Family and friends Funding to grow business sufficiently to outsiders First step towards exposing business to investors Angel Give money without expecting much returns May invest in idea/ plan, but for smaller amount of money Some are professional angels – assist in developing business and access to further funding Venture capital The “real” thing

Family and friends

Funding to grow business sufficiently to outsiders

First step towards exposing business to investors

Angel

Give money without expecting much returns

May invest in idea/ plan, but for smaller amount of money

Some are professional angels – assist in developing business and access to further funding

Venture capital

The “real” thing

Equity investor (Cash for Shares) Early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company Compliment bank lending/facilities to finance innovative (high-risk) SMEs at various stages of life cycle (seed to expansion/late) Provide alternative source of financing especially for early stage SMEs in ICT sector, biotech, .. Enhance “bankability” of SMEs, entrepreneurship, corporate governance, marketing, product development and technology enhancement.

Equity investor (Cash for Shares)

Early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company

Compliment bank lending/facilities to finance innovative (high-risk) SMEs at various stages of life cycle (seed to expansion/late)

Provide alternative source of financing especially for early stage SMEs in ICT sector, biotech, ..

Enhance “bankability” of SMEs, entrepreneurship, corporate governance, marketing, product development and technology enhancement.

New companies with limited operating history Too small to raise capital in the public markets Too immature to secure a bank loan or complete a debt offering. In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, venture capitalists usually get significant control over company decisions, in addition to a significant portion of the company's ownership (and consequently value).

New companies with limited operating history

Too small to raise capital in the public markets

Too immature to secure a bank loan or complete a debt offering.

In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, venture capitalists usually get significant control over company decisions, in addition to a significant portion of the company's ownership (and consequently value).

Market Expansion Product Expansion Listing or Sale Commercialization TIME Concept Alpha Beta Early Adopter Seed Early Expansion Late FUNDING (RM) <2M Pre-Seed <50K Co Formation 3-6 months 12-24 months 24-60 months

Preferably when there is more than idea to fund – funding of ideas only works in US Pre-seed or research money is the first step – not necessarily VC funding VCs are in no hurry to invest: Intro-to-investment may take 3 – 12 months Try to develop a relationship with a VC with the intention of talking about the investment in the future

Preferably when there is more than idea to fund – funding of ideas only works in US

Pre-seed or research money is the first step – not necessarily VC funding

VCs are in no hurry to invest: Intro-to-investment may take 3 – 12 months

Try to develop a relationship with a VC with the intention of talking about the investment in the future

Product and/ or technology review Management team Can the team execute? Business review Estimated market size: growing/ shrinking rate? Customer acquisition potential Are costs an issue? Risk factors What are the competitive advantages? Sustainable? What are the risks and mitigating factors? What is the exit potential? Point to note! A good business may not necessarily be a good VC investment

Product and/ or technology review

Management team

Can the team execute?

Business review

Estimated market size: growing/ shrinking rate?

Customer acquisition potential

Are costs an issue?

Risk factors

What are the competitive advantages? Sustainable?

What are the risks and mitigating factors?

What is the exit potential?

Point to note! A good business may not necessarily be a good VC investment

Market Potential / Access Is it growing ? Are drivers known ? Acceptance of new products ? Are there dominant suppliers ? Funding / Capital Markets What is the need for further funding ? Are grants available ? Availability of further funding ? Access to capital markets for exit ? Product / Service Is value proposition defined ? How will value proposition develop ? Is product locally or globally benchmarked ? What are competitive offering ? Mgmt

Market Potential / Access

Is it growing ?

Are drivers known ?

Acceptance of new products ?

Are there dominant suppliers ?

Funding / Capital Markets

What is the need for further funding ?

Are grants available ?

Availability of further funding ?

Access to capital markets for exit ?

Product / Service

Is value proposition defined ?

How will value proposition develop ?

Is product locally or globally benchmarked ?

What are competitive offering ?

No proper understanding of the business Value proposition is “unclear” and hence cannot be communicated. Wrong focus Focus on valuation & funding Focus on technology No customer engagement No sales (revenue) focus Unable to manage the business Financial and other controls “ Hire fast” but “fire slow” Team not rowing in the same direction.

No proper understanding of the business

Value proposition is “unclear” and hence cannot be communicated.

Wrong focus

Focus on valuation & funding

Focus on technology

No customer engagement

No sales (revenue) focus

Unable to manage the business

Financial and other controls

“ Hire fast” but “fire slow”

Team not rowing in the same direction.

Rewards are possible Requires blood, sweat and tears Case studies: IPO M&A Risks are also REAL – especially for the investor Real possibility: One small mistake and all is lost Case studies

Rewards are possible

Requires blood, sweat and tears

Case studies:

IPO

M&A

Risks are also REAL – especially for the investor

Real possibility: One small mistake and all is lost

Case studies

A technology venture capital company Wholly-owned by Minister of Finance Inc. Launched in April 2001 RM1 billion currently under management Invests in ICT related domain and high-growth sectors More than 90 portfolio companies in the past 7 years Successful exits: IPO - UnrealMind, MEMs, GPRO Technologies, ISS consulting Trade sale - Ada Cellworks, Leinet Technology, iNavigate, INix Technologies

A technology venture capital company

Wholly-owned by Minister of Finance Inc.

Launched in April 2001

RM1 billion currently under management

Invests in ICT related domain and high-growth sectors

More than 90 portfolio companies in the past 7 years

Successful exits:

IPO - UnrealMind, MEMs, GPRO Technologies, ISS consulting

Trade sale - Ada Cellworks, Leinet Technology, iNavigate, INix Technologies

Empower entrepreneurs to create new wealth Invests in ICT and high-growth sectors Seed  pre-IPO Develop the local VC industry Outsource Partners Program 1 (RM100 mil) 4 VC funds Outsource Partners Program 2 (RM200mil) up to 7 VC funds

Empower entrepreneurs to create new wealth

Invests in ICT and high-growth sectors

Seed  pre-IPO

Develop the local VC industry

Outsource Partners Program 1 (RM100 mil) 4 VC funds

Outsource Partners Program 2 (RM200mil) up to 7 VC funds

Information Technology (CMC inclusive) Internet Electronics/Semiconductor Communications & Networking Other high-growth technology businesses

Information Technology (CMC inclusive)

Internet

Electronics/Semiconductor

Communications & Networking

Other high-growth technology businesses

Invest in technology-based private startup companies 3-5 year investment horizon Board seat, participate/drive key decisions Seed and early-stage Initial investments of RM$1-3Mil Typical for Mezzanine ~ RM5 - 10Mil Initial investments and follow-on rounds to fund company through to exit Geographical Focus Mainly in Malaysian incorporated companies Foreign companies with Malaysian angle (technology, regional expansion, etc) for strategic reasons

Invest in technology-based private startup companies

3-5 year investment horizon

Board seat, participate/drive key decisions

Seed and early-stage

Initial investments of RM$1-3Mil

Typical for Mezzanine ~ RM5 - 10Mil

Initial investments and follow-on rounds to fund company through to exit

Geographical Focus

Mainly in Malaysian incorporated companies

Foreign companies with Malaysian angle (technology, regional expansion, etc) for strategic reasons

Proactive value-adding Corporate governance Management team Network and portfolio linkage Operating experience (insights) Commercialization strategies Fundraising strategy

Proactive value-adding

Corporate governance

Management team

Network and portfolio linkage

Operating experience (insights)

Commercialization strategies

Fundraising strategy

THANK YOU Visit us at www.mavcap.com Tel : +603-20503000 Fax : +603-26983800

THANK YOU

Visit us at www.mavcap.com

Tel : +603-20503000

Fax : +603-26983800