1. © vSpring Capital, 7/15/04 All Rights Reserved. July 15, 2004 Introduction to vSpring Mike Connolly

2. 2 © vSpring Capital, March 26, 2004 All Rights Reserved. Firm Overview  Offices: Salt Lake City, Los Alamos  Fund I: $120M, established in 2000 Top quartile performance 24 portfolio companies 3 exits to date (2 acquisitions, 1 IPO) several others profitable / poised for exit  Fund II: $150M target beginning to invest final close this fall

3. 3 © vSpring Capital, March 26, 2004 All Rights Reserved. "Typical" deal profile  Early-stage  Focus: IT & life sciences but will consider promising opportunities in any area, e.g. energy, nanotech, security, communications  Region: 75% of deals within Utah or NM  Lead investor recruit strong co-investors for funding continuum  Pre-money valuation < $6M (typical, but varies widely)  Initial investment of $1-2M and ownership >20% (" " " ") will make smaller seed investments in select cases deploy $4-6M over life of deal (i.e. prior to exit)

4. 4 © vSpring Capital, March 26, 2004 All Rights Reserved. How do we assess an opportunity?  Market Large market size and market pain Pros/cons of each competing solutions -- available or under dvlpt  Management Passionate entrepreneur -- experienced or coach-able We can help recruit other key players  Technology Risk that it will work vs. investment required to find out Strength of proprietary position  Financial Attractive valuation Ability to attract quality co-investors as needed/appropriate

5. 5 © vSpring Capital, March 26, 2004 All Rights Reserved. New Mexico activities  Los Alamos office opened 8/03 by vSpring founder Paul Ahlstrom and associate Clarke Miyasaki Mike Connolly assumed primary responsibility in 5/04 (continue to be assisted by Paul/Clarke)  2 NM investments to date Exagen Diagnostics -- $5.4M round 1/04 –prognostic cancer tests using genomic markers Protalex -- led $12.7M round 9/03 –therapeutic drugs for autoimmune disease additional opportunities in diligence

6. 6 © vSpring Capital, March 26, 2004 All Rights Reserved. The vSpring Team  Extensive start-up / operating experience  Strong and broad industry relationships  Deep domain knowledge  Stable team with successful history of working together  High ratio of professionals to funds under management Individual attention to companies

7. 7 © vSpring Capital, March 26, 2004 All Rights Reserved. Directors/Principal are successful serial entrepreneurs Paul AhlstromFounder/CEO of Knowlix -- acq'd by Peregrine Systems Chair of Utah Technology Alliance Ed EkstromFounder of Cericor -- acq'd by HP Intel VP; Chairman of Utah IT Assoc. Dinesh PatelCofounder/CEO of TheraTech -- acq'd by Watson Pharm Cofounder/Chair of Salus Therapeutics -- acq'd by Genta Scott PettyCOO of Zuka Juice -- acq'd by Jamba Juice Bain & Co. Greg WarnockFounded Precision Data Link -- acq'd by Profit Recovery Founder of Advion BioScience, Texsem Labs Mike Connolly  

8. 8 © vSpring Capital, March 26, 2004 All Rights Reserved. Mike Connolly, Principal in New Mexico office Experience Cofounded 7 biomedical companies worth >$400M –Novacept acquired for $325M –Cohesion acquired for $40M Tech Commercialization Executive at Los Alamos Nat'l Lab –Founded Tech Mat Fund -- an internal “venture” fund to mature early-stage Lab technologies with strong commercial potential Navy officer (Lt. Commander) for 7 years Taught physics at U.S. Naval Academy for 3 years Licensed Professional Engineer (P.E.) Education Stanford MBA, M.I.T. MSME, Naval Academy BSME

9. 9 © vSpring Capital, March 26, 2004 All Rights Reserved. Strong support team of investment professionals  JD Gardner, Associate Goldman Sachs, McKinsey, Harvard MBA  Clarke Miyasaki, Associate Ford Motors, Freeport, Connect2.com  Gavin Christensen, Associate Monitor Group, Fidelity Investments  Ken Krull, Associate Knowlix, Folio, Trend Micro  Matt Hoffman, Analyst  Dennis Wood, Director of Human Capital Diestel Group, Prince Perelson & Assoc.  David Anderson, CFO Ernst & Young, CFO of 3 prior cos.

10. 10 © vSpring Capital, March 26, 2004 All Rights Reserved. Utah market in 1990’s Few early-stage investments; disconnected angel community Unsophisticated entrepreneurs. Lack of qualified management. Infrastructure gaps, e.g. legal Not leveraging research institutions Need for community development vSpring contribution  Partners brought deep experience in both operations & angel investing  Active mentoring of entrepreneurs throughout investment process  Hired top recruiter in Utah to assist portfolio companies  Recruited Wilson Sonsini to Utah  Partners experienced in tech transfer  Aided UTA, et. al. reg'l dvlpt orgs Emerging Markets: Utah in 1990s ~ NM in 2000s

11. 11 © vSpring Capital, March 26, 2004 All Rights Reserved. Portfolio value-add: management recruiting  17 senior execs (CEO, CTO, CFO)  17 vice presidents  10 other company positions  12 board of directors

12. 12 © vSpring Capital, March 26, 2004 All Rights Reserved. Portfolio value-add: co-investor network

13. 13 © vSpring Capital, March 26, 2004 All Rights Reserved. For more info www.vspring.com 1200 Trinity Drive, Suite 420 (in Los Alamos National Bank bldg.) Los Alamos, NM 87544 tel: 505.663.4030 fax: 505.663.4034 Mike Connolly mike@vspring.com mike@vspring.com