Fundamentals of an Investor Pitch The material in this presentation is that of the presenter and does not necessarily represent the opinions of Deloitte Services LP or the Cleantech Open Steve Zam Zamierowski Tech-Venture Center Director Deloitte

Copyright © 2007 Deloitte Development LLC. All rights reserved.1 The Pitch 1.Title Slide 2.Market Problem 3.Solution and Technology 4.Business Model 5.Sales & Marketing Strategy 6.Competition 7.Management Team 8.Financials 9.Current Status 10. Sustainability & Close Sell the Story Get the Next Meeting

Copyright © 2007 Deloitte Development LLC. All rights reserved.2 Title Slide Introduce yourself to establish credibility Elevator Pitch –Macro Problem –Macro Solution The End Power supplies are in all electronics One tenth the size Half the cost Three times more reliable

Copyright © 2007 Deloitte Development LLC. All rights reserved.3 Initial Market Opportunity Macro Trends –Lighting is 20% of global energy usage –$20B A19 bulb market –Regulations forcing shift from incandescent –CFLs not meeting consumer requirements Problem/Opportunity –LEDs hold promise for replacement bulb market, BUT power supply is limiting factor Brightness limited to 60 watts Reliability Price

Copyright © 2007 Deloitte Development LLC. All rights reserved.4 Customer Requirements and Validation Bulb manufactures need LEDs – watt output –longer life –Less than 1 year RIO from energy savings LED lighting is the future; This technology is clearly a key enabler This could be very timely; power supply cost is becoming a major challenge, LED costs are declining but power supply components are already commoditized

Copyright © 2007 Deloitte Development LLC. All rights reserved.5 Solution 60 – 100 watt output –More space for heat sink Reliability –Elimination of the most common point of failure and life-limiter results in 3X life Cost –½ the components and no hand assembly leads to 50% reduction in cost –And customer RIO from energy savings of less than 1 year

Copyright © 2007 Deloitte Development LLC. All rights reserved.6 Technology/Invention Whats the underlying invention or breakthrough Is it patented What are the barriers to entry Speed (MHz) Integr ation Exclusive option to license 2 dominant VHF patents

Copyright © 2007 Deloitte Development LLC. All rights reserved.7 Market Size A19 Power Supply –Annual shipments of 450,000,000 A19 LED bulbs by 2013 (source) –ASP = $3 –Annual market = $1.35B OnChips product will increase demand

Copyright © 2007 Deloitte Development LLC. All rights reserved.8 Business Model What: power supplies to LED bulb manufactures –Outsourced manufacturing in existing semi fabs Who: initially to emerging innovators and then to established leaders How: Direct to manufacturers –Sales VP is key hire Price: $3.00 with 50% gross margin – Maintain 50% margin with price and costs fluctuations

Copyright © 2007 Deloitte Development LLC. All rights reserved.9 Focused Sales & Marketing Strategy Who will be your first customers –What market segment –How will you find them –How will you get there attention and time –Why will they buy from YOU How will those first customers lead to more

Copyright © 2007 Deloitte Development LLC. All rights reserved.10 Competition, now and anticipated Second most important customer benefit Most important customer benefit Them US Low High OnChip has three –Size –Reliability –Price

Copyright © 2007 Deloitte Development LLC. All rights reserved.11 Management Team (next 1-2 fundable events) Management Team –How each of them are qualified to accomplish specific tasks to reach your milestones –Wholes/Key Hires Advisory Team –Only active advisors –Get industry leaders involved

Copyright © 2007 Deloitte Development LLC. All rights reserved.12 Financial Projections (3-5 Years) Bottom Up, Not Top down Revenue = Units x ASP –Include number of customers/partners Costs include –Head Count: fully loaded Productivity assumptions –COGS –Cost of sales and marketing (2-3x expected) –Capital equipment and G&A Cash flow break even is not the main goal, being a market leader is. The specific numbers are less important than the assumptions!

Copyright © 2007 Deloitte Development LLC. All rights reserved.13 Status and Funding Requirement Honest assessment of product/service readiness Honest customer feedback or sales Capital amount being sought –Needs to take you to the next fundable milestone What that capital will fund –# months –Current and follow-on produce development –Key hires –Sales (# customers and revenue) Follow-on Funding and milestones

Copyright © 2007 Deloitte Development LLC. All rights reserved.14 Product Development Roadmap and Funding Q Prototype DC-DC LED Driver Engineering SamplesLED Driver Scale-up (bulbs) Laptop PS Product Devt Growth, Value A Round: $5 M 2015 LED Driver (fixtures) First Revenue from LED Driver Sales R&D Advanced Devices DC-DC Product Devt First Laptop Power Supply Sales Seed: $1.5M LED Driver Samples Available

Copyright © 2007 Deloitte Development LLC. All rights reserved.15 Close: Ask for the Sale! Environmental Stewardship: How will your company contribute to a healthier Earth? –Product/service impact OnChip: reduction 16% of energy usage and CO2 emissions by 470 million tons annually –Companys environment impact and use of natural resources – include in written plan Social Responsibility: include in written plan Ask the judges to make you a finalist –How will winning the Cleantech Open help get your company to the next milestone