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Uber, Inc. Investment Briefing Deck August 2008 – Confidential –
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2 Executive Summary SPE has the opportunity to invest $1MM for a convertible note in an emerging digital publishing and platform company, Uber.com –Combines unique, easy-to-use publishing tools with a destination to discover content –Building off existing user base and expanding business models and use cases –Total bridge financing of $2MM; last equity round of $5.5MM in Q1 at value of $19.5MM SPE would also benefit through a direct relationship with company and management –Potential for SPT to sell ad inventory on Uber.com –Promotional opportunities through free fan site –Linkages with Crackle.com and other SPE sites –Management team and advisory board has deep media and technology experience Risks to the investment are partly offset by deals terms & structure –Converting at a discount and seniority over any follow-on debt help mitigate financial risk –Legal risk from UGC minimized by minority investor status and having UMG as investor –Additional analysis to be completed as part of diligence
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3 – Confidential – Overview of Uber.com New media platform combining art and engineering to provide users with simple yet robust web-publishing tools –Targets both prosumers and professionals –Service differentiated based on ease-of-use and artistic sensibility –Enables multi-media publishing (photos, videos, audio) to websites, profile pages, blogs Recently productized offerings and beginning to expand user base and use cases –Currently 2MM unique users with thousands of web sites operational –Leveraging social media (e.g., Facebook) and fan-based sites to drive growth –Diversifying revenue streams beyond advertising to include e-commerce & subscriptions Strong media and technology management and financial backing –Scott Sassa (CEO) is former President of NBC Entertainment and has previous experience with new media start-ups (Friendster) –Universal Music Group and Discovery are major investors and on advisory board Looking to raise $2MM in bridge financing between equity rounds –Other $1MM convertible note already committed by UMG and Sterling Stamos Co. –Last round of $5.5MM at $19.5MM valuation closed in Q1; expecting C Round by EOY –Most recent comparable transaction was purchase of Nexo by Shutterfly for $15MM
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4 – Confidential – Business Model and Growth Opportunities Business ModelsGrowth Opportunities Advertising Aggregate inventory across sites and organize based on category Special interest verticals to drive premium CPMs Subscriptions Premium tiers offering additional features Custom URLs without advertising and development tools for specific market segments Partnerships Enable partners to build-out social functionality Generate additional distribution / traffic E-Commerce Provide turnkey storefronts to allow users to sell products from their websites Uber to charge set-up fee plus % of transaction Core Business Continued growth in prosumers and professionals seeking low cost / high-quality, multi-media website solutions Expansion Potential Social Media: Provide tools to 3 rd party sites for users to customize their pages – Social networks (Facebook), photo sharing, auction sites, dating sites – Photobucket/MySpace was an early example Fan Sites & Contests: Capitalize on power of fans and further engage audience by giving tools & incentives to create their own fan sites – Jonas Brothers biggest fan contest – TV show and film fan sites often generate more traffic than “official” sites
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5 – Confidential – Cash Flow Forecast Estimated Cash on Hand ($000s) As ForecastWorst Case $2MM bridge loan takes company through April ’09 w/out any further financing C-round of at least $4MM expected by EOY; providing enough cash until company becomes cash- flow positive in December ‘09 If monthly cash burn rate remains at average historical levels ($600k), additional funding beyond $2MM bridge loan will be required by December If monthly cash burn does not improve, $4MM raise in December will only carry the company through July ‘09 Estimated C round of at least $4MM $2MM bridge financing
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6 – Confidential – Deal Terms & Next Steps $1MM convertible note with 1 year to maturity Interest at 6% compounded annually Coverts at discount (20%) to next equity round MFN relative to all previous and next round of investors Seniority to all subsequent debt Basic Equity Terms Additional Upside SPT to have first right of negotiation for ad sales on Uber sites Option for SPE to run fan site / contest (or comparable promotion) for theatrical title or TV show Option for Crackle to be cross-promoted on Uber sites and Crackle content to be available in Uber’s search functionality Next Steps Have agreed at high-level on non-binding term sheet Expecting to have final equity documents fully negotiated by the end of August Will follow-up with RAD once all material terms have been finalized and diligence completed
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7 – Confidential – Example Fan Site Unique and compelling opportunity to engage with existing fan base Fan created websites are ranked and shared with community Strong promotional value for SPE titles (theatrical and DVD release) and TV shows Potential integration with Crackle and use on other SPE sites
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8 – Confidential – Potential Risks and Mitigations RisksMitigations Company thinly capitalized Fixed assets not sufficient to cover existing, senior debt ($600k) Site leverages user generated content and could be exposed to copyright violations Risks to be further evaluated by SPE Legal as part of due diligence As an investor and advisory board member, UMG provided early validation of Uber approach Minority investor status limits shareholder liability Continued support from financial and strategic investors – UMG and Sterling Stamos re-upping Superior terms to equity – Note coverts at 20% discount to next round – Note senior to subsequent debt issuance In-kind value in addition to cash value – ROFN on ad sales – One free fan site / campaign – Ad inventory Financial Legal Limited tax diligence completed Global Tax Office to further evaluate risks as part of due diligence Current expectation is that this is not a taxable event Tax
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9 – Confidential – Appendix
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10 – Confidential – Traffic Trends and Revenue Forecasts Unique User Growth (000s) Actual Forecast Revenue Growth ($000s) Actual Forecast
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11 – Confidential – Cap Table
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12 – Confidential – Detailed Cash Flow Forecasts Worst Case Burn Rate: With C-round Mgmt Burn Rate: With C-Round Worst Case Burn Rate: Without C-Round Mgmt Burn Rate: Without C Round
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13 – Confidential – Balance Sheet
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14 – Confidential – 2007 - 2009 P&L
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15 – Confidential – 2007 P&L
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16 – Confidential – 2008 P&L
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17 – Confidential – 2009 P&L
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