Is Equity Capital For You? Bill Gust Anthem Capital & Plasmonix, Inc.

Who Am I And Why Am I Here Today? 35 Years Of Start-Up/Early Stage Venture Capital Experience Technology: Apple Computer (AAPL:NYSE), Sequoia Software (NASDAQ: SQSW) Life Sciences: BioRexis (Sold to Pfizer), Immunicon (IMMC:NASDAQ), GlycoMimetics, Senseonics Healthcare: HealthSouth (HLS: NYSE) Other: Chucky Cheese (CEC: NYSE) 4 Years As A Real Live Entrepreneur CEO of Plasmonix, Inc. Life science assay consumable products start-up IP licensed from University of Maryland 10 Years Running Broseco Ranch 45,000 Acre cow-calf operation In East Texas 12,000 cow herd at peak One of 10 largest ranches in United States

Selling Equity – Two Key Questions Do I really want to do it? Positives: Frequently brings business expertise Built in source of future capital Might be only source if capital appetite is big Negatives Give up a share ownership – “dilution” Could lose operating control/independence Greater pressure to produce And, even if I do, can I? Maybe, maybe not Are you in an investment mainstream industry? Do you match the investment profile investors seek?

Equity Investor Types The “Three F’s” – Friends, Family, Fools Low-hanging fruit Angel Investors Has some potential for ag entrepreneurs Strategic Investors Definite potential for ag entrepreneurs Institutional Venture Capitalists Unlikely for ag entrepreneurs Crowdfunding/Crowdsourcing Maybe potential, but some pitfalls

Friends, Family, Fools Grandma is a soft touch Probably doesn’t care much about investment returns Not much money available Quick decision

Angel Investors Individuals Family Offices Affinity for your product/market sector? More money than Grandma? Can be bothersome Reasonably fast decisions Family Offices Industry affinity Substantial investment potential Tough to find/reach Groups – Acting More and More Like Institutions Industry specialization growing Larger investment size – $100,000 to several millions of $ Slower process – usually several months Intrusive, more demanding

Strategic Investors Companies with strategic mandate in your space Some/many have established investment strategy Usually millions of $ Preference for more mature companies

Institutional Venture Capitalists Tight industry investment preferences Looking to invest millions of $ Most avoid pre-revenue companies Looking for companies that can reach $50-$100 million in sales in five years or less Definitely intrusive Board seats Determine founders’ roles Control/influence structure, strategy, decisions

Crowdsourcing/Crowdfunding Tend to be project oriented Be careful with equity sales, SEC rules/regulations Pros and cons Companies targeting smallholders could appeal to “contributors” Relatively small amount of money per project Find an expert advisor/mentor

So … What Are Your Chances? Amount of Funding Ease of Obtaining Invest Pre- Revenues Odds of Funding FFF Small Easy Yes 100% Angels Small-Medium Moderate -Hard Sometimes Low - Medium Institutional VC's Large Difficult Seldom 0% - 3% Strategic Investors Low Crowdfunding Moderate Medium

Other Places To Look – Non-Dilutive Government Grants SBIR’s, etc. Foundations (e.g., Gates Foundation) Other non-profits Corporate research funding Debt Personal guarantees? Other