Kasey Grelle Sources of Funding November 11, 2014

P. 2 | Cultivation Capital Confidential Principal, Cultivation Capital MBA, BA Washington University in St. Louis Venture Partner, SixThirty Financial Services Accelerator Venture Partner, Prosper Women Entrepreneur Accelerator Six Years Broadcast Journalism Experience –KSDK, St. Louis –KECI, Montana –ABC, Australia Kasey Grelle, Cultivation Capital Principal

P. 3 | Cultivation Capital Confidential Cultivation Capital Overview Cultivation Capital managers two early stage ventures capital fund –Early Stage Software and Information Technology –Early Stage Healthcare and Life Sciences Software and IT related companies seeking “pre-A” investment –Enterprise Software, Consumer Internet, Social Media, Financial Technology, Consumer Electronics Health and Life Sciences related companies seeking “pre-A” investment –Six Focus Areas: Healthcare IT & Services, Drug Discovery & Development, Medical Devices, Diagnostics, Agriculture, Tools & Reagents

P. 4 | Cultivation Capital Confidential Funding Opportunities in St. Louis Funding Life Cycle in St. Louis Intro to Angel Investors Understanding Venture Capital What’s it Like to Work With a VC? What do Investors Want? How to Nail Your Pitch Avoiding Common MistakesAgenda

P. 5 | Cultivation Capital Confidential Opportunity in St. Louis Startup Eco-System Seed RoundStart-UpPre-“A” Round“A” Round $0 - $100,000$50,000 - $250,000$250,000 - $3.0 Mil.> $3,000,000 Friends, Family, credit cards, Angels Friends, Family, Angels, Capital Innovators, Arch Grants Angels, Arch Angels, Billiken Angels, Cultivation Capital VC Firms 500 companies100 companies25 companies3-4 companies St. Louis is now doing a pretty good job in this space $40 million needed per year in pre-”A” funding Needed this year

P. 6 | Cultivation Capital Confidential The Funding Lifecycle in St. Louis Friends and Family Credit Cards Small Business lines of credit Angels and Grants Arch Angels Billiken Angels Arch Grants High Net Worth Individuals Accelerators SixThirty Capital Innovators Prosper Yield Lab Early Stage VC Cultivation Capital BioGenerator MTC Later Stage VCs Chicago, Nashville, Houston, San Francisco, New York IPO or Strategic Investor

P. 7 | Cultivation Capital Confidential What is an Accredited Investor? –Any individual who, alone or along with their spouse, is worth $1MM+ –An individual who makes $200k+/year OR –An individual who makes $300k+/year with spouse In 2013, accredited angel investors put $24.8 billion into nearly 71,000 early-stage companies Where do you find them? –Friends and Family –Individuals Difficult– want to stay anonymous Angel List –Networks Angel groups: Billiken Angels, Arch Angels, Golden Seeds Angel Investors

P. 8 | Cultivation Capital Confidential Venture Capital Growing source of funding: –So far in 2014, $33 billion + of venture capital funding has been invested, already exceeding the full-year 2013 total of $30 billion Regional VCs –Cultivation Capital –Dundee Venture Capital, Omaha –CincyTECH, Ohio Seed Stage VCs –500 Startups –First Round Capital –Lerer Ventures Industry Venture Funds –Google Ventures –Intel Capital

P. 9 | Cultivation Capital Confidential What’s it like to Work With a VC? Submission deals/mont h 2-3 make it to next round; /year Partner Interest Light due diligenc e 1- 2/mont h; /year Significant Interest Intense due diligence Present to investment committee 2-3/quarter Investmen t 8- 10/year Board Seat Active Investm ent Next Round(s) Syndication Partners Strategic Investors Exit

P. 10 | Cultivation Capital Confidential What Do Investors Want? Traction –Revenue, momentum Team –Expertise, drive, ability to listen Market Size –Growing industries, big oceans– not just large waves Follow-on Funding –Risk of follow-on funding

P. 11 | Cultivation Capital Confidential How to Nail Your Pitch Know Your Audience –Customize your pitch, know potential synergies, adapt your pitch based upon your investor’s knowledge of your space and product Prove You Know Your Stuff –Investors are looking for credibility, they want to know that you’re an expert in your field. However, don’t make the mistake of being too cocky– listen to feedback and graciously take constructive criticism (whether you actually implement the changes is up to you) KPIs! –Investors want to know how you measure your success. Key Performance Indicators are the metrics by which they measure that success. Show investors that you know what makes your business tick by sharing the Key Performance indicators you’re tracking Keep it interesting –Don’t get too bogged down with details. Keep the pace moving, and provide additional data if requested. PRACTICE

P. 12 | Cultivation Capital Confidential Avoiding Common Mistakes Taking too much money –Don’t get blinded by dollar signs. Don’t take too much money and dilute your own equity. Don’t take more than you need to reach the next milestones. At that point, you can raise a new round at a higher valuation Setting your initial valuation too high –No one likes a down-round! Remember, you have to raise your next round of capital Choosing the wrong investors –View this process as dating– remember you’re going to be in bed together for a very long time! Not knowing the terms of your deal/taking the wrong terms Not mapping out your funding needs and potential sources

Kasey Grelle