1. Stephanie McCoy March 9, 2010

2. Agenda • Venture Capital Process • Venture Capital Investing Trends • Industry Compensation • Dos and Don’ts

3. Venture Capital Process

4. Venture Capital Process Selecting Structuring & Syndication Creating Value Fund Raising Exiting Sourcing

5. Fund Raising Commitment Sources Source: Venture Economics

6. Key Sources For Transactions Sourcing • Relationships with Entrepreneurs • Limited Partner Investors • Other Venture Capital Firms • Accountants • Bankers • Attorneys • Investment Bankers

7. Selecting Structuring Syndication Investment Criteria • Market Potential and Size • Quality of Management • Product/Services • Sustainable Competitive Advantage • Financial Drivers

8. Creating Value Creating Value • Build Independent Boards • Guide Strategy • Facilitate Strategic Relations • Recruit Key Managers • Raise Additional Debt and Equity

9. Exiting Realization of Gains • Sale/Merger of Portfolio Company • Sale of Portfolio Company Securities (Public Offering) • Private Placement of Portfolio Securities

10. Exiting Venture Portfolio Company Returns Source: Venture Economics

11. Exiting Timing of Winners and Losers 63% 56% 37% 32% Percentage of Companies 12% Years Source: Venture Economics

12. Length of Time to Liquidate a Venture Capital Fund Source: NVCA – Adam Street Presentation Data sample size = 64 Data as of 9/30/05

13. II. Venture Capital Investing Trends

14. Equity Difficult For Companies to Obtain Fewer deals are getting funded compounded by smaller investment sizes PWC Moneytree

15. Credit Virtually Unavailable 28% Annualized Decline In the first half of 2009, companies consumed more capital than they raised for the first time in 60 years Federal Reserve: loans to commercial and Industrial

16. IPO Market Unavailable for Small Companies • IPO market has become virtually shut to smaller issuers (less than $50 million offering) Grant Thorton and Thompson Reuters

17. Going, Going, Gone 2009 Estimated American Bankruptcy Institute

18. III. Industry Compensation

19. Venture Capital Fee Structure • Management Fees - Typical Venture Fund receives 2% of the Fund annually for salaries and operating expenses • Carried Interest - 20% of realized value

20. Entrepreneur Compensation Salary and Stock Compensation by Title

21. IV. Dos and Don’ts

22. How Not to Get a VC’s Attention • Address Plan to “Dear Sir” • Management team is all ex venture capitalists • After reading the summary, have no idea what the company does • Project profitability in 6 months • Plan sent from jail • Projections exceed Microsoft’s • “There is no competition” • Plan comes from an out of work consultant • Guaranteed Exit in 3 months • Provide VC ownership of 10% or less

23. How to Get a VCs Attention • A Compelling Story • An Unfair Advantage • Pinching Pennies • Entrepreneurs have Skin in the Game • The Team has Done it Before • Command of the Key Business Metrics • Big Vision • Winning Attitude • A CEO Who Can Sell • Undeniable Customer Pain that will be Relieved • An Elevator Pitch that is Easily Repeatable

24. Stephanie McCoy March 9, 2010