Discussion on Investment Mode of Seed Fund for Incubator & Experience Exchange Wuxi High-tech Pioneer Service Center Gui T ao June, 2008

Catalogue Operating Mode of Seed Fund in Wuxi 2 Experience 4 WSP Introduction 31 Case introduction 33

WSP Introduction

What about Wuxi? Top ranked No.4 for Best Commercial City in China Mainland in 2006 by Forbes Top ranked No. 15 among 25 cities with best development future in China issued by United Nation Top ranked No. 7 for cities with best competitive force in China in 2006 One of 13 bigger cities and 15 economic central cities in China One of 10 tourist cities in China Key member of core economic circle in Yangtze River Delta 1 、 WSP Introduction

What about us? Founded in 1993, a unit subordinate to the Administrative Committee of Wuxi National High-tech Industrial Development Zone Became a technological incubator at national level in 1999 Almost 100,000 m 2 is covered, m 2 is planned to be under construction. Almost 400 incubator enterprises Suntech Solar Power, Meixin Semiconductor, Zhongxing Optoelectronic, Evermore Technology and other famous enterprises were cultivated here in succession Totally 406 technological projects were undertaken here. 1 、 WSP Introduction

Members of WSP WSP Technological Innovation Park Innovation Park for Returned Overseas Students Professional incubator Technology Transfer Center Incubator of University Technological Park 1 、 WSP Introduction

Incubating Pyramid of WSP Over 70 Over 200 Over 700 Scaled industrial enterprise Graduated enterprise Incubating enterprise 1 、 WSP Introduction Whole process service

Industrial cluster of WSP SuntechRuxing Newenergy WXZTEOPWAY EvermoreBNI Optoelectronics Software 3 big new industrial clusters clusters Total income for technology, industry and trading in 2007 is RMB13.2 billion 1 、 WSP Introduction

VC in seed period VC in growth period VC in mature period Leading funds Security funds Seed fund Incubating enterprises incubators VC incubators Society funds Graduated enterprises Truest- eeship of stock equity Plant funds Private fund raising of Non-listed enterprise Pre-IPO project Invest -ment bank Innovating Pioneer Company AB 。。。。。。 Guarantor Company Main investment frame of WSP 1 、 WSP Introduction

Investment Sequence of WSP VC+ society funds (RMB2.5 billion) Guiding fund RMB0.1 billion per year Seed money RMB10 million per year Innovation fund RMB0.3 million per year enterprise in growth period and expansions period guiding pioneer investment supporting small enterprise in pioneer period matchable investment of national pioneer funds 1 、 WSP Introduction

Operating Mode of Seed Fund in Wuxi

Operating situation of seed fund Total investment projects ： Realized project quantity ： quantity under investment ： Total investment ： Average investment ： Planned investment period ： Average investment period RMB75million RMB3.6million 3 － 5 years 3.5 years 2 、 Operating mode of seed fund

Operating situation of seed fund Kinds of investment industry 2 、 Operating mode of seed fund

Orientation and function of seed fund Government leads Introducing high technology caliber and pr oject Cultivating new industrial project source Integrated investment, appropriate risk Admiring success, allowing failure 2 、 Operating mode of seed fund

Main investment principles Meeting development direction of industry, with large m arket development space Complete Pioneer team, reasonable structure Free of holding stock, investment ration will be less than 30% normally Encouraging performance option mode of intangible ass et Investment of pioneering team with opening of stock st ructure Clear relationship Clear intellectual property rights 2 、 Operating mode of seed fund

decision-making procedure of seed fund 2 、 Operating mode of seed fund Project 1 Project 2 Project n Incubator guide Submitting commercial plant professional investment (risk investment company) Incubator 1 Incubator 2 Incubator n Inspection and study Negotiation Failed to pass Signing investment contract Decision-making group of science & technology in new Pass Failed to pass Building company Seed money Entrusted management under risk investment company Quit after value is added

Case Introduction

Key case-Suntech Solar Power In August, 2000, business negotiated Established at the end of 2000 Trial produced in July 2002 Seed capital quitted in third quarter of Listed in New York Stock Exchange in December, 、 Case introduction

Key case-Suntech Solar Power Primary registered capital is USD 8 million No.Property of stockholderStock percentage 1Society capital45% 2Pioneer team capital25% 3Government seed capital30% Total100% 3 、 Case introduction

Key case-Nawei Electron Seed fund investment pushes project to establish Replanning development mode for enterprise which redu ce market risk Quit of preference bond stimulates pioneering passion of team Establishing working room for academician to occupy high est technology High efficient and careful service helps enterprise to go on expressway Cooperation of production, study and development helps enterprise to grow 3 、 Case introduction

Key case-Nawei electron 3 、 Case introduction Holding percentage in primary pioneer period Holding percentage after counterpurchasing preference bond when target is realized Pioneer team30%60-70% Society capital30%30-20% Governmental seed capital40%10% 100% 1.Counterpurchasing price of preference bond is the investment cost; 2.Preference percentage will be renegotiated and defined if target is failed to realize; 3.Seed capital can quit in advance in accordance with financing requirement.

Experience

Main experience Seed fund must be subject to governmental invest ment Management of seed money must be specialization Interaction of seed money and incubator can play the maximum benefit.Interaction of seed money and incubator can play the maximum benefit. Supervision and service in whole process is very i mportant Try new mode of option for value-added service, grow with enterprise mutually. 4 、 Experience

Thanks!!

Main functions of incubator 4 、 Experience Tutorship for pioneer Allocating resource Obtaining policy support Market financing United innovation Value-added service incubator