1. 1 SINET Showcase 2011 A view from 3000 Sand Hill Road Gerald Brady Head of Entrepreneur Services Group

2. 2 SVB - Focused on one thing 2 Banking the innovation economy

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4. 4 Some numbers from a banker – of course! 4 47% 1 in 6 $5.9m £27bn Sources: National Cyber Security Alliance; Help Net Security; Ponemon Institute; Detica

5. 5 Mega-trends drive disruption 5 Countries need to drive: Growth Employment Innovation Wealth creation Mega-trends: Globalization Shift to knowledge based economies Globally mobile workforce Globally connected (everyone to everything) Companies are impacted by: Traditional innovation models Exponential innovation Pressure on growth China moving up the value chain

6. 6 Innovation, Capital Markets and Growth

7. 7 Innovation is back on the CEO’s agenda…

8. 8 Companies are talking-up their innovation activities 8

9. 9 And not to be outdone…. 9

10. 10 And in pharma: 10

11. 11 And at P&G 11

12. 12 The sell-side is also talking about innovation 12 However, given the speed at which the innovation curve continues to progress, new entrants with new products and redefined business models also have a chance to succeed, re-shaping profit pools across the industry. This is all the more so given a well funded venture capital industry (staffed with industry veterans), creating dilemmas for the leaders of the past and a driving force for deal-making activity: ‘Invent or Dent’: If you cannot innovate, dent your balance sheet to procure innovation. This is either a defensive strategy (to fend off disruptive threats) or an offensive strategy (to pursue new areas of growth). ‘Reply or Die’: If something new is about to supersede your approach, swallow the threat early. Otherwise, your own historical growth profile will turn into another company’s future growth. ‘Corroborate or commiserate’: Consolidate to sustain your and your partners’ innovation paths, especially when well-funded competitors can cyclically outspend you.

13. 13 Corporate innovation is different this time 13 Internally focused Driven by R&D Evolution NOT Revolution Cost not outcome focused Little correlation with Corporate Venture Capital Internally focused Isolated / little correlation with CVC Cost not outcome focused Evolution NOT Revolution Driven by R&D Internally focused Driven by R&D Evolution NOT Revolution Cost not outcome focused Little correlation with Corporate Venture Capital Greater external focus Innovation partnering (VC, M&A, JVs & licensing) Outcome driven Open to cannibalization CEO / Chief Innovation Officer led Traditional corporate Innovation The new model for corporate innovation

14. 14 Companies’ are tracking the innovation landscape Mature Disruptive trends, white spaces & roadmaps Corporate VC M&A Partnering Distribution Venture Portfolio: Segmentation by company stage Growth Start-ups

15. 15 Start-up formation remains robust in Silicon Valley 15 Q32011: No summer slow down – 2 nd highest new account openings

16. 16 SVB’s: At the center of the innovation economy 16 SVB VCs Portfolio companies Corporates Global innovation centers SVB’s Role Positioned like Switzerland Neutral about: - Investors - Location - Stage - Sector Able to connect: Corporate Companies Corporate VCs Corporate Corporate

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