Nordcap Equity Partners
NCF Project
Warsaw, May 2009

About Nordcap
 Nordcap Equity Partners, a venture capital firm, was established in 2002 to
make equity and equity-related investments in Central and Eastern Europe.
 We provide capital for companies capable of competing in global markets,
as well as entrepreneurs who has the potential to be a market leader in
local countries or the region.
 We specialize in:
• Expansion and development capital;
• Management Buy-Outs or Buy-Ins;
• Joint ventures with strategic partners (start-up, expansion or
franchises);
• Finance for the acquisition of a complementary business;
• Capital to purchase the interest of a passive or retiring shareholder;
• Recapitalizations and financial restructurings;
 More information on Nordcap is available at: http://nordcap.co.uk/

About NCF
 National Capital Fund (NCF) was established on July 1, 2005 on the basis
of The Act on NCF of March 4, 2005.
 The Company is wholly owned by Bank Gospodarstwa Krajowego
(Poland's only state owned bank).
 NCF operates as a fund of funds that invests in private equity / venture
capital funds operating in Poland.
 NCF supplies financing to the selected funds either through equity
investments or through provision of long-term debt.
 As a fund of funds, NCF does not commit to companies directly.
 An important element of the NCF funding mechanism is preferential
treatment of those private investors who co-invest in NCF's portfolio funds.
 To accomplish its strategic goal of limiting the equity gap, NCF uses state
funding, EU structural funds and other public sources.
 More information on NCF is available at: http://kfk.org.pl/
 Examples of VC funds financed by NCF include:
• BBI Seed Fund (http://www.bbiseed.pl/)
• Helix Ventures (http://www.helixventures.net)

The 2009 Tender
 On April 30th, 2009 the second open tender of offers for VC funds was
launched.
 At least 300 mln PLN (c. 71 m EUR) will be allocated for investments in
best VC funds selected in the tender.
 The tender is addressed at funds or fund management companies with the
strategy to invest in innovative small and medium-sized companies (SME)
operating in Poland.
 The applications will be evaluated according to a set of formal, economic
and legal criteria, which will be a basis for the shortlist of the offers with the
highest scores.
 The shortlisted managers will be requested to present their offers in detail
to NCF who will then perform due diligence of those.
 Finally, best offer (or offers) will be selected and investment agreement will
be signed between NCF and the winning fund (or funds).
 Subsequently, NCF will monitor the performance of its portfolio funds and
strive to exit the investments on the most profitable terms in due time.
 Deadline for submitting offers is July 31th, 2009.

Selection Criteria
 NCF is willing to support VC funds investing in SME sector in Poland.
 It will focus on funds specialized in innovative, R&D-related and high-
growth projects with targeted investments of up to € 1.5 m.
 NCF will invest in Funds who declare to run their activities within 10 years
period (with an option to extend to 12 years).
 The share of NCF in the Fund will not exceed 50% as maximum.
 NCF will monitor the fund performance through its representatives at
supervisory level.
 When evaluating a fund, NCF will favor:
• Large size of the fund (however, limits set out in legislation related to
NCF such as investment per one SME of up to €1.5 m and NCF
participation of up to 50 per cent must be met)
• Experience in PE/VC type of investments (as measured by number of
deals and IRRs), as well as experience in establishing and managing
of companies
• Special focus on SMEs, early stage investments, innovative and
R&D projects
• Investment strategy that offers attractive returns
• Compatibility of managers' experience with the fund's investment
strategy
• Compatibility of fund's budgetary assumptions with its investment
strategy and manager’s commitment to the fund

Benefits
 The terms set out by NCF give rise to a number of potential benefits both
for private investors and managers.
 NCF agrees for preferential treatment of private investments (all proceeds
are reimbursed first to the private investors before NCF).
 Carried interest will be equal to 20% above the minimal hurdle rate.
 The minimum hurdle rate will be proposed by the manager with a condition
that it cannot be lower than average yield of Polish government 10 year
bonds (circa 6% as of now).
 Management fee of up to 3% - also to be proposed by the manager as a
part of the tender offer.
 Additionally, NCF will provide grants to recover part of fund management
costs. The grant can cover up to 65 per cent of the cost of preparing and
monitoring of investment portfolio.
 Grants work for fund investors as they are paid directly into the fund and
increase the pool of investment capital.
 The grants are limited to 10% of the total capital committed by NCF.

Nordcap proposal
 Nordcap has already arranged investor’s commitments for Euro 10 mln into
the NCF supported VC pool, among the committed amounts will be those
of the investment managers.
 We aim to reach total fund capitalization at 100 mln PLN (c. 25 mln EUR)
with 50% NCF participation.
 We have prepared a draft of the investment strategy which is fully
compliant with all formal requirements set out by NCF.
 The key points of the strategy are:
• Geographical scope: Poland
• Targets: SME, start-up and expansion phases
• Maximum investment: 1.5 mln EUR
• Sectors: TMT, Renewables, Agriculture, Life science
• Fund lifetime: up to 10 years
• Investment period: 4 years (with an option to prolong to 5 years)
• Expected number of investments: 12-14
• Management fee: 3%
• Hurdle rate: 8%
• Expected net IRR for investors: 13%
 We are looking for an experienced partner with whom we could apply to the
NCF tender and run the fund together afterwards.
 Subject to your interest we are ready to provide you with further information
concerning the investment strategy and our budgetary assumptions.

Contact details
Should you be interested in working together with us on the NCF project
please contact directly:
Andrzej Bińkowski
Partner
Nordcap
ul. Widok 12
00-023 Warszawa
tel.: (+48 22) 207 21 55
fax: (+48 22) 207 21 52
mobile: +48 602 570 593
email: ab@nordcap.co.uk
www.nordcap.co.uk