EGL Ventures IV

EGL Ventures EGL Ventures IVIV

Private and ConfidentialPrivate and Confidential

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EGL Ventures IVEGL Ventures IV

Target:Target: $100 million in capital. $100 million in capital. Balanced:Balanced: Early- and later-stage.Early- and later-stage. Geography:Geography: Southeast U.S. focus. Southeast U.S. focus. Sectors:Sectors: Balanced between Balanced between

information technology, information technology, telecomm, and health care.telecomm, and health care.

Management:Management: 50+ years 50+ years experience.experience.

IntroductionIntroductionIntroductionIntroduction

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PerformancePerformance

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OpportunityOpportunity

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EGL-IV HistoryEGL-IV History

Aggregate 50+ years of Aggregate 50+ years of successful private equity successful private equity investing.investing.– Two General Partners have worked Two General Partners have worked

together for 15 years in three together for 15 years in three predecessor funds.predecessor funds.

– New GP has eight years experience New GP has eight years experience in three funds totaling $260 million. in three funds totaling $260 million.

– Fourth fund in the Southeast for all Fourth fund in the Southeast for all General Partners.General Partners.

The right team with the right The right team with the right strategy at the right time.strategy at the right time.


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Private Equity SectorPrivate Equity Sector

19.1%19.1%Early-stage VCEarly-stage VC

13.3%13.3%Balanced VCBalanced VC

13.8%13.8%Later-stage VCLater-stage VC

12.4%12.4%Buyout FundsBuyout Funds

13.6%13.6%All Private EquityAll Private Equity

23.5%23.5%EGL GP NetEGL GP NetReturnsReturns


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12.9%12.9%S&P 500S&P 500

12.4%12.4%NASDAQNASDAQ

Venture Economics:Venture Economics:20-year net returns20-year net returns

through 12/31/03 through 12/31/03

15-year net returns15-year net returnsthrough 12/31/03through 12/31/03

$107M $107M invested;invested;

$170M $170M returned;returned;

$14M $14M unrealized.unrealized.

All returns shown net of management fees and carried All returns shown net of management fees and carried interest.interest.

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Regional OpportunityRegional Opportunity

Regional advantages:Regional advantages:–$1.5 trillion economy$1.5 trillion economy–Low taxes, low cost of livingLow taxes, low cost of living–Deep pool of human capitalDeep pool of human capital– Intellectual capital anchored Intellectual capital anchored by universities and Federal by universities and Federal R&DR&D

–Other pieces are in place Other pieces are in place (legal, banking, accounting, (legal, banking, accounting, etc.)etc.)


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Technology in the Technology in the SoutheastSoutheast


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Multiple Multiple

technology technology

centers.centers.

Anchored by:Anchored by:

Atlanta, Atlanta,

Research Research

Triangle, Triangle,

Florida.Florida.

Pockets of Pockets of

innovation:innovation:

Universities, Universities,

Federal Federal

R&D centers.R&D centers.Biggest challenge:Biggest challenge: Lack of local venture Lack of local venture capital.capital.

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Regional Regional UndercapitalizationUndercapitalization

Venture firms do not offer Venture firms do not offer adequate leverage for local adequate leverage for local R&D.R&D.

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Bay Area Northeast Southeast

University R&D ($B)Venture Investment ($B)

1.6 1.6

99 2121

Substantial Substantial room for room for improvemenimprovement!t!

Source:Source: Venture Venture Economics and the Economics and the

Center for R&DCenter for R&D


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The EGL AdvantageThe EGL Advantage

Substantial operational experience Substantial operational experience at CXO levels.at CXO levels.

15 years of investing in the 15 years of investing in the Southeast.Southeast.

Staying the course:Staying the course: Technology- Technology-oriented growth companies.oriented growth companies.

A record of leadership.A record of leadership.


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EGL was EGL was first first outside outside investor in investor in 20 out of 20 out of 31 deals.31 deals.

EGL held EGL held board seats board seats in 26 out of in 26 out of 31 deals.31 deals.

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Management TeamManagement Team

Three General Partners:Three General Partners:– David EllisDavid Ellis– Stephen FlemingStephen Fleming– Salvatore MassaroSalvatore Massaro

Two Senior Associates Two Senior Associates already identified.already identified.

Advisory Board.Advisory Board.


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David EllisDavid Ellis

27+ years investment 27+ years investment experience.experience.– Oversight of 100+ Oversight of 100+

investments at 3i.investments at 3i.– 13 investments at EGL.13 investments at EGL.– Commercialization of superconducting magnet Commercialization of superconducting magnet

technology, leading to creation of MRI industry.technology, leading to creation of MRI industry.

Ph.D., Biophysics;Ph.D., Biophysics;BS, Chemistry (both St. Andrews).BS, Chemistry (both St. Andrews).

Georgia Tech Advisory Board Georgia Tech Advisory Board memberships.memberships.

Substantial CXO operations Substantial CXO operations experience.experience.

15-year partnership with Sal Massaro.15-year partnership with Sal Massaro.


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Stephen FlemingStephen Fleming

8+ years investment8+ years investment experience. experience.– General Partner, Alliance General Partner, Alliance

Technology Ventures.Technology Ventures.– 18 investments as lead 18 investments as lead

investor, 15 exits to date.investor, 15 exits to date. BS, Physics, Ga. Tech BS, Physics, Ga. Tech (Highest Honors).(Highest Honors). 15 years operational experience at AT&T 15 years operational experience at AT&T

Bell Labs, Nortel, LBell Labs, Nortel, LICOMICOM (venture-backed (venture-backed startup).startup).– Supervised startups developing first ADSL Supervised startups developing first ADSL

modem and one of the first cablemodems in early modem and one of the first cablemodems in early 1990s.1990s.

Multiple advisory boards at Georgia Tech; Multiple advisory boards at Georgia Tech; endowed chair in telecomm; instructor in endowed chair in telecomm; instructor in MBA entrepreneurship program.MBA entrepreneurship program.

Strong regional technology leader.Strong regional technology leader.


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Salvatore MassaroSalvatore Massaro

20+ years investment 20+ years investment experience.experience.– 13 investments, 13 exits.13 investments, 13 exits.

Prudential-Bache Prudential-Bache Venture Capital, Price Waterhouse.Venture Capital, Price Waterhouse.

CFO through IPO of Telesphere Int’l.CFO through IPO of Telesphere Int’l. MBA, Harvard University;MBA, Harvard University;

BSBA, Georgetown BSBA, Georgetown (High Honors).(High Honors). Former Member of Former Member of NASBICNASBIC Board of Board of

Governors.Governors. 15-year partnership with David Ellis.15-year partnership with David Ellis.


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AdvisorsAdvisors

Ian ArmitageIan Armitage Founder & Managing Partner, HgCapitalFounder & Managing Partner, HgCapital

Mark BraunsteinMark Braunstein Founder & CEO, Patient Care Founder & CEO, Patient Care TechnologiesTechnologies

Jean-Lou Jean-Lou ChameauChameau Provost, Georgia Institute of TechnologyProvost, Georgia Institute of Technology

Michael CroninMichael Cronin Founder & Managing Partner, Weston Founder & Managing Partner, Weston PresidioPresidio

Joseph ForgioneJoseph Forgione VP, Net Solutions, Novell; former CEO, VP, Net Solutions, Novell; former CEO, EpriseEprise

James KrugmanJames Krugman Former CEO, Meadox Medicals (Boston Former CEO, Meadox Medicals (Boston Sci.)Sci.)

John LappingtonJohn Lappington VP, Broadcom; founder, Digital FurnaceVP, Broadcom; founder, Digital FurnaceDoug McMahonDoug McMahon VP, Global Accounts, Hewlett-PackardVP, Global Accounts, Hewlett-PackardHoward Howard MorrisonMorrison Retired VP, Bank of AmericaRetired VP, Bank of America

Barrett Barrett O’DonnellO’Donnell Former Chairman & CEO, CareCentricFormer Chairman & CEO, CareCentric

Bill WoulfinBill Woulfin Former CEO, LecStarFormer CEO, LecStar


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EGL PerformanceEGL Performance

Net IRR Net IRR (annualized)(annualized):: 23.5%23.5%Net Multiple: Net Multiple: 1.5 1.5 All returns shown net of management fees and carried All returns shown net of management fees and carried

interest.interest.

31 investments 31 investments over 15 years over 15 years (1989–2003)(1989–2003)

$107M $107M invested;invested;$170M $170M returned;returned;$14M $14M unrealized.unrealized.


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EGL PerformanceEGL Performance

$107M invested, $170M realized.$107M invested, $170M realized.$14M still unrealized at current valuations.$14M still unrealized at current valuations.

MultipleMultiple IRRIRR

Gross ReturnsGross Returns

Realized ReturnRealized Return 1.6x1.6x 29.4%29.4%

Realized, plus Unrealized Realized, plus Unrealized ValuationsValuations 1.7x1.7x 30.1%30.1%

Net ReturnsNet Returns (net of management fees and carried (net of management fees and carried interest)interest)

Realized ReturnRealized Return 1.4x1.4x 22.5%22.5%

Realized, plus Unrealized Realized, plus Unrealized ValuationsValuations 1.5x1.5x 23.5%23.5%


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Previous Portfolio Previous Portfolio CompaniesCompanies

Successful IPOs and M&As.Successful IPOs and M&As.

ADS NetTools (EGL)ADS NetTools (EGL)Artcraft (EGL)Artcraft (EGL)Astracom (SRF)Astracom (SRF)At Work (EGL)At Work (EGL)Boca Photonics (SRF)Boca Photonics (SRF)BroadRiver (SRF)BroadRiver (SRF)Care Centric (SRF)Care Centric (SRF)Checkmate (EGL)Checkmate (EGL)Digital Furnace (SRF)Digital Furnace (SRF)Eprise (SRF)Eprise (SRF)Fluid Data (EGL)Fluid Data (EGL)Home Wireless (SRF)Home Wireless (SRF)iFleet (EGL)iFleet (EGL)iPower (SRF)iPower (SRF)The Learning Co. (EGL)The Learning Co. (EGL)Pathfire (SRF) Pathfire (SRF) Physician Health Corp. Physician Health Corp.

(EGL)(EGL)Pi Holdings (EGL)Pi Holdings (EGL)Quokka Sports (EGL)Quokka Sports (EGL)Renaissance Int. (EGL)Renaissance Int. (EGL)RF Micro Devices (SRF)RF Micro Devices (SRF)RF Solutions (SRF)RF Solutions (SRF)SecureWorks (SRF)SecureWorks (SRF)Simione Central (EGL)Simione Central (EGL)Sportsline (SRF)Sportsline (SRF)Synchrologic (SRF)Synchrologic (SRF)Telaxis (SRF)Telaxis (SRF)ValuBond (SRF)ValuBond (SRF)Verifiber (SRF)Verifiber (SRF)ZapMedia (SRF)ZapMedia (SRF)Zarina (EGL)Zarina (EGL)


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Previous Syndicate Previous Syndicate PartnersPartners

Followed OurFollowed OurOriginationOriginationAT&T VenturesAT&T VenturesBank of AmericaBank of AmericaCharles SchwabCharles SchwabCordova Cordova VenturesVenturesCrystal VenturesCrystal VenturesFT VenturesFT VenturesGE CapitalGE CapitalGrotech CapitalGrotech CapitalHalpern DennyHalpern DennyImlay Imlay InvestmentsInvestmentsIntelligent Intelligent Systems Systems ITC Holdings ITC Holdings IVP / RedpointIVP / RedpointJK&B CapitalJK&B CapitalKinetic Ventures Kinetic Ventures Kitty Hawk Kitty Hawk CapitalCapitalMellon VenturesMellon VenturesNBC NBC Noro-MoseleyNoro-MoseleyPanAmSat PanAmSat


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Quadrangle Capital Quadrangle Capital Riggs CapitalRiggs CapitalRobinson Humphrey Robinson Humphrey Sand Hill Capital Sand Hill Capital Sevin Rosen FundsSevin Rosen FundsUS Venture PartnersUS Venture PartnersVantage PointVantage PointWeston PresidioWeston Presidio

Invited Us to Invited Us to LeadLeadSubsequent Subsequent RoundRoundAdvanced Tech Advanced Tech VenturesVenturesAllen TelecomAllen TelecomCBSCBSCoral Ventures Coral Ventures Domain AssociatesDomain AssociatesEMC VenturesEMC VenturesKleiner PerkinsKleiner PerkinsLucent VenturesLucent VenturesPrism Ventures Prism Ventures ReutersReutersUS WestUS West

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Classic Fund StructureClassic Fund Structure

Limited Partnership.Limited Partnership. 2.5% management fee.2.5% management fee. 80/20 carried interest after 80/20 carried interest after

payback of committed payback of committed capital.capital.

Intent to comply with Intent to comply with ERISA regulations.ERISA regulations.

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Why Us? Why Now? Why Us? Why Now?

A team that:A team that:– Transcends adversityTranscends adversity– Seizes opportunitiesSeizes opportunities– Delivers on expectationsDelivers on expectations

…… with the experience to with the experience to make it make it happen.happen.

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EGL Ventures EGL Ventures IVIV

EGL VenturesEGL Ventures3495 Piedmont Road 3495 Piedmont Road Ten Piedmont Ten Piedmont CenterCenterSuite 412Suite 412Atlanta, Georgia Atlanta, Georgia 30305 30305 (404) 949-8303(404) 949-8303www.eglventures.cowww.eglventures.comm

Placement Agent:Placement Agent:

Ariane Capital PartnersAriane Capital Partners

501 Candace Lane501 Candace Lane

Suite 100Suite 100

Villanova, Pennsylvania Villanova, Pennsylvania 1908519085

(610) 525-0749(610) 525-0749

www.arianepartners.comwww.arianepartners.com

Documents

EGL Ventures IV