1. - 1 - © 1999 Boston Millennia Partners Millennia Boston Millennia Partners 30 Rowes Wharf Boston, MA 02110 Tel. 617 428-5150 Fax 617 428-5160 www.millenniapartners.com Introduction to Venture Capital Tufts University A. Dana Callow, Jr. Managing Partner Boston Millennia Partners November 3, 2005

2. - 2 - © 2004 Boston Millennia Partners Agenda l Background l What does a VC do? l What is the Millennia Investment Strategy? l Current Venture Statistics

3. - 3 - © 2004 Boston Millennia Partners A. Dana Callow, Jr. Background/Timeline l Director of Jobs for Massachusetts l Board of Trustees at Tufts University l Board of Overseers at Tufts University Medical School l Board of The Center for Private Equity and Entrepreneurship at the Amos Tuck School of Business at Dartmouth College Founded Boston Millennia Partners (1996) Co-founded Boston Capital Ventures (1982) Senior Consultant at Braxton Associates (Deloitte Touche) - (1979-1983) Application Engineer for Tymshare (acquired by McDonnell-Douglas)- (1974-1977) Graduated from Tufts University Graduated with MBA from Tuck School at Dartmouth College 1973200319981993198819831978

4. - 4 - © 2004 Boston Millennia Partners Boston Millennia Partners Overview l Background s A U.S. private equity partnership specializing in healthcare and life sciences, telecommunications, and information technology investments s 100+ years of collective experience blending venture capital, operational and strategic consulting experience s Lead 80% of investment opportunities with an emphasis on business building s Investment size: $1-15M l Millennia Management Team s 15 private equity investment professionals s Dedicated executive search partner s $700+ million in capital managed s 100+ direct private equity transactions completed s 170+ acquisitions completed by portfolio company managements l Core Company Strategy and Active Value-Added Style s Focus on early-stage companies applying proven technology s Identify companies targeting large, fast growing market segments s Invest in strong management teams with outstanding track records s Support portfolio company growth with strategic merger and acquisition activity s Strategic planning and research support

5. - 5 - © 2004 Boston Millennia Partners Millennia Partners’ (Sold to Incyte Genomics, 12/00) (IPO: 1/97) HealthcareInformation TechnologyBusiness Services Portfolio of Investments (Sold to Oxford Health Plans, 3/02) (Sold to Cedara Software, 10/04) (IPO: 2/00) (IPO: 8/99) (IPO: 12/99; Sold to GSI Commerce) (IPO: 5/98) (PowerFone) (Brooks Fiber Properties) Neoworld (Sold to Nextel Communications, 8/02) (IPO: 2/00; Sold to SPSS) (IPO: 3/99)

6. - 6 - © 2004 Boston Millennia Partners Agenda l Background l What does a VC do? l What is the Millennia Investment Strategy? l Current Venture Statistics

7. - 7 - © 2004 Boston Millennia Partners What is Venture Capital? … Investing in high potential, high growth private companies … Identifying and assisting talented entrepreneurs as they build successful companies … Helping to drive growth, productivity, and technological innovation Venture Capital Is...

8. - 8 - © 2004 Boston Millennia Partners VC Value Chain (1) Raise Capital (2) Evaluate Market Segments (3) Generate Deal Flow (4) Select Investment Candidates (5) Negotiate and Structure Investments (6) Nurture Portfolio Companies (7) Liquidate / Sell Portfolio Companies

9. - 9 - © 2004 Boston Millennia Partners Venture Capital Investment Path l Boston Millennia Partners Proprietary Research s Identification of attractive sectors and investment opportunities l Source deals and initially screen opportunities l Meet with management team of potential investment l Partner meeting and further screening l Due diligence begins l Prepare formal Investment Opportunity Summary (IOS) memorandum l IOS partners meeting and investment decision l Term Sheet submission l Legal negotiations l Co-investor syndicate selection l Due diligence checklist completed l Investment closing l Active investment management Ongoing Week 1 Months 2-4

10. - 10 - © 2004 Boston Millennia Partners Agenda l Background l What does a VC do? l What is the Millennia Investment Strategy? l Current Venture Statistics

11. - 11 - © 2004 Boston Millennia Partners l Identify sectors with the following characteristics s Large, high-growth market opportunity s Competition is made up of many small companies with no dominant market-share leader s Undergoing a fundamental shift in the business as a result of economic or technological change l Identify initial company upon which to grow the business s Focus on companies that have meaningful revenues s Identify the company best positioned to exploit the market opportunity s Select a management team capable of carrying out an aggressive growth plan l Accelerate the company’s growth through acquisition and consolidation of smaller-sized companies Boston Millennia Partners’ Investment Model With the goal of building a $750 million market capitalization company Core Company Strategy

12. - 12 - © 2004 Boston Millennia Partners Clinical Research Organizations: Growth Rate versus Relative Market Share: 1985-1986 = $10 M in 1986 projected revenue Relative Market Share Revenue Growth Rate 0% 5% 20% 25% 30% 50% 0.01x0.1x1x2x Oxford Research International 10% 15% 35% 40% 45% IBRD G.H. Besselaar Associates (Covance) Medical & Technical Research Associates Pharmakinetics Labs Harris Labs Biometric Research Institute PAREXEL PACT CLINDAR OTHERS (In-house, Universities, Hospitals, Mom-and-Pops) Sector Growth = 15% Portfolio Company Development: Completed Case Emerging Industry Stage

13. - 13 - © 2004 Boston Millennia Partners Portfolio Company Development: Completed Case l Millennia managers developed a Core Company through internal growth and strategic acquisition and consolidation: s Expanded product and service offerings s Leveraged value through efficiency gains s Built market share and profitability s Broadened geographic presence s Entered new market segments PAREXEL International Corporation PAREXEL is a leading contract research organization serving pharmaceutical and drug development companies worldwide. Research Publishing Regulatory Biostatistics (CSI, Inc.) Medical Affairs Information Technology Marketing Boston United Kingdom Germany France Italy California North Carolina Objective: FDA Approved Drug AcquisitionsOriginal Investment Related Functions Key: Business Segment Location s Revenues: s Market Capitalization: s Employees Worldwide: s Number of Acquisitions: $ 658 M $ 508 M 5,000 29 $ 0.1 M $ 1 M 5 0 At InvestmentCurrent l Role: Originator & Lead s Investment Amount: s Realized Value: $ 2.8 M $ 38.6 M

14. - 14 - © 2004 Boston Millennia Partners Agenda l Background l What does a VC do? l What is the Millennia Investment Strategy? l Current Venture Statistics

15. - 15 - © 2004 Boston Millennia Partners VC Industry: Where were we in 2002?

16. - 16 - © 2004 Boston Millennia Partners Venture Capital Activities: 5 Year Summary l 1999-2000 investment frenzy in all market segments s IPO expectations and new business models based on internet and Y2K impact l 2001-2003 s The “hangover” and clean-up/downsizing of many portfolio company investments s Negative 1st quartile returns s Late 2003-4 s Continued clean-up: The “walking wounded” survive s The beginning of new company investing s Fresh fundraising attempted on a broader scale s 2005 s Increasing liquidity with selected IPOs and M&A activity s Stable investment activity s Capital “overhang” period ended l 2006 – Forward s Venture returns regain top place in IRRs but with significant variability among managers s 1st quartile returns significantly positive and less correlated with public markets s Reduced start-up and early stage investment capital

17. - 17 - © 2004 Boston Millennia Partners VC Industry: Where are we in 2005?

18. - 18 - © 2004 Boston Millennia Partners Historical “Take-off Periods” For Value Creation After initial investment in early stage venture investing 1x 5x 10x 123456789101112 1997-2003 1985-19972003-2010 Years Company “Value”

19. - 19 - © 2004 Boston Millennia Partners Commitments to U.S. VC funds l Fundraising is stabilizing Source: VentureSource/Venture One * Annualized 3Q 2005 *

20. - 20 - © 2004 Boston Millennia Partners U.S. Venture Capital Investment Activity Source: NVCA / Venture Economics * Annualized 3Q 2005 l Investment is stabilizing

21. IPO Exits as a Percentage of Total Financings are Decreasing l 372 Venture-backed IPO's between 2000 and 2005 – but only 128 during last 3 years * (%) is defined as # of IPOs in Year x+4 / No. of Investments in Year x (A rough gauge for how many of Year x’s Venture Capital Financings go on to an IPO in four years.) ** Annualized Q3 2004 Source: VentureSource/VentureOne, PWC/Venture Economics ** Number of Deals (7.0%) * (19.0%) (10.6%) (1.0%) (0.8%) (0.5%) (1.1%) - 21 - Millennia Partners Confidential (1.2%)

22. - 22 - © 2004 Boston Millennia Partners IPO Companies Older in 2003 Time from Initial Equity Funding to IPO Older Companies Going Public - Years to IPO Increases Source: VentureOne l In 2005, the average IPO is for a five and a half-year-old company