Pitch deck 5.95

Kristy Schultz | Cory Oliver2013

online angel investing within trusted professional networks

© threeDegrees 2013 CONFIDENTIAL 2

Team

Kristy Schultz | BD & Marketing• 11 years marketing experience, including 6 years

advising distressed businesses

• Harvard Business School MBA

• HBS Alumni Angels NY Deal Committee, HBS Club of NYC, HBS FIELD 3 Alumni Advisor

Cory Oliver | Ops & Finance• 6 years consulting in high-urgency situations:

turnaround, private equity, M&A, startups

• London Business School MBA

• BS in mechanical engineering


Startup funding is inefficient

53%18%

• 70% of investment concentrated in entrepreneurship hub cities

• More than 60% invested in three industries: software, IT services, and biotech

• Fundraising takes 3-9 months of valuable time

• 96%+ of qualified individuals do not invest in startups, though many would like to

Venture capital dollars invested by geography, 2012

8.7M households qualify to invest

Fewer than300k are active angels

“Dormant Angels”

StartupsInvestors

Sources: (1) Securities Exchange Commission, (2) Center for Venture Research, University of New Hampshire (3) “VC Investments Q1 13- MoneyTree-National Data,” National Venture Capital Association, nvca.org. 10 June 2013


• More efficient due diligence process• Access to high-quality, trusted startups• Lower minimum investments (currently $25-100k)

Investors want…

Startups want…

• Access to investors anywhere in the US• Fundraising made easier, shorter, and less expensive• Supportive investors with value-add connections

Investors and startups need a better option

Source: 2012 threeDegrees survey of HBS alumni who qualify but do not invest in startups. Largest barriers to investment cited were 1) lack of time to vet deals, 2) lack of dealflow and 3) aversion to investing $25K per company


Powerful Networks

• Only open to startups affiliated with trusted professional networks, starting with the elite MBA communities

• Allows individuals to invest in and alongside people they know

• Limited to accredited investors

Exclusively Online

• Deals from any geography or industry

• Real-time communication and document management reduces time and cost for both sides

Collaborative & Transparent

• Collaborative diligence leverages the collective experience of many investors

• Public Q&A and accreditation certification increase transparency and trust

• More investors means decreased investment minimums: as low as $1k

threeDegrees is the solution

threeDegrees is an online angel investing platform that uses the power of elite professional networks to connect startups and investors


Online convenience, offline exclusivity

Private Networks

Public Networks

Local Angel Clubs

Competitions

Crowdfunding PlatformsPitching Events

Accelerators

We combine the transparency and convenience of online investing with the exclusivity, privacy, and trust of angel clubs

Offline Online


* Title II of the JOBS Act allows issuers of securities to advertise publicly to previously inactive investors**Assumes average of $5-10k invested annually per qualified household; estimate based on threeDegrees survey data***Total capital raised under Rule 506 in 2012 by operating companies. If pooled investment companies are included, the total increases to approximately $800B

Sources: (1) Center for Venture Research, University of New Hampshire. (2) SEC. (3) 2012 threeDegrees survey of HBS alumni who qualify as accredited but do not invest in startups.

POTENTIAL FOR EXPANSION

$43-$87BInvesting capacity of“dormant angels”**

Angel investing: $23B annually and growing

Dormant Angels—8 million individuals who qualify to invest but choose not to—could add an additional $43-$87 billion following recent regulatory changes*

CURRENT MARKET

$23BAnnual capital invested

by active angelinvestors

$170BTotal funds raised through private

placements***


Two methods of monetization

Monetize the Transaction

Monetize the Network

Immediately Later

We have increasing options to monetize the business as we scale

Cut of capital / Carried interest(transaction fee paid in cash, or percentage of proceeds in liquidity event)

Additional services(expansion to secondary investments, new asset classes)

Transaction services(Monthly membership fee for premium services, such as investor accreditation verification)

Talent(listing and placement fees for connecting funded startups with talent)

1

2Business services(referral fees for connecting funded startups with service providers)


Launch

We launched our beta test on November 5th and are seeing excellent results

Six participating

startups founded by top-tier MBAs

364 investors

personally invited by startups

$45kin new funding commitments made in first 6 days

• Recruited startups from Harvard, Kellogg, NYU, and Columbia, including TechStars 2013 alum

• Startups invited 364 investors, an average of 60 investors each

• 73 new investors registered; total investor base now 130 including pre-launch registrations

• Recorded $45k in new capital commitments in first six days through threeDegrees (on top of $510k aggregate previous commitments)

• Campaign currently underway to educate and further engage investors, with 60-120 days remaining in fundraising round for each beta startup


Launch

364 personal invitations emailed for beta launch

63% OpenRate

23% ClickRate

20% Signup

Rate

*All rates calculated as % of total invitations sent

73new investor registrations

Most importantly, our acquisition funnel demonstrates the power of personal and professional networks

Investor acquisition yields far exceed benchmarks

+Strong WOM/referral potential for startup acquisition

6 startups participating in beta send invitations to their networks

9 unsolicited registrations by qualified MBA-founded startups

+ 150%


Milestones & rollout plan

Developed business plan & alpha site

HBS New Venture Competition regional finalist

Q1 2013

Q2 2013

Q4 2013 Invitation-only beta test launched on Nov 5

Q1 2014Redesign platform for scalability and expand monetization mechanisms, soft launch across top 15 business schools

Q3 2014+ Full launch; expand to other elite networks; hire tech & legal leads

Founders full-time on threeDegrees; beta site completedQ3 2014


Kristy [email protected](c) 917.476.1908

Cory [email protected](c) 713.969.8024

Economy & Finance

Pitch deck 5.95