1. Bridging the Valley of Death - Industrial Technologies 2012 by Ulla Brockenhuus-Schack 19.6.12

2. Introduction 1

3. 3 SEED Capital in brief The largest early stage venture fund in Denmark. –Government pre-seed funding €8-9 million / year –Traditional venture funds € 240 million (DKK 1,8b) under management 70 portfolio companies 11 positive exits and 1 IPO Attracted more than 320 million € (DKK 2,4b) to portfolio companies over the last 7 years Team of 20 of which 14 investment professionals with relevant domain knowledge

4. The Challenge: Crossing the valley of death 2

5. 5 Investment landscape Technology creation Market-Focused Business and Product development Commercialization Governement & pre-seed Seed & Business angels Venture CapitalStock Typical investors Time Cash flow Public SectorPrivate Sector Sales Valley of Death

6. Innovation Incubators: Goverment funded pre- seed investors 3

7. 7 Innovation Incubators in Denmark 6 Innovation Incubators have annual budget of €28m Purpose: Help universities and innovative entrepreneurs to select and commercialize high potential inventions and to assist them to grow and get further funded Invest up to € 800.000 in a single company applying traditional ‘venture capital methods’

8. 8 Applied ScienceStartups Innovation Incubator funding Additional CapitalGrowthAdditional capitalTaxes New Science Innovation Incubator Circle of life Government funds to Innovations Incubator is repaid 10 times

9. The SEED Capital business model - in cooperation with DTU Symbion Innovation A/S 4

10. 10 We work from research to venture DTU Symbion Innovation Government financed pre-seed funding Yearly investment budget of € 7m (+50 mDKK) Up to € 0,8m (6 mDKK) per project Dedicated team of 10 Investment Managers SEED Capital 6 partners responsible for DSI and 4 Venture Funds Pre-emptive investment rights from DSI Up to € 9m (68 mDKK) per project ResearchPre-seed Venture Capital Research DTU RISØ KU / KU-life ITU AAU SDU AU HS GTS: i.e. Delta & Bioneer

11. 11 to test team, IPR, technology development, market etc. and secures time to establish syndication for VC funding A unique selection process DTU Symbion Innovation Deal Sourcing Business Due Diligence Review Deal Sourcing Business Due Diligence Review SEED Investment SEED Capital SEED (option) IM investment 6-18 month “live” Due Diligence

12. 12 How we select investments 500 business proposals 100+ meetings 12-15 DTU Symbion Innovation investments 3-4 SEED Capital investments

13. 13 Investment sizes DTU Symbion Innovation Primary investment DTU Symbion Innovation Secondary investment SEED Capital Time 72% 40% 0,5 mio. € 0,3 mio. € 0,8 – 9 mio. € Public funding Private funding

14. 14 Closely linked to Denmarks largest Incubator - Accelerace 14 ** - Survey from 2010* - inkl. Gazellegrowth, Bio, Spin- off 155 companies emerged from Accelerace 97% are still active

15. 15 Partners Operational Entrepreneurial Executive Investment Consulting Transaction Board Private Equity Experience

16. 16 We are never better than our organization Investment team –One location –Domain knowledge –Clear goals and incentives –Investments management procedures well established –12 module VC training program developed in-house + EVCA courses

17. 17 Strong international syndication Abbott US Accel LN Aravis CH Astellas US/JA BioFund FI Captricorn B Coloplast Conduit UK DeNovo US EGJ DK Faurecia F Ferd N InnFond Inventages CH IVS/Northcap Lundbeck Foundation Merck Serono CH Navistar US Nestle CH Nordea Foundation Northzone Novartis Venture Novo SEED Novo Ventures DK Pferd N REW DE Seventure FR Solvay B Sunstone TMP US Vecata Vækstfonden YasudaJP Business angels (50+)

18. 18 Case: Technology removing NOx from diesel emission. Building on legislature now being passed in US and EU on NOx emission control. Technological foundation developed at DTU Innovation Incubator investment SEED Capital Investment 2010 Partnership with Navistar 2011 Partnership with Faurecia 2004

19. Results 5

20. 20 DKK 2.4 bn Private Funding (9x) Note: Exluding funding to Symbion Capital portfolio worth 1 b DKK (primarily Evolva)

21. 21 Documented strong performance DSI very strong performance compared to other Innovation Incubators Outperforms other Innovation incubators on capital attracted by a factor 9 Shows highest return on investment From 2007 to 2010 –Portfolio turnover grew from € 110.000 to € 400.000 –Portfolio employees grew from 3 to 7

22. 22 Significant value has been built in notorious difficult segment Jan 2005- Juni 2011 (mDKK) AntalCostProceed / fair value Gev./ Tab Exits: Sold Co’s w multipel >1x11*1679+63 Sold Co’s w multipel 0,5x-1x486-2 Sold / closed Co’s w multiple <0,5x73995-94 8812390-33 Active Co’s: Co’s with Funding from SEED164889+41 Other active Co’s49104 0 65151192+41 Total153274282+8

23. 23 Contact details Ulla Brockenhuus-Scahck Managing Partner SEED Capital Denmark Diplomvej 381 DK-2800 Kgs. Lyngby T: (+45) 2082 8374 ubs@seedcapital.dk Thank You