1 Seed Capital Fund Shay Garvey 5th October 2011

2 InishTech Delta at a Glance Vintage Year TeamKenny Kenny, Garvey, Roche Kenny, Garvey, Roche, Berkery Kenny, Garvey, Roche, Berkery, Mason, Johnson, O’Sullivan Fund Size$3m$11m€29m€13m€90m€105m Focus Life sciences Early stage tech (ICT and Life Sciences) Development capital Early stage tech (ICT and Life Sciences) Development capital Early stage tech (ICT and Life Sciences) Development capital Early stage tech (ICT and Life Sciences) Early stage tech (ICT and Medtech) # investments ~25 Beta Delta I BIEF Delta II Delta III Plus: New Seed Fund

3 New Seed Fund (BOISES) €17m sponsored by BOI and EI Many investments of up to ~€600,000 Focused to a large degree on HPSU-type companies Aimed to be invested quickly over the next 2-3 years Basic criteria: – Good people – Business concepts that can get to revenue fairly quickly – Not capital consumptive companies – Our capital can last 12+ months

4 Old World of Technology Investing Startup Exit Expansion Early lighthouse customers Beta product Stage 3 Stage 2 Stage 1 Stage 4 Seed round investment Third round Second round First round Investors committed for long haul Big, upfront bet on market Different roles for different investors along the way

5 New world of investing Startup Proven consumer proposition/business model Expansion Stage 2 Very small seed rounds ‘Giving it a go’ is cheap: Technology / cloud Early market impact Lots of try-it-and-see seed investments Then big expansion rounds in winners at high valuations Stage 1

6 Key ingredients of a seed investment Small amount of capital; essentially a valuable option Major proof points can be achieved  # 1: cost of acquiring a customer is a lot less than value of customer  #2: lots of potential customers  And many other proof points………..  A workable, sensible business model lies ahead  Not an arms race versus other well capitalised competitors So….design your seed plan around gathering proof

7 Meeting a VC – How it works Meet someone from Delta at event or ask someone to introduce you or cold call us Typically provide us with a short summary If within our range of interest, you will meet with one of the Delta team If that person finds it interesting, then generally meet larger group of Delta team If still interesting, we start doing basic DD – some calls, some desk research Then, peel back the onion on DD Eventually leading to a term sheet (4+ weeks) and legals (another 4+ weeks)

8 What’s Going on in Investor’s Head at First Meeting When the investor meets you, they are (almost) as keen to invest as you are to get investment Investor goes through a really quick mental assessment (good person with real depth? interesting / different angle on market? Something defensible? big market?) Most important – can I deal with this person for next X years? Will they listen? Are they adaptable? Will they give it straight? If quick assessment is positive, then investor moves onto gathering evidence to prove the case to themselves and colleagues. Hard to turn a ‘no’ into a ‘yes’. Don’t try. At end of first meeting, if it looks somewhat promising, then ask the investor: ‘what would I need to convince you of?’

9 Hardest Part of VC’s Life ……… Typical Situation Sales below target, but pipeline ok Team a bit deflated Rumblings at the board Cash almost gone No new investors willing to invest But, market opportunity months away looks good Lemons ripen early Every company goes through valley of death ? Follow your money

10 What should a promoter look for in a VC? Legs Deep pockets to fund your ambition Arms Strong trade and investment links/network MindVision/common purpose Strong analytical skills/corporate governance HeartA friend when the going gets tough The Full Body VC

11 A Good Time to be Starting a Company New seed funds Right time in business cycle Cost base for labour, rent, etc lower Technology costs almost irrelevant Lots of help available No jobs available anyway!

12 Delta Partners We are interested in talking to backable people with interesting businesses/business ideas. Shay Garvey Delta Partners Media House South County Business Park Leopardstown Dublin 18 Ph: Fax: Web: