Slide 1

Miracles

Hermann Hauser

Cambridge HVM MNT Expo December 2006

Slide 2

Why do Miracles happen?

• People• Disruptive Technology• Clusters and Venture Capital• Community

Slide 3

From R to D

Product Development

Research TechnologyDevelopment

UniversityCorporate Research,

ConsultancyBig Company

Start-ups Big CompanyUniversity

Old: AT&T

New: CISCO M&A, IPO

Slide 4

European Miracles

• Google• Wilex• ARM• CSR• Skype• Solexa• Plastic Electronics

Slide 5

Wilex

• Biopharmaceuticals• Cancer• Munich based• > $200m market cap• 1996: winner business plan competition• Frankfurt stock exchange

Slide 6

ARM

• Acorn Team plus Sir Robin Saxby• Acorn Risc Machine• Value: Low Power, Low Cost, Instruction set• ARM Platform: 2 BILLION in 2005• De Facto Standard:

– Mobile Phones– PDAs– iPod– Gameboy

• ARM Community• Market value $3bn

Slide 7

Slide 8

Skype

• Founded 2002• Nicolas Zenstroem• Janus Friis• Sold to Ebay €2.6bn +€1.4bn earn out• P2P VOIP on internet

Slide 9

CSR• CCL team spun out in 1999• First Single chip Bluetooth: low power, low

cost, small form factor• First single chip 802.11: low power, low cost,

small form factor• Fabless Chip company• BT, 802.11 WIFI standard• Mobile phone community• 2005: Revenues:$500m, Profits: $100m• Market value $2bn

Slide 10

Cambridge

• University ranked #3 in the world• 72 Nobel laureates:

– global #1– More than any country except US and UK

• High-tech cluster: #1 in Europe– 1,000 high-tech companies– 40,000 employees

• ARM, CSR, CDT, Plastic Logic

Slide 11

Cavendish Laboratory

• Maxwell: useful equations• JJ Thomson: electron• Earnest Rutherford: Proton• Chadwick: Neutron• Crick & Watson: DNA• Richard Friend, Jeremy Burrows: OLEDs• Henning Sirringhaus: Plastic transistors, C-

mos

Slide 12

Plastic Electronics

• Richard Friend, Henning Sirringhaus, Stuart Evans + Ink-jet cluster

• Plastic transistors: low cost, flexible, large area

• New Value stack for Plastic Electronics• Flexible displays• Cambridge Ink-jet, polymer community• PEM centre?

Slide 13

First Transistor Printed Transistor20th Century 21st Century

• •

Slide 14

Slide 15

E-Newspapers

Sour

ce: I

BM

Slide 16Photolithographic patterning, high

temperatures & vacuum processing

Direct printing & solution processing

Conventional Semiconductor

Printed PlasticElectronics

Silicon vs. Plastic…

Slide 17

Slide 18

Solexa

• Ultrafast Gene-sequencing• Origin: Chemistry Dept. David

Klenerman, Subramanan• CEO: John West• Whole Genenome in less than one

Week, for less than $100,000• Personalised medicine• Camp: Sanger centre, Lynx

Slide 19

Corporate Venture Capital

• ICT: Intel, Cisco, Siemens• BIO: more UK activity• Most important MISSING link

Slide 20

When is Innovation Successful?

When a defensible break-through connects with a large market.

Slide 21

Where does Innovation happen?

In Clusters like

Silicon Valley, Route 128, North Carolina Cambridge, LondonMunich, Paris, Stockholm, Helsinki,

Slide 22

Clusters

• World Class University• Entrepreneurial Spirit• Venture Capital• Supportive Government: CGT, R&D credits,

Immigration• Close Relationship with Lead Companies• Infrastructure: Legal, Accounting, Leasing• Real Estate: Availability, Short Leases• People Network!

Slide 23

Venture backed IPO’s

2126 24

1811

1523

32

5462

67 65

4841

5749

28

14 139 6 5

915

2128

35 37

69

82 85

21

46

22

46

24

4847

13

69

0102030405060708090

4Q Q102

2Q 3Q 4Q Q103

2Q 3Q 4Q Q104

2Q 3Q 4Q Q105

2Q 3Q 4Q Q106

2Q 3Q

Tota

l No

of IP

Os

over

the

last

12

mon

ths

USEurope

Source: VentureSource

Slide 24

Average Deal Size, Seed & First stage

41% 40% 35% 32% 34%48% 46%

71%

110% 115%

138%

121% 115%

178%

68%

142%

0%10%20%30%40%50%60%70%80%90%

100%110%120%130%140%150%160%170%180%

1999 2000 2001 2002 2003 2004 2005 2006e*

Ave

rag

e D

eal S

ize

(€m

)

US Europe Amadeus Companies

Note: Later Rounds include Second, subsequent Rounds & Restarts. Europe shown as percentage to US

Source: VentureSource, Amadeus Analysis

No of rounds 7 20 9 2 5 2 2 4 (Amadeus companies) * 06 estimate is based on Q1-Q3 2006

Slide 25

Serial Entrepreneurs

17%

41%

100%

0%

20%

40%

60%

80%

100%

AM I AM II AM III

No.

of C

ompa

nies

Source: VentureXpert

Serial Entrepreneurs

Slide 26

Conclusion

• Miracles happen all the time• Technology Development Key• Plastic Electronics NEXT Growth Sector• Needs Clusters and VC• Have Faith in Europe