Ignite Your Venture Webcast Series Every Wednesday In April, 2-3 PM EST April 7 – Bringing Your Ideas to Life with a VC April 14 – Finding the Right People to Make the Right Team April 21 – Helping to Increase Profits & Accelerate Sales April 28 – Business Lead Generation That Works Microsoft does not endorse any of the participants in this webcast or their software, solutions or services. Microsoft disclaims any and all liability arising out of your use of information contained this webcast. Twitter: #IYV

Angie Lim Channel Audience Manager Microsoft Partner Network Startup ISV & Web Developers Twitter: #IYV

Bring your ideas to life with a venture capitalist Presented by: Alkarim Jivraj, Intrepid Business Acceleration Fund & Firas Raouf, OpenView Venture Partners April 7, 2010

Presenting funds Bring your ideas to life with a venture capitalist 4 | Intrepid Business Acceleration Fund ( Alkarim Jivraj, Founder & Managing Partner Alkarim is the Founder & Managing Partner of Intrepid Business Acceleration Fund, a Toronto-based, early stage software fund, and also a Managing Partner of Intrepid Equity, a venture advisory practice. Alkarim has completed over 100 fundraising transactions for emerging growth companies and raised over $1 billion in capital. Prior to founding Intrepid, Alkarim was a member of the senior leadership team at Yorkton Securities. OpenView Venture Partners ( Firas Raouf, Co-founder & Venture Partner Firas Raouf is a Venture Partner with Boston-based OpenView Venture Partners, an expansion stage software fund. Prior to co-founding OpenView, Firas was a Venture Partner at Insight Venture Partners. Firas has extensive operational experience. He was the co-founder and Chief Operating Officer of eEye Digital Security. Prior to eEye, Mr. Raouf was a senior consultant at Booz Allen & Hamilton, and prior to that, was a member of the Advanced Manufacturing Technology Group at Eli Lilly & Co. - responsible for research, development and deployment of new process technologies.

Venture capital in context Venture capital < ½ percent of GDP – $20 billion annual in US – $1 billion in Canada Transformative impact on business/society Bring your ideas to life with a venture capitalist 5 |

Notable Canadian venture wins Bring your ideas to life with a venture capitalist 6 |

Venture capital = RISK capital Traditional role of the VC – Source deals that will generate BIG returns – Manage portfolio RISK – Improve investee capital efficiency Bring your ideas to life with a venture capitalist

Returns need to justify RISK Target returns (multiple of invested capital) – 10x for early stage – 5x for expansion stage – 3x for late stage Bring your ideas to life with a venture capitalist

Venture capital math - illustration $10 million invested = 50% VC ownership 10x desired capital returns = $200 million exit Assume exit at 3x revenue Assume 15% company market share at exit Market size needs to be $500 million Bring your ideas to life with a venture capitalist

Only the best get funded Venture capital is highly competitive – 1000 inquiries – 100 business plans reviewed – 1 company is funded Bring your ideas to life with a venture capitalist

Different flavours of venture capital Start with targeting the right funds – Stage/sector specialization – Geographic focus – Investment styles/value-add capacity – Reputation & track record Bring your ideas to life with a venture capitalist

First impressions Warm introduction = warm reception Impressions matter – Preparation – Get advice/help Bring your ideas to life with a venture capitalist

Building a relationship Think of it as a long sales cycle – Spend time on “discovery” – Seek to advance relationship with every contact – Have a plan for each call/meeting – Solicit feedback/coaching – Keep in touch/repeat Bring your ideas to life with a venture capitalist

The pitch Demonstrate deep market insights How your solution works/differentiation Distribution model & economics Milestones you’ve achieved Bring your ideas to life with a venture capitalist

Diligence materials Market research/analysis Strategic priorities Functional (e.g. development) plans/reports Financial budget/actual results Sales pipeline Collaterals, contracts, etc. Bring your ideas to life with a venture capitalist

What VCs look for in prospect companies

The ideal prospect has… A differentiated solution... that addresses a critical customer pain point... in a very big market... sold through a profitable distribution model... resulting in a company that can scale with capital efficiency Bring your ideas to life with a venture capitalist

Differentiated solution It is NOT about technology… it is NOT about architecture… it is NOT about bits and bytes… It is ALL about how your solution solves a customer problem in the way the customer wants it solved When pitching VCs, talk about your customer persona and the use case… Why YOU! Bring your ideas to life with a venture capitalist

Customer pain point In due diligence, we call your customers and ask: “did you have to buy the solution? And how often do you use it? And what would you do without it” We also call prospects that didn’t buy to understand why We try to figure out if you can cross the chasm Bring your ideas to life with a venture capitalist

Big market Your market is not the billion dollar market Gartner says it is… You won’t fool us with market research. Your market = Total prospects that match your current customer profile x your capacity to acquire customers x average sales price Bring your ideas to life with a venture capitalist

Find the path to profitable distribution Start with how the customer wants to buy… Don’t force the customer to buy the way you want him to For SaaS, profitable distribution means a dollar in sales/marketing should generate 1x in new customer bookings in year 1 For perpetual licenses, 2-3x Bring your ideas to life with a venture capitalist

Capital efficiency If you can’t scale your business with capital efficiency, don’t scale your business VC money is Very expensive VC money gets dramatically more expensive if things don’t go to plan, so don’t over promise Bring your ideas to life with a venture capitalist

© 2009 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentations. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION. Alkarim Jivraj Intrepid Business Acceleration Fund +1 (647) Firas Raouf OpenView Venture Partners +1 (617)

© 2009 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentations. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION. Questions? Twitter: #IYV

Ignite Your Venture Webcast Series Every Wednesday In April, 2-3 PM EST April 14 – Finding the Right People to Make the Right Team April 21 – Helping to Increase Profits & Accelerate Sales April 28 – Business Lead Generation That Works Microsoft does not endorse any of the participants in this webcast or their software, solutions or services. Microsoft disclaims any and all liability arising out of your use of information contained this webcast. Twitter: #IYV