VENTURE CAPITAL ANDREW FARQUHARSON

2 Actively investing money in young companies to catalyze their growth Examples of VC-backed ventures: What Is Venture Capital?

3 Entrepreneurship: Hallucination or Vision? If you can’t convince others to share your vision and to start allocating resources toward it, you’re wasting your time. Probably.

4 No one builds a company alone Innovation comes from the collision of ideas It’s hard to win in business. A team of A players will be about 10X as productive as a team of B players Top performers have fun together Marketing and engineering need to integrate People Matter

5 Operon: sold for $150M Made-to-order custom DNA synthesis No VC Funding – raised $200K from angels Not every company needs Venture Capital

6 What VCs Look For Opportunities that offer large returns Markets that are larger than $500M Credible founders Obvious commitment to the venture Competitive advantages Exit horizon makes sense Right corporate structure No surprises in diligence Good chemistry with entrepreneurs

7 Entrepreneurs Mindset: see no problems – only opportunities Unrealistic value expectations Short-term view of financing Do not prioritize investor returns Want to maintain control View the business personally Investors Mindset: focused on IRR and multiples of capital View management, clinical & financing as major risks Considers ownership important for all parties Control by outside board Want early exits Founders and VCs

8 1.Valuation expectations 2.No skin in the game 3.Wrong team/advisors 4.Defensive, poor listeners 5.Overhype 6.Claim no competition 7.Paranoid about confidentiality 8.Fall in love with technology 9.See a milestone “just around the corner” 10.Sell the product, not the investment Entrepreneur’s rose- colored glasses Spectacles worn by a serial investor Top Fundraising Mistakes By Founders

9 Why Did I Enter Venture Capital?

10 Today, billions suffer one or more chronic diseases

11 Pharmacologic Therapy for Epilepsy Treats underlying pathology without sedation Senses and prevents seizure progression Delivers drug over 5 years Current drug market: $16B/year Market 3M patients suffer from Epilepsy in the US Assuming $30,000/device and 100,000 patients/year: US market is about $2B Similar market sizes exist outside of the US Market 3M patients suffer from Epilepsy in the US Assuming $30,000/device and 100,000 patients/year: US market is about $2B Similar market sizes exist outside of the US

THANK YOU ANDREW FARQUHARSON 12