m Jul 07)

OMX (Scandinavia)

• Addex (raised 106m May 07)
• Newron (raised 92m Dec 06)

Swiss Stock Exchange

• Smart Fuel Cell (IPO Nov 06 existing shares)
• Wilex (raised 66m Nov 06)
• MAGIX Entertainment(raised 27m Apr 06)

6
Capable of Producing Great Exits
7
Notable Atlas Exits

• Acquired by Motorola for an undisclosed sum,
  April 2006

Acquired by Broadcom for 594m, December 2000
Acquired by TA Associates for 184M cash, October
2006

• Acquired by TIBCO Software for 195M in cash, May
  2007

• Acquired by Daiichi Sankyo for 230m, May 2008

• IPO on Nasdaq, 1994

800m IPO on SWX, April 2000

• Acquired by AstraZeneca Plc for 150M cash,
  February 2007

270m IPO on LSE, April 2006
8
Global Ambition

• Identified an emerging billion dollar market
• Developed the business plan with the founders
• Provided seed capital to fund technology
  demonstrator
• Hired Chairman and CEO
• Syndicated 12m Series A financing with Advent
  and Accel
• Strategic investment by Google, T-Mobile, NEC

9
Where is the money really flowing (US)?
Total Venture Investment Q1 2004 to Q3 2008, bn
Change versus Q2 1999 to Q4 2003,
Source PWC / MoneyTree
10
Importance of later stage money (US)
Ratio of late stage to early stage investment Q1
2004 to Q3 2008, late per early
Change versus Q2 1999 to Q4 2003,
Source PWC / MoneyTree
11
An Investment Approach to Clean Tech

• Addresses customer pain beyond being clean
• Doesnt rely on consumers willingness to pay a
  premium for clean label
• Viable in the longer term without the need for
  regulatory incentives

• Easily recognizable ROI with short payback period
• Acts as complement, enabler or substitute to
  existing product / service
• Cost advantaged versus alternatives with low
  switching costs

• Usage of product not dependant on broader
  infrastructure changes
• Success of business not closely tied to success
  of others
• Economics relatively insensitive to broader
  economic changes

• Superstar team
• Differentiated with strong barriers to
  competition
• Low capital intensity with short time time cash
  flow breakeven

the difference between clean tech and ICT is
that in clean tech your product has to work,
Patrick Sheehan ETF
12
WELCOME TO CLEANTECH WHERE DO YOU WANT TO
INVEST?
13
Cost of abatement, 2030, per cubic tons of
carbon equivalents
70 of the total 2030 abatement potential not
dependent on new technology 45 of saving from
negative cost solutions
Source McKinsey and Vattenfall analysis
14
Investment Basics Remain Firm

• Capital intensity makes or breaks
• Massive markets shrinking are still huge markets
• Timing is everything