XYZ Ventures is presenting an opportunity to invest $75 million for a 10% equity stake in the Charlotte Hornets NBA franchise. As the first sports franchise in XYZ Ventures' portfolio, this investment seeks to capitalize on basketball's growing popularity and a history of successful private equity transactions involving sports teams. The presentation outlines strategies to grow revenue through gameday experiences, media rights, sponsorships, merchandise and licensing to increase the team's valuation over the long term.

1. The Charlotte Hornets
April 7, 2016
Investor Presentation

2. Executive Summary
• XYZVentures: Alex, Cameron,Gouthum,Wyndham.
• XYZVentures 1: $1b committed capital.
• High-valued, long term, late stageVC investments.
• Fund 2:
Size: $500 Million
Term: 10Years
Investment Period: 3 years from Jan/1/2016
General Partner Commitment: 1% of committed capital up to 5,000,000
Annual Management Fee: 2% of aggregate capital commitments
Carried Interest: Subject to 8% hurdle

3. Industry Analysis
• 30 NBA teams.
• New team approval process is substantial.
• Player collective bargaining creates supplier power.
• Media, fans, corporations hold high buyer power.
• Threat of substitutes is high.
• Low competitive rivalry due to league structure.

4. Opportunity
• 1st sports franchise in portfolio.
• Basketball’s growing popularity.
• History of successful PE transactions.
• Michael Jordan.
• Undervalued operating asset.

5. Value Creation
• Grow game day revenue.
• Media rights.
• New sponsorship.
• Merchandise and licensing sales.
• Taxpayer subsidized area repair.

6. Deal Risks
• Assembling the right “army”.
• Player’s union Lock-Out.
• Quality of draft talent.
• Player behavior.
• Nearby college basketball.

7. Valuation / Deal Structure
• $750 million pre-money valuation.
• $75 million investment for 10% equity stake.
• Series A Preferred.
• Receive 1/3 of Board seats.
• Hiring and firing rights for management
• Liquidation preferences.
• Anti-dilution strategy.
• Due diligence costs covered up to $50,000.
• Offer expires 4/18/2016.
• Sell ownership stake to future investor.

8. Conclusion
• Minority investment of $75 million for 10% equity stake.
• Long-term investment.
• Undergo thorough ownership approval process.
• Bolster on-court performance, team brand, and value creating
operations.