FINDING UBER: AN INSIDE LOOK AT

EARLY STAGE INVESTING

AGENDA

• History

• Early Stage Asset Class

• 3 Early Stage Companies

• Wine

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THE FUNDING CYCLE

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Average Size of

Funding Round

(millions)

0"

1"

2"

3"

4"

5"

6"

7"

8"

9"

1990s" 2000s" 2010s"

FFF"

Angel"

VC"

FUNDING TRENDS

“Investing in stocks, bonds, commodities — even alternatives — is efficient, transparent and cheap.

Early stage investing is the last closed, inefficient asset category left.”

—Tony Kelly, Head of US Capital Markets, Goldman Sachs

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Early Stage Assets

Performance Early stage investments demonstrate excellent long term return characteristics

Diversification Early stage investments

are diversifying and additive to most portfolios:

assets have low levels of correlation to

each other and to other

asset classes

7

EARLY STAGE INVESTING OFFERS UNIQUE INVESTMENT OPPORTUNITIES

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THE UBER EFFECT

9

RETURNS OUTSTRIP OTHER ASSET CLASSES OVER NEARLY EVERY PERIOD

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Sources: Cambridge Associates, Bloomberg

10

ALLOCATION TO EARLY STAGE ASSETS LOWERS THE RISK PROFILE OF MOST PORTFOLIOS

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“Over any significant time period, research shows that a portfolio including early stage companies outperforms a

traditional portfolio in terms of both risk and return. An allocation towards startups decreases the

standard deviation of returns and more specifically, downside deviation.”

Over the past 10 years, a qualitatively similar allocation of 49% stocks, 51% startups

multiplied returns by almost 5x with no change in underlying risk.”

—Report of Illinois Business Consulting, University of Illinois (2015)

TEAM STRATEGYPRODUCT MARKET STRUCTURE

‣ Skill set, passion, competence

‣ Experience: domain, startup, management

‣ Long term vision

‣ Backgrounds and education

‣ Advisor strength and involvement

‣ Customer value proposition

‣ Development stage

‣ User experience

‣ Investor value proposition

‣ Product roadmap

‣ Market depth and scale

‣ Competition and differentiation

‣ Barriers to entry

‣ Customer growth, retention, momentum

‣ Revenue model and cash flow evaluation

‣ Revenue momentum metrics

‣ Legal and IP evaluation

‣ Supplier / client agreements

‣ Marketing / goal alignment

‣ Human, technical and capital resources

‣ Funding deployment efficiency

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SEEDCHANGE ANALYSIS PROCESS: QUANTIFIABLE, NOT QUANTITATIVE

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