April2010

Product Development & Venture Fund Raising

1. Encore Ventures & DFJ Esprit

2. General themes investors look for irrespective of stage

3. Venture funding stages vs. Product development stages

4. Case study

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Contents

Who we are

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Krishna Visvanathan - Partner

11 years as Venture Capitalinvestor.

Previously a partner at 3iresponsible for several successfulinvestments including Ezurio, BlueLithium, Ubinetics, E2V plc &Fastnet Systems

Currently on the boards ofCambridge Semiconductor, Icera,Light Blue Optics, Netronome,Taptu & The Cloud

Encore Ventures - dedicated secondary vehicle underDFJ Esprit’s umbrella

Encore Fund 1 - £130m purchase of 3i’s European ventureportfolio

DFJ Esprit – leading technology focused European VC

Three funds, with >£350m under management

Recently closed our new fund and actively seeking newinvestment opportunities

Encore & DFJ Esprit part of DFJ Global Network

Two brands to cater to the requirements of our investors

In essence - 12 highly experienced venture investors with>150 years of combined investing experience across allstages

Strategic partner of CCL’s with respect to their spin outactivity

The DFJ network in action

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DFJ GothamNew York

Element PartnersRadnor, PA

Draper TrianglePittsburgh, PA

Draper TrianglePittsburgh, PA

DFJ Mercury Houston, TX

Access Venture Partners Denver, CO & Austin, TX

EPIC Ventures Salt Lake city, UT

Phoenix, AZAlbuquerque, NM

DFJ FIR Brazil FundSao Paulo, Brazil

DFJ Dragonfund ChinaSan Jose, CA

Zone Ventures Los Angeles, CA

Element PartnersMenlo Park, CA

DFJ Growth Fund & DFJ IncubeMenlo Park, CA

Draper Fisher JurvetsonMenlo Park, CA

DFJ FrontierSacramento, CASanta Barbara, CA

DFJ EspritLondon, UK

DFJ Tamir FlashmanTel-Aviv, Israel

DFJ VTB AuroraMoscow, Russia

DFJHyderabad, India Bengalore, India

DFJ AthenaSeoul, South Korea

DFJ DragonFund ChinaShanghai, ChinaBeijing, China

DFJBeijing, China

LOCAL PRESENCE, GLOBAL REACH

Company RevenueEBIT@

ExitExit EV

Revenue Multiple

Holding Period (Yrs)

Cash Multiple Returned

$29.8m Negative $225.0m 7.6x 3.0 5.3x

$46.0m Breakeven $125.0m 2.7x 1.6 4.8x

$10.6m Negative $123.0m 11.6x 3.6 3.1x

$0.1m Negative $62.2m 1,555x 4.0 3.1x

$27.6m Negative $100.0m 3.6x 4.6 10.4x

$10.8m Negative $36.9m 3.4x 1.5 1.9x

$7.6m Negative $41.5m 5.5x 2.4 2.3x

$40.0m Negative $40.0m 1.0x 4.3 1.2x

$0.5m Negative $35.0m 76.1x 9.0 1.1x

Median $10.8m - $62.2m 5.5x 3.6 3.1x

Average $19.2m - $87.6m 185.2x 3.8 3.7x

ESPRIT RECENT EXITS

Encore I Portfolio Overview

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SoftwareDigital Media &

InternetHardware &

SemisNextGen Telecom

& WirelessHealthcare & Biosciences

CleanTech

Exits

Current Investments

PulmagenTherapeutics

1. Encore Ventures & DFJ Esprit

2. General themes investors look for irrespective of stage

3. Venture funding stages vs. Product development stages

4. Case study

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Contents

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There is no generic template for success – huge variations by company/segments e.g. web vs. software vs. hardware vs. biotech/medtech

There are always exceptions

Successful companies/investments share many similar characteristics

People, people, people - the team we are backing is always key:-

– Vision, ambition, conviction, hunger

Product meets a need, TAM is sizeable - not a technology looking for a market

Routes to market

Competitive landscape

Business/Revenue model

Scalability – people, product and business model

Understanding of what it takes to create a winning product and a winning company

General Themes Investors Look For Irrespective

of Stage

1. Encore Ventures & DFJ Esprit

2. General themes investors look for irrespective of stage

3. Venture funding stages vs. Product development stages

4. Case study

8

Contents

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Venture Capital Funding Stages mapped

to Product Development Stages

Funding Stage Product Stage Key Questions

Pre-seed/Seed Concept/ Proof of

Concept (α)

Illustrates the vision of the founder(s)

Value proposition – is it credible ?

Just a better mouse trap or something

truly novel?

Visualisation appeals to emotive

aspects of an investor

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Venture Capital Funding Stages mapped

to Product Development Stages

Funding Stage Product Stage Key Questions

Series A Prototype/

demonstrator (β)

Does it work?

Is it really better than state of the art?

Can it be “production-ised”?

Is it defensible – IP/know how?

Customer feedback loop?

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Venture Capital Funding Stages mapped

to Product Development Stages

Funding Stage Product Stage Key Questions

Series B Production ready

(FCS/GA)

Form, fit, function

Differentiation/Competitive

benchmarking

ASPs & BoM costs

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Venture Capital Funding Stages mapped

to Product Development Stages

Funding Stage Product Stage Key Questions

Series C

& beyond

Mass production

Product Variants

Roadmap

Scalability & profitability

Value potential & metrics

Sustainability vs. One trick pony

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Venture Capital Funding Stages mapped

to Product Development StagesFunding Stage Product Stage Key Questions

Pre-seed/Seed Concept/ Proof of

Concept (α)

Illustrates the vision of the founder(s)?

Value proposition – is it credible?

Just a better mouse trap or something

truly novel?

Visualisation appeals to emotive

aspects of an investor

Series A Prototype/

demonstrator (β)

Does it work?

Is it really better?

Can it be “production-ised”?

Is it defensible – IP/knowhow?

Customer feedback loop

Series B Production ready

(FCS/GA)

Form, fit, function

Differentiation/Competitive

benchmarking

ASPs & BoM costs?

Series C

& beyond

Mass production;

product variants

Roadmap

Scalability & profitability

Value potential & metrics

Sustainability

1. Encore Ventures & DFJ Esprit

2. General themes investors look for irrespective of stage

3. Venture funding stages vs. Product development stages

4. Case study

14

Contents

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London SW1E 6LB

United Kingdom