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Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Seed Capital for Growth 5 October 2011

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Enterprise Equity Venture Capital AIB Seed Capital Fund Background  €53 million fund size (€30m increased in 2009 to €53m).  Fund commenced 1 st July 2007  Enterprise Equity : All investments in Dublin over €250k. All Regional investments irrespective of size  Initial investment size permitted - up to €500,000  Follow-on investment possible  Maximum investment any one investment - €1.5m  Start up and early stage companies  Normally companies designated as HPSU’s by EI.

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Page 1: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

Investment General Partnerof

The AIB Seed Capital Fund

Seed Capital for Growth

5 October 2011

Page 2: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

Background to Enterprise Equity VC

Founded in 1987. Currently two funds under management

Regional Fund €22 ml (closed to new investees) Co-Manager of AIB Seed Capital Fund €53 million

Invested in 68 companies (>165 transactions) 5 experienced investment professionals Offices in Cork, Galway, Dundalk and Dublin www.enterpriseequity.ie

Page 3: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

AIB Seed Capital FundBackground €53 million fund size (€30m increased in 2009 to €53m). Fund commenced 1st July 2007 Enterprise Equity : All investments in Dublin over €250k. All Regional

investments irrespective of size Initial investment size permitted - up to €500,000 Follow-on investment possible Maximum investment any one investment - €1.5m Start up and early stage companies Normally companies designated as HPSU’s by EI.

Page 4: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

AIB Seed Capital Fund• Invested in 38 Investees to-date in

59 separate tranches of Capital• Every €1 invested by AIBSCF has

levered an additional €3.30 from other sources

• By year end expect to have a portfolio of c 45 investees

Page 5: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

What is Venture Capital? Long-term Funding Equity Participation Active Involvement (at non-exec level) Usually unsecured If pure equity - no defined repayment If convertible preference shares – defined

repayment If convertible loan – defined repayment May be a coupon/(interest rate) with preference

shares/convertible loan

Page 6: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

Benefits of Venture Capital

Provides significant funding Leverages other funding Source of follow-on funding Raises Credibility Commercial/Strategic expertise Guidance/Governance

Page 7: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

You need to consider the following.

Dilution Loss of Autonomy Valuation Exit Focus

Page 8: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

How we view things

Management Team Calibre Experience/Expertise Composition Commitment What have they invested

Page 9: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

How we view things

Market Size Growth Accessibility : Distribution Competition Barriers to entry Value Proposition Who will buy : be specific

Page 10: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

How we view things

Product/Technology Stage of Development Market Driven Compelling Reason to buy Demonstrable Superiority Market Validation IP/Barrier to Entry

Page 11: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

How we view things

Business Model/Financial Demonstrate Economics of Business Realistic, Defensible Forecasts Path to Profitability Clean balance sheet Bottom-up – by product /by Customer

Page 12: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

The Deal

• When• How Much• What Mechanism• What Valuation

Page 13: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

Your VC Should

• Understand your Business• Understand what you are trying to do• Understand start-ups• Be a person you can work with

Page 14: Enterprise Equity Venture Capital Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise Equity Venture Capital

Enterprise Equity Venture Capital

PartnersManaging PartnerConor O’Connor, FCA, ASIP. Joined EE in 1991. Former Chairman of IVCA and past Board member of EVCA. Represented O’Connor family on Board of Arnotts from which they successfully exited.

Galway OfficeEric Reed, BA, FCA. Joined EE in 2003. Former Coopers & Lybrand, Digital Equipment, Multis Group, Anecto.

Rory Hynes, DPA. Joined EE in 2001. Former Údarás na Gaeltachta.

Dublin OfficeTom Shinkwin, BComm, MBA, FIB. Joined EE in 2005. Former Morgan Stanley, Ulster Bank (RBS).

Cork OfficeFrank Walsh, BComm, Dip. Comp. Sc., NASD Series 7. Joined EE in 2006. Former Volpe Welty, San Francisco.