1. 1 Comerica/Global Software Event March 31, 2004 Nuity Systems

2. 2 Background Nuity Systems is focused on providing high availability solutions for Microsoft infrastructure which assure business continuity from the perspective of end users. Steve Lewis, President and CEO – 24 years in technology – Three venture backed start ups: Pharmanex, All Bases Covered, and Nuity Systems – $125MM raised in 9 separate financing events from over 15 venture funds

3. 3 First Principles – what is the winning formula from the venture community’s perspective? Market – proven, large, and willing to buy from smaller, new company. Companies with great markets, even if they have mediocre teams, still usually win. Team – proven executives and other key personnel at every level. Companies with great teams usually win, if they also have a great market opportunity. Without a great market opportunity, even the best team will fail. Compelling operating economics – low burn and as cost- effective an operation as possible. Competitive economics through the channel – painless ASP for your customers, attractive channel margins, and gross margins that make your own business competitive over the long term.

4. 4 Use a proven analog – the hybridized Israeli model may work for Finnish companies Proven technology team in another country (in this case Finland) driving leading edge technology. Repositioning the company as a US company! – US Delaware C-corporation – US GAAP accounting – Clear footprint in the US ideally in the same metropolitan area as your target venture investors Where the management team can clearly articulate the advantages of being a hybridized company. – Finnish presence provides access to unique technology team... – Geographic positioning provides strong access to EU... – Now putting in place US footprint to globalize...

5. 5 Recognize what drives your funding audience The essential elements must be in place. – Market – Team – Competitive long run operating economics Invention risk must be removed. Absolute dollar returns must be extraordinary. – Providing a very large absolute dollar return, not just a high IRR – No venture firm will invest if the absolute dollar return per GP isn’t sufficiently attractive – If the VC firm invests $10M and makes $110M, each GP makes $4MM (i.e., ($110MM - $10MM) * 20% ÷ 5 = $4MM) Interact with the company must be relatively painless. – No one’s going to Finland

6. 6 Packaging is a proxy for clarity of thought Articulate the company in one paragraph or less. Know the customer, competitors, and channels. – Interview target customers even if you don’t have a product yet – Comprehensive competitive analysis of direct, adjacent and future potential competitors is a must – You’re almost assuredly going through channels so you better know what channels and have talked to a representative sample Explain it in a PPT of no more than 15 slides. – With detailed appendices on everything Conservatism sells.