1. ALTA VENTURES MEXICO
IGNITING INNOVATION
Summary of Emerging
Market Research
ROGELIO DE LOS SANTOS, MANAGING DIRECTOR, ALTA VENTURES MEXICO
PAUL AHLSTROM, MANAGING DIRECTOR, ALTA VENTURES MEXICO
Q2 2012

2. Outline: Emerging Market Research
2
¨ AVM Research Timeline and Team
¨ Emerging Market Research
¨ Investment Hypothesis - Mexico
¨ Drill down Primary Market Research
¨ Investment thesis is working…
¨ Behind the Scenes at Alta
¨ Appendix

3. Alta Market Research Timeline 2005-2010
3
2005 2006 2007 2008
Industry
Emerging Select Indentify Advocacy-
Capital Formation
Market Mexico as Partners and and Innovation
Research Top Choice, Launch Alta Report;
International
Started Research PE Growth Investor Summit;
Market Capital Key Relationships

4. Alta Market Research Timeline 2005-2010
4
2009 2010
• U.S. Ecosystem Tours and Best
Practice Transfers
• Rogelio and Paul Partnership Build sustainable deal flow systems,
• What about VC? VC Market distribution and exit paths.
Drill Down and Strategy • E|100, MVCC, iTuesday, WIN
Formulation Kickstart, etc.
• Key Partner Identification • Building the team
• Open Office in Monterrey, U.S.
Team Moves to Mexico
Launch Alta Ventures Mexico
2/11/11

5. Alta Ventures - Team
5
Paul Ahlstrom, Managing Partner
l Co-Founder & Managing Partner, Alta Ventures
l Co-Founder, Alta Growth Capital and Kickstart Seed Fund, Co-Founder vSpring Capital
l Business Dev. Director Folio Corporation division of Lexis-Nexis/Reed Elsevier
l Founder/CEO of Knowlix sold to Peregrine Systems 1999 (now HP NYSE: HPQ)
l Other Exits include: MyFamily.com/Ancestry.com (NASDAQ: ACOM), GlobalSim www.globalsim.com sold
to Kongsberg Maritime (KOG - Oslo Stock Exchg), Senforce sold to Novell (NASDAQ: NOVL) Altiris IPO
(NASDAQ:ATRS) Altiris was then bought by Symantec (NASDAQ: SYMC), Aeroprise sold to BMC
(NASDAQ: BMC), Rhomobile sold to Motorola Solutions (NYSE: MSI)
l Advisory boards: Univ of Utah Tech Commercialization, (Previously Motorola VRB), Endeavor Mentor
l BA, Brigham Young University, Honorary Doctorate Netanya Academic College
l Venture Investments: The American Academy, Public Engines, Convert.com, Juxta Labs
Rogelio de los Santos Calderon, Managing Partner
l Co-Founder & Managing Partner, Alta Ventures
l Co-Founder, Kickstart Mexico
l Founder of 7 startups; exits Xtreme Cinemas, Dalus
l Co-founder and CEO of Generacion Empresarial Mexicana
l Master in Business Leadership, DUXX Graduate School of Business Leadership
l BS, Instituto Tecnologico y de Estudios Superiores de Monterrey
l Directorships: Energryn, Diverza, Juxta Labs, MFM
l Boards: Babson College, Tech de Monterrey - ITESM, Endeavor, Enlace E+E

6. Alta Ventures - Team
6
Rob McMillen, Principal
l VP Sales Rhomobile
l Associate, vSpring Capital
l JD MBA Brigham Young University
l BA Liberal Arts & Sciences Utah State University
l v100 member
Alem Muminovic, Associate
l MBA; International University of Monaco, with Honors
l Experienced entrepreneur; sold to Strategic Buyer
l Managing Director for Guadalajara Angel Investor Network
l Founding member and Team leader for iTuesday and E|100 in the western region of Mexico
Christian Aguirre, Senior Analyst
l Founding Member and Team Leader for E|100 Program
l Research and consultancy assistant at SME chair in EGADE
l MS in Finance; EGADE Business School with Honors
l BS Mechatronics; ITESM Magna Cum Laude
Lorenzo Barrera, Analyst
l Consultant at SINTEC
l Experience in the snack & confectionary, processed meats and steel industries
l BS Mechanical Engineering; University of Notre Dame

7. Outline: Emerging Market Research
7
¨ AVM Research Timeline and Team
¨ Emerging Market Research
¨ Investment Hypothesis - Mexico
¨ Drill down Primary Market Research
¨ Investment thesis is working…
¨ Behind the Scenes at Alta
¨ Appendix

8. The Ring of Fire
8
Macroeconomic Fundamentals (2011)
Norway
12.5%
10.0%
7.5%
Public Sector Deficit (% of GDP)
5.0%
2.5%
Chile Portugal
0.0% Sweden
Finland Germany
Colombia
-2.5% Brazil
Australia Canada Italy
-5.0%
Argentina Netherlands France
-7.5% Spain
Mexico USA
UK
-10.0% Ireland Greece
Japan
Denmark
-12.5%
-15.0%
0.0% 50.0% 100.0% 150.0% 200.0% 250.0%
Public Sector Debt (% of GDP) Source: Data from World Economic Outlook
Database 2012, The Ring of Fire, PIMCO, 2009

9. Gross External Debt as a Percent of GDP: Averages for
Selected 59 Countries, 2003-2009 (in percent)
9
Sources: International Monetary Fund, World Economic Outlook, World, Bank, Quarterly External Debt Statistics (QUEDS).

10. Continued Growth in Emerging Markets
Supports Private Equity
10
Emerging Markets
GDP Growth In Emerging Markets GDP Growth Predicted to
Predicted to Outperform Developed Remain Positive in Most
Countries Emerging Markets
Source: IMF, World Economic Outlook Database, 2009

11. Continued Growth in Emerging Markets
Supports Private Equity
11
Emerging Markets
Developed vs Emerging Markets 12
8
10
6
8
4
6
2
4
0
2010 2011 2012 2
-2
0
United States 2010 2011 2012
Euro Zone Africa Central & Eastern Europe
Emerging & Developing Economies Commonwealth of Independent States Developing Asia
Latin America Middle East
GDP Growth Predicted to Remain Positive GDP Growth In Emerging Markets Predicted
in Emerging Markets to Outperform Developed Countries
Source: IMF, World Economic Outlook Database, April 2012

12. Emerging Markets Pace Global Economic
Growth
12
The centers of rapid wealth creation are shifting from Developed to Emerging Markets
Contribution to Global GDP Growth
(Share of World Total)
70%
65%
60% Key Drivers are:
• Rapid industrialization
55% • Significant income
growth
50% • Improved long-term
45% household financial
confidence
40%
35%
30%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Advanced Economies
Emerging & Developing Economies
Source:
IMF,
World
Economic
Outlook
Database,
April
2012,
Data
for
years
2012-­‐2019
are
esBmates

13. Countries of the World
13
Albania Chad Grenada Lesotho Papua New Guinea Swaziland
Algeria Chile Guatemala Liberia Paraguay Sweden
Angola China Guinea Libya Peru Switzerland
Antigua and Barbuda Colombia Guinea-Bissau Lithuania Philippines Syrian Arab Republic
Argentina Comoros Guyana Luxembourg Poland Taiwan Province of China
Armenia Costa Rica Haiti Madagascar Portugal Tajikistan
Australia Croatia Honduras Malawi Qatar Tanzania
Austria Cyprus Hong Kong SAR Malaysia Republic of Congo Thailand
Azerbaijan Czech Republic Hungary Maldives Republic of Yemen The Bahamas
Bahrain Dem. Rep. of Congo Iceland Mali Romania The Gambia
Bangladesh Dem. Rep. of Timor-Leste India Malta Russia Togo
Barbados Denmark Indonesia Mauritania Rwanda Tonga
Belarus Djibouti Iraq Mauritius Samoa Trinidad and Tobago
Belgium Dominica Ireland Mexico Saudi Arabia Tunisia
Belize Dominican Republic I. Rep. of Afghanistan Moldova Senegal Turkey
Benin Ecuador I. Rep. of Iran Mongolia Serbia Turkmenistan
Bhutan Egypt Israel Montenegro Seychelles Uganda
Bolivia El Salvador Italy Morocco Sierra Leone Ukraine
Bosnia and Herzegovina Equatorial Guinea Jamaica Mozambique Singapore United Arab Emirates
Botswana Eritrea Japan Myanmar Slovak Republic United Kingdom
Brazil Estonia Jordan Namibia Slovenia United States
Brunei Darussalam Ethiopia Kazakhstan Nepal Solomon Islands Uruguay
Bulgaria Fiji Kenya Netherlands SÒo TomÚ and PrÝncipe Uzbekistan
Burkina Faso Finland Kiribati New Zealand South Africa Vanuatu
Burundi F. Y. Rep. of Macedonia Korea Nicaragua Spain Venezuela
Cote d'Ivoire France Kosovo Niger Sri Lanka Vietnam
Cambodia Gabon Kuwait Nigeria St. Kitts and Nevis Zambia
Cameroon Georgia Kyrgyz Republic Norway St. Lucia Zimbabwe
Canada Germany Lao People's D.R. Oman St. Vincent &Grenadines
Cape Verde Ghana Latvia Pakistan Sudan
Central AfricanRepublic Greece Lebanon Panama Suriname

14. Narrow the Field: Emerging Markets
Per capita GDP below $14k in 2009
14
Albania Chad Grenada Lesotho Papua New Guinea Swaziland
Algeria Chile Guatemala Liberia Paraguay
Angola China Guinea Libya Peru
Antigua and Barbuda Colombia Guinea-Bissau Lithuania Philippines SyrianArabRepublic
Argentina Comoros Guyana Poland
Armenia Costa Rica Haiti Madagascar Tajikistan
Honduras Malawi Tanzania
Malaysia Republic of Congo Thailand
Azerbaijan Hungary Maldives Republic of Yemen
Dem. Rep. of Congo Mali Romania The Gambia
Bangladesh Dem. Rep. of Timor-Leste India Russia Togo
Barbados Indonesia Mauritania Rwanda Tonga
Belarus Djibouti Iraq Mauritius Samoa
Dominica Mexico Tunisia
Belize DominicanRepublic I. Rep. of Afghanistan Moldova Senegal Turkey
Benin Ecuador I. Rep. of Iran Mongolia Serbia Turkmenistan
Bhutan Egypt Seychelles Uganda
Bolivia El Salvador Morocco Sierra Leone Ukraine
Bosnia and Herzegovina Equatorial Guinea Jamaica Mozambique
Botswana Eritrea Myanmar
Brazil Jordan Namibia
Ethiopia Kazakhstan Nepal SolomonIslands Uruguay
Bulgaria Fiji Kenya SÒoTomÚ and PrÝncipe Uzbekistan
Burkina Faso Kiribati South Africa Vanuatu
Burundi F. Y. Rep. of Macedonia Nicaragua Venezuela
Cote d'Ivoire Niger Sri Lanka Vietnam
Cambodia Gabon Nigeria St. Kitts and Nevis Zambia
Cameroon Georgia KyrgyzRepublic St. Lucia Zimbabwe
Lao People's D.R. St. Vincent &Grenadines
Cape Verde Ghana Latvia Pakistan Sudan
Central African Republic Lebanon Panama Suriname
*Based on IMF Information

15. Narrow the Field: Larger Economies
GDP over $75 billion in 2009
15
Algeria Chile
China Peru
Colombia Philippines
Argentina Poland
Malaysia Thailand
Hungary
Romania
Bangladesh India Russia
Indonesia
Mexico
Turkey
I. Rep. of Iran
Egypt
Morocco Ukraine
Brazil
Kazakhstan
South Africa
Venezuela
Vietnam
Nigeria
Pakistan
*Based on IMF Information

16. Narrow the Field: Larger Populations
Population over 50 million in 2009
16
China
Philippines
Thailand
Bangladesh India Russia
Indonesia
Mexico
Turkey
I. Rep. of Iran
Egypt
Brazil
Vietnam
Nigeria
Pakistan
*Based on IMF Information

17. Narrowed Field
17
Country Population GDP 2009 (billion) GDP per capita
China 1,334.74 $ 4,909 * $ 3,678
India 1,199.06 $ 1,236 * $ 1,031
Indonesia 231.55 $ 539 $ 2,329
Brazil 191.48 $ 1,574 $ 8,220
Bangladesh 165.71 $ 95 * $ 574
Pakistan 163.77 $ 167 * $ 1,017
Nigeria 151.87 $ 173 * $ 1,142
Russia 141.39 $ 1,229 * $ 8,694
Mexico 107.55 $ 875 $ 8,135
Philippines 92.23 $ 161 $ 1,746
Vietnam 87.21 $ 92 * $ 1,060
Egypt 76.70 $ 188 * $ 2,450
Iran 74.10 $ 330 * $ 4,460
Turkey 70.54 $ 615 $ 8,723
Thailand 66.98 $ 264 $ 3,940
*Estimated Source: International Monetary Fund

18. Narrow the Field
Goldman Sachs Growth Environment Score
18
BRICS and N-11 Goldman Sachs Growth Environment Score (GES) 2009
¨ Launched in 2005, GES was developed to capture the factors that crucially affect the ability of an
economy to grow.
¨ This tool helps Goldman to predict if their BRIC theory will become a reality in the next 20-40 years.
(Variables include inflation, government deficit, external debt, investment rate, penetration of phones, PC’s, and Internet, education, life expectancy, political stability,
rule of law and corruption)
Source: Goldman Sachs

19. Analysis of Key Indicators (as of 2005)
19

20. Ease of Doing Business (updated 2011 Analysis)
20
Ease of Doing Business Rank 2011
(Higher = worse)
Brazil 126
Russia 120
India 132
China 91
Mexico 53
Dealing with Protectin Trading
Getting Registering Getting Paying Enforcing Resolving
Starting a Construction g Across
Country Electricity Property- Credit- Taxes- Contracts – Insolvency
Business-Rank Permits – Investors- Borders -
-Rank Rank Rank Rank Rank - Rank
Rank Rank Rank
Brazil 120 127 51 114 98 79 150 121 118 136
China 151 179 115 40 67 97 122 60 16 75
India 166 181 98 97 40 46 147 109 182 128
Russia 111 178 183 45 98 111 105 160 13 60
Mexico 75 43 142 140 40 46 109 59 81 24
Source: World Bank; Ease of Doing Business Rank Data for 2011

21. Latin American Consumer
21
CONSUMER
Personal Disposable Income 2010
Source: Frontier Strategy Group, 2010 figures
Disposable Income: The amount of money that households have available for spending and saving after
income taxes have been accounted for

22. Other markets we considered…
22

23. Summary Analysis: India*
23
¨ Strengths/Opportunities
¤ Economic stability
¤ Political stability
¤ Market opportunity
n Demand for Telecom products and services
n Cost reduction
n Many US businesses use India as tech support/call center
¤ Skilled labor
n SW development Center
n Managerial and manufacturing expertise
¤ Ease to transfer profits back to US headquarters
¨ Weaknesses/Risks
¤ Social issues
n Poverty level
n Infra-structure
n Corruption
¤ Competitive Market
* Snapshot of 2005 analysis

24. Summary Analysis: China
24
¨ Strengths/Opportunities
¤ Market Size
¤ Fast paced economy
¤ Low cost of labor
¤ Time required to start a business (48 days)
¨ Weaknesses/Risks
¤ Political regime
¤ Hostility against US
¤ Social issues
n Severe human rights issues including child exploitation
n Corruption
¤ Trade barriers
¤ Severe Intellectual Property/Copyright issues
¤ Competition – local and foreign
* Snapshot of 2005 analysis

25. Summary Analysis: Russia
25
¨ Strengths/Opportunities
¤ Improving economy
¤ Political stability
¤ Infra-structure
¤ High literacy rate (99.4%)
¤ Time required to start a business (36 days!)
¨ Weaknesses/Risks
¤ Payment terms and collection risks
¤ Work ethics
¤ High taxes
n Large corporations not affected as much
¤ Social Issues
n Corruption still a serious problem
n 10% of population suffers from alcoholism
n Violence directly related to alcoholism (33% of violent crime)
¤ Slow decision making process
n Deadline is a foreign concept
* Snapshot of 2005 analysis

26. Latin America Region
26
¨ Overview
¤ Vast territory
n Each country has a unique set of values
n Two predominant languages
n Two large markets
n Several smaller markets with high opportunities
¤ Fertile Soil
n Rapid Infrastructure build up
n Flourishing IT and Telecom sectors
n Solid US business presence
n Overall economic growth
n Gradual political stabilization
n Commodity markets play well into trends
* Snapshot of 2005 analysis

27. Latin America Rank
27
¨ The Two Giants
¤ Brazil
¤ Mexico
¨ Small Market ROI Opportunities
¤ Chile
¨ Up and Coming
¤ Argentina
¤ Colombia
¤ Peru
¨ Other Options to Be Evaluated
¤ Ecuador, Venezuela
¤ Central America & Caribbean*
n Panama, Dominican Republic, Guatemala, El Salvador, Costa Rica
¤ *= Puerto Rico not included (US Hispanic market)
* Snapshot of 2005 analysis

28. Summary Analysis: Brazil
28
¨ Strengths/Opportunities
¤ Market Size (largest in LAR)
¤ Economic stability
n Economic indicators improving considerably
¤ Political stability
¤ Trained IT labor
¤ Strong US business presence
¤ Strong exit markets/liquidity
¨ Weaknesses/Risks
¤ Regulated economy
¤ Bureaucratic government and legal system
¤ Time required to start a business (58 days)
¤ Difficulty to transfer profits back to US headquarters
¤ Trade barriers (high import taxes, etc.)
¤ Cost of capital
¤ Government is the largest IT/Telecom customer – via bids
¤ Social discrepancies and high crime rate
* Snapshot of 2005 analysis

29. Latin America: Best ROI Mexico
29
¨ Pros
¤ Best ROI, Relatively low competition
¤ Fast-growing IT/Telecom market, Skilled labor
¤ Open to foreign investment, Friendly nation
¤ On par with regional leaders in its tax treatment, corporate governance requirements,
protection of minority shareholder rights and restrictions on local institutional investors
¤ Strong public and private universities
¤ Huge capital gap for small to medium size companies
¨ Cons
¤ Weak framework for fund activity, with larger funds setting up offshore
¤ Bankruptcy procedures & judicial system remains inefficient
¤ Perceptions of corruption and concerns about ongoing drug trade which affect FDI
confidence
* Snapshot of 2005 analysis

30. Summary Analysis: Chile
30
¨ Strengths/Opportunities
¤ Ease to do business
¤ Very low trade barriers
¤ Economic stability
¤ Political stability
¤ Highly trained IT/Telecom labor
¤ Strong US business presence
¤ US dollar largely accepted
¤ Channel of distribution follows US models
¤ Port of entry for Asian parts, components, products
¤ Great base of operations for South America
¨ Weaknesses/Risks
¤ Small Internal Market
¤ High shutdown costs
¤ Business permitting process
* Snapshot of 2005 analysis

31. Summary Analysis: Argentina
31
¨ Strengths/Opportunities
¤ Market opportunity
n Demand for technology/telecom products & services
¤ Undergoing positive economic changes
¤ US business presence (although growing leftist leaning sentiments)
¤ World class software and design talent
¤ High level of sophistication and quality of life
¨ Weaknesses/Risks
¤ Relatively small corporate market in spite of US presence
¤ Current economic situation
n Currency fluctuation
n Government debt & perceived government corruption
¤ Bureaucratic environment
¤ Social Issues
n Social discrepancies
n High crime rates
* Snapshot of 2005 analysis

32. Summary Analysis: Columbia
32
¨ Strengths/Opportunities
¤ Market opportunity
n Demand for technology/telecom products & services
n Government sector offers good opportunities
¤ Channel of distribution
¤ Some US business presence
¤ Dramatically improved public safety (addressed drug cartels)
¨ Weaknesses/Risks
¤ Social issues
n Social discrepancies
¤ Columbian peso fluctuations
¤ Relatively high cost of labor
¤ Perception of safety (although it is not the reality)
* Snapshot of updated analysis

33. Summary Analysis: Peru, Ecuador, CA&C
33
¨ Strengths/Opportunities
¤ Low competition
¤ Some US business presence
¤ Governments open to foreign investments
¨ Weaknesses/Risks
¤ Small markets
¤ Social issues
n Social classes discrepancies
¤ Weak economies
¤ Infrastructure
Note: some LAR prospective customers have subsidiaries or sales offices in CA and other smaller markets. In some cases, contracts
include support to those offices.
* Snapshot of 2005 analysis

34. Summary Analysis: Venezuela
34
¨ Strengths/Opportunities
¤ Market opportunity
n Demand for technology/telecom products & services
n Government opportunities – large deals
¤ Skilled labor
¤ Bright engineering talent
¤ Some US business presence
¤ Proximity to US (Miami)
¨ Weaknesses/Risks
¤ Small market
¤ Foreign exchange controls (Impossible to transfer money in and out of the country)
¤ Social issues
n Social discrepancies
n Violence, poverty, crime rate
¤ Political instability
n Leftist/dictator president`
* Snapshot of 2005 analysis

35. Outline: Emerging Market Research
35
¨ AVM Research Timeline and Team
¨ Emerging Market Research
¨ Investment Hypothesis - Mexico
¨ Drill down Primary Market Research
¨ Investment thesis is working…
¨ Behind the Scenes at Alta
¨ Appendix

36. Top Choices: Mexico + the BRICS
36
¨ Trending First choice*: Mexico
¨ Second place: Brazil
¨ Solid option: India
¨ Largest market: China
¨ Trending: Russia
* based on market PE/VC attractiveness and underserved capital

37. Mexico Market Increased Purchasing Power
MX Stability and
37
Mexico’s rising GDP is paralleled by an improving political and regulatory environment
First wave of OECD NAFTA; Central Peso crisis; floats AFOREs; stricter Sale of troubled EFTA; Calderon
Privatizations entry bank currency; receives accounting standards; portfolios and Investment elected
independence US bail-out; repays U.S. bailout intervened banks Grade
Global
Recession
15500
(US$)
14500
13500
GDP (PPP) per Capita from 1990-2010: 3.32% CAGR
12500
11500
10500
9500
8500
7500
6500
5500
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
First PAN governor Independent PRI loses majority in PRD wins Fox elected; First 30-year
elected; Electoral Institute Chamber of Deputies D.F. vote PRI loses majority in fixed rate Peso
PRD created established Senate bond issue
Source: IMF World Economic Outlook Database, April 2012 Note: Data for 2011 is an estimate

38. Mexico within the Regional Sovereign Risk
Environment
38
Sovereign Debt Rating (2012) Russia
Mexico
China
India
Brazil
Mexico is tied for the second best Sovereign Debt Rating in Latin
America and is also tied for second best among the BRICs
Source: Fitch analysis

39. Mexico within the Regional Sovereign Risk
Environment
39
Sovereign
Debt
Ra/ng
as
of
2012
Investment Grade Non-Investment Grade
Country Debt Rating Country Debt Rating
Chile A+ Paraguay BB-
Mexico BBB Venezuela B+
Brazil BBB Bolivia B+
Peru BBB Argentina B
Columbia BBB- Ecuador B-
Uruguay BBB-
Non-Latin America Countries
Country Debt Rating
China AA-
Russia BBB
India BBB-
Source: Standard & Poor’s

40. Mexico’s Solid Foundation
Mexico’s growth expected to continue
40
Fast and sustainable growth Healthy population pyramid with increased aging Increasing Spending Power
GDP (USD tr) 100+
95-99
GDP
/capita
(USD
thds)
2010 2030 90-94
85-89 17.6
1.43 80-84
6% 11% 75-79 16.4
1.29 70-74
65-69 15.1
1.17 60-64 14.2
13.7
Age ranges
55-59
50-54 12.5
1.04 45-49
55% 59% 40-44
0.85 0.88 35-39
30-34
25-29
20-24
15-19
39% 30% 10-14
5-9
0-4
05 07 09 11 13 15 05
07
09
11
13
15
10% 5% 5% 10%
Percentage of total population
Inflation (Avg CPI) Savings
rate
5.3%
Growing Population and Urbanization
Total
popula/on
Urban
popula/on
25.9%
24.7%
25.6%
(million)
growth
(million)
4.0% 4.0% 25.8%
2.5
23.9%
3.6% 112
114
2.4
2.4
23.2%
107
110
2.2
2.3
2.3
3.0% 3.0% 103
105
05 07 09 11 13 15 05
07
09
11
13
15
05
07
09
11
13
15
05
07
09
11
13
15
Source : IMF Outlook April 2011, CIA World Fact book, EIU

41. Mexico’s New Advantage in three key
manufacturing areas (cost-time-quality)
Mexico’s export oriented manufacturing industry will continue to fuel growth
41
Mexico’s Export Products and Partners With Significant Export Upside
Mexico’s
export
partners
(2011
in
%)
Mexico’s Export Advantages
Mexico China
100% Transporta/on
cost*
81% USDs
$3058 $5239
80%
Lead
/me*
60% Days
5 22
40%
Labor
Unit
Cost
15% USDs
$4.40 $4.50
20%
4%
0% * 2010. 53 foot container from Mexico to Chicago and 40 foot
US Canada Other container from China to Chicago
Mexico’s
export
products
In
%
Labor
unit
cost
(37%):
Other
manufactured
USDs
(23%):
TVs,
goods
6.00
40% (18%):
oil,
mobile
phones,
fruits
and
(22%):
vehicles,
refrigerators
&
Mexico
30% vegetables,
auto
parts
appliances
4.00
coffee,
coAon
20%
China
2.00
10%
0% 0.00
Commodities Automotive Electronics Other 01
03
05
07
09
Source: Worldbank, 2012

42. Opportunity Gap
2010 Capital
Mexico has low private equity participation compared to the BRIC’s.
42
Private Equity Penetration, 2010
1.6%
1.41%
1.4%
PE Investment / GDP (%)
1.2%
1.06%
1.03%
1.0%
0.8%
0.61%
0.58%
0.6%
0.41%
0.37% 0.37%
0.4%
0.27% 0.29%
0.21%
0.14% 0.15% 0.15% 0.16% 0.2%
0.04% 0.05%
0.0%
Source: Emerging Markets Private Equity Association, IMF

43. Opportunity
MX PE Penetration dropped in 2011
Mexico has low private equity participation compared to the BRIC’s.
43
Private Equity Penetration, 2011
.33% .75% .98%
… 2.05%
… … …
0.30%
PE Investment / GDP (%)
0.20%
0.14%
0.13%
0.12%
0.10% 0.10% 0.10%
0.10% 0.09%
0.08%
0.04%
0.01% 0.01%
0.00%
Mexico MENA S Russia SSA Brazil Japan Turkey S Poland China India UK US Israel
Korea Africa
Source: Emerging Markets – EMPEA, United Kingdom – Centre for Management Buy-Out Research, United States – PitchBook, Israel – Israel Venture Capital Research Center,
Japan – Asia Private Equity Review, All GDP data – International Monetary Fund

44. E&Y VC/PE Country Attractiveness Score 2011
44
VCPE Country Attractiveness Score 2011
USA (1)
UK (2)
South Korea (17)
China (20)
Chile (29)
India (30)
Mexico (42)
Brazil (43)
Colombia (47)
Argentina (66)
Kyrgyzstan (80)
0 20 40 60 80 100
Source: The Global Venture Capital and Private Equity Country Attractiveness Index 2011, Ernst & Young

45. 2010 AT Kearney FDI Confidence
Mexico #8 Jumps 11 Places
45
* Mexico dropped significantly in 2012 rankings

46. 2010 LAVCA Scorecard Results Over Time
46
INT’L BENCHMARKS
Total Scorecard ratings UK 93
(Select Latin American Countries) Israel 81
78
Spain 76
80 76 76 76 Taiwan 61
74
75 75
75 75
SCORECARD COUNTRIES
70
Total Scores (Max = 100)
Chile Chile 76
65
65 Brazil Brazil 75
Mexico 63
59 Mexico
60 Colombia 60
Colombia
Uruguay 57
55 Latam Average
Trinidad & Tobago 56
50 Costa Rica Latin America Average 55
Peru Costa Rica 54
45
Argentina Peru 51
40 Panama 49
Argentina 43
35 El Salvador 43
2006 2007 2008 2009 2010 Dominican Republic 38
Source: 2010 LAVCA – EIU Scorecard Report.

47. 2012 LAVCA Scorecard
47
Evolution of Select PE/VC Markets

48. 2010 LAVCA Scorecard Results
48
Rank / Y-o-Y (scores)
1 a UK 93
2 ↔ Israel 81
3 ▼2 Spain 76
4 ↔ Chile 76
5 ↔ Brazil 75
6 ▲5 Mexico 63
7 ▼2 Taiwan 61
8 ▲3 Colombia 60
9 ▲3 Uruguay 57 International
10 ▼7 Trinidad & Tobago 56 Benchmarks
11 ▲1 Costa Rica 54
Latin America
12 ▲1 Peru 51
13 ↔ Panama 49
=14 ▼3 Argentina 43
=14 ▼3 El Salvador 43
16 ▲5 Dominican Republic 38
0 10 20 30 40 50 60 70 80 90 100
Chile, Brazil and more recently Mexico have been able to break out of the pack and get
closer to the international benchmarks from more developed markets. Source: 2010 LAVCA – EIU Scorecard Report.

49. 2012 LAVCA Scorecard
49

50. Structural Transformations and Shifting Consumer Habits Creating
Click to edit Master title style
Significant Opportunities & Challenges for PE/VC investments in MX
50
Rapid Structural Growing
Infra. Development Transformation Consumption
• Investment expected to remain • Rapidly growing middle class • Per Capita Income expected to
at 26% of GDP (highest in and upper class grow at 4% over next 5 years
Latin America after Chile • Maturing population pyramid • Continued willingness to spend
• Increased urbanization will (pop. above 65 years old will reflected in stable savings rate
drive the need for housing, be 11% in 2030) • 55% of the population is
transportation and • Technology orientation currently in active economic
infrastructure life
• Growing environmental
• The 2012 5-year plan includes awareness
$88 bn investments in energy
Opportunities: Opportunities: Opportunities:
• Non Banking Finance to • Healthcare, Housing • Leisure & Lifestyle
business • Advertising
• Education
• Services to manufacturing • Consumer goods
• Non banking Financial
industry • Logistics/transportation
Services to consumers
• Tech manufacturing

51. Mexico within the Regional PE/VC Attractiveness Environment
Mexico
is
very
underpenetrated
despite
its
overall
good
business
environment
to
conduct
PE
and
VC
51
80
Business Environment vs. PE Penetration
0.20%
Business environment for PE/VC
70 0.18%
60 0.16%
0.14%
50
Avg. 2008-2010
PE/VC penetration
0.12%
Score (0 to 100)
40 0.10%
30 0.08%
0.06%
20
0.04%
10
0.02%
0 0.00%
Chile Brazil Mexico Colombia Uruguay Peru Argentina
** In addition, bank credit* in Mexico is much lower than in the region. Bank credit
was 12% of GDP in 2010, vs 51% for Brazil and 37% average for Latin America
* Bank credit in Latin America weighted by GDP share. Includes mortgages, credit to consumers and to firms
Source: EMPEA, EIU, LAVCA, Banco de México and S&P Ratings Service; Vander Capital Partners analysis;

52. Significant Business Lending & Investment Gap
52
Business lending has experienced negative growth and has not kept pace with consumer credit.
Companies are starved for growth capital to keep up with the market demand.
SOURCE: Comision Nacional Bancaria y de Valores

53. Still significant Lending Gap for SME’s
53
Companies are starved for growth capital to keep up with the market demand. As a rule
consumer lending has far outstripped new business lending save for a short period during the
financial crisis.
Loan Growth in the Mexican Banking System
60%
50% Business
Year-over-year growth
40% Consumer
30% Housing
20%
10%
0%
-10%
-20%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
SOURCE: Comision Nacional Bancaria y de Valores

54. Mexico’s Current Situation – Only large
Mexican businesses have access to financing
54
BANK CREDIT TO MEXICAN FIRMS BY SIZE
$80
$70 12% 13%
$60 13% 12%
$50
US$ Billion
12%
$40 Other
Large
$30
$20
$10
$-
2006 2007 2008 2009 2010
Source: AMB Report: “Lending in Mexico” February 2011 and Banco de México; Vander Capital Partners analysis.

55. No Financing for Small & Medium Mexican
Businesses 1% of firms get 87% of the financing
55
BANK CREDIT TO MEXICAN FIRMS BY SIZE
$100
$90
408,884 small
and med firms
$80
12% $11.16 13%
$70
13% 12%
3,033 large firms
$US Billion
$60
$8.38
12%
$50
Small
&
Med
$40
Large
$74.69
$30
$56.07
$20
$10
$0
ABM
CNBV
Source: AMB Report: “Lending in Mexico” February 2011 and Banco de México; Base de datos ahorro y financiamiento CNBV, diciembre 2010; Endeavor Mexico; Vander
Capital Partners analysis.

56. Mexico’s Current Situation
56
BANK CREDIT TO MEXICAN FIRMS BY SIZE IN 2010
Firm
size
Loan
per
firm
Loan
per
firm
Distribu/on
%
of
GDP
Employees
ABM
CNBV
S
&
M
US$20.5K
US$27.3k
13%
40%
5-­‐499
Large
US$18.5Mn
US$24.6Mn
87%
54%
500+
Source: AMB Report: “Lending in Mexico” February 2011 and Banco de México; Base de datos ahorro y financiamiento CNBV, diciembre 2010; Endeavor México; Vander
Capital Partners analysis.

57. Outline: Emerging Market Research
57
¨ AVM Research Timeline and Team
¨ Emerging Market Research
¨ Investment Hypothesis - Mexico
¨ Drill down Primary Market Research
¨ Investment thesis is working…
¨ Behind the Scenes at Alta
¨ Appendix

58. On-The-Ground Research
58

59. There Are Many Mexicos
59

60. Border Issues Obscure America’s
view of Mexico
6060
¨ Violence
¨ Drug Cartels
¨ Immigration

61. Market Drill Down Process
On-The-Ground Research
61
The Alta team has held 100+ meetings that have enabled us to understand the opportunities and
challenges of doing business in Mexico. Below are a few representative meetings…
• Federal Competition Commission; Economic Bureau;
Undersecretary of the Treasury; ProMexico; Economic Bureau,
Foreign Investment; Telecommunications and Transportation
Government Bureau; Mexican Senators; Governor of State of Mexico;
Former Ambassador to US; Mayor of Mexico City;
Undersecretary of North America; Mexican Legislature;
Executive Director, NAFINSA; ProMexico; FOCIR
• GE Mexico, Cisco, Corporate and Investment Bank of
Banamex (Citigroup), Intel Capital Mexico, IXE Grupo
Industry Financiero, American Chamber of Commerce—Mexico,
Cavlemas, US Hispanic Chamber of Commerce; Banorte
Insurance, Deutsche Bank Mexico

62. Market Drill Down Process
On-The-Ground Research
62
• Visited with more than 12 Mexican
Mexican families who are among the most
Families influential in Mexico.
Research/ • Tecnologico de Monterrey (TEC) , UNAM,
Universities CEPII, Conacyt, Pan American Univ (CEPii)
Limited • More than 20 limited partners and 3
Partners, institutional investors and multilaterals
Financial including IFC, NAFIN, CMIC, IADB/MIF

63. Widespread Development
63
Tijuana
Population: 750,000 Ciudad Juárez
Key Industries: beverages, processed foods, Torreón
Population: 800,000 Population: 880,000
metalworking, radio and television Key Industries: electrical machinery, transport equipment, meat, electronics, Key Industries: automotive, bricks, clay, refractory,
Hermosillo manufacture, electrical machinery
dairy products general machinery, cement and derivatives
Population: 600,000
Key Industries: automotive, meat, cement Chihuahua
and derivatives, electrical machinery Population: 650,000 Monterrey
Key Industries: electrical machinery, automotive, Population: 3 million
meat, electronics, dairy products, timber Key Industries: oil refining, iron and steel,
Culiacán electrical machinery, glass and derivatives,
Population: 600,000 breweries, meat products, cement, banking
Key Industries: food processing, cereal
milling, sugar, beverages, edible oils and
fats
Veracruz
Aguascalientes Population: 450,000
Population: 500,000 Tampico-Madero-Senderomira Key Industries: petrochemicals,
Key Industries: electronics, automotive, dairy, Population: 340,000 refining, basic chemicals, iron and
textiles, carpets Key Industries: chemical, industrial steel, sugar, beef, processed foods,
machinery, electronic & electrical tourism, transportation services
León equipment, oil and refinery, agriculture, (maritime)
Population: 1 million cattle, fishing
Key Industries: refining, footwear, leather and tanning,
bakery goods, beverages
Guadalajara
Population: 4 million
Key Industries: high-technology, edible oils
and fats, plastic products, chemicals, dairy
products, processed foods, textiles, footwear
San Luis Potosí
Toluca Population: 670,000
Population: 850,000 Key Industries: iron and steel, non-
Key Industries: automotive, plastics, Mexico City ferrous metallurgy, tobacco products,
paper and cellulose, chemical electrical machinery, automotive,
Population: 20 million
derivatives, basic chemicals Key Industries: retail, financial services, livestock
food, automotive, plastic products,
paper and cellulose, chemical Puebla
derivatives, basic chemicals Population: 1.5 million
Key Industries: automotive, textiles, iron
Source: SE-NAFTA. and steel, bottled water, chemicals, meat
* Snapshot of 2005 analysis processing

64. Major Oil Suppliers of the United States
64
¨ 1. Canada – 2.53 million barrels per day (bpd)
¨ 2. Mexico – 1.26
¨ 3. Saudi Arabia – 1.08
¨ 4. Venezuela – 1.07
¨ 5. Nigeria – 1.05
¨ 6. Algeria – .512
¨ 7. Iraq – .464
¨ 8. Angola – .422
¨ 9. Colombia – .360
¨ 10. Brazil – .289
Source US Department of Energy: ftp://ftp.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

65. Electronics Industry in Mexico
65
Tijuana Mexicali Juárez
Chihuahua Reynosa
 SANYO  SONY  TOSHIBA
 SONY  MOTOROLA  PHILIPS  DELCO (Automotriz)
 DAEWOO(SLRC)  ALTEL
 HITACHI  MITSUBISHI  THOMSON  PHILIPS
 MATSUSHITA  KIOCERA  KENWOOD  SONY
 JVC  GOLDSTAR  JABIL  ELECTROLUX  MATSUSHITA (Automotriz)
 SAMSUNG Saltillo
7 ACER  VITROMATIC
 PIONNER  ELAMEX  MABE  NOKIA
 MITSUBISHI  PLEXUS  HAMILTON  LUCENT TECHNOLOGIES
 SHARP BEACH*  FUJITSU (Automotriz)
 SANYO ELECTRODOMÉSTICOS Torreón  CONDURA (Automotriz)
 PHILIPS  THOMSON  DELNOSA (Automotriz)
 CASIO
 KODAK
 CANON
 KIOCERA Monterrey
 INTERNACIONAL RECTIFIER  AUDIO & VIDEO
 PIONNER
 DANFOSS COMPRESSORS
 VITROMATIC (3)  Home Appliance
Aguascalientes SanLuis Potosí  MABE (2)
 MABE GE  KODAK 7 Computer Equipment
 WHITE  NIPPON DENSO (Automotriz)
 WESTINGHOUSE  MABE SANYO ( Telecommunications
 MEX*  AXA YAZAKI (Automotriz)
 TEXAS INTS.  Other
 XEROX Cuernavaca
 SIEMENS Querétaro
 NEC
 VISTAR
 VITROMATIC (2)
Estado de México
Guadalajara
 PANASONIC
7 I.B.M  ELECTROLUX
7 H.P. Querétaro  FILTER QUEEN
 NEC  CLARION  HOOVER
 LUCENT TECHNOLOGIES  DAEWOO Estado de Mexico  IMAN
 MOTOROLA  BLACK & DECKER  MABE  KOBLENZ
 KODAK  MABE (2)  BRAUN  MABE
 CUMEX  SINGER  ELECTROLUX Puebla  PHILIPS
 SIEMENS  SIEMENS  SUNBEAM  GESTAR  SUNBEAM
 SOLECTRON DE MEXICO  KOBLENZ  SINGER  OLIVETTI
 FLEXTRONICS  ERICSSON  VITROMATIC  OLIMPIA
 JABIL CIRCUIT  ALCATEL/INDETEL
 MTI ELECTRONICS  AMP
 SCI SANMINA * Snapshot of 2005 analysis

66. Mexico’s Dynamic & Growing Industrial Base
66
• 40+ Home appliance manufacturers
Merrytech TIMCO
• Dozens of automobile manufacturers and parts
suppliers
• World Class Mexican Companies

67. Merging of Consumer Habits
67

68. The U.S. exports more to Mexico than to
any other country besides Canada
68
U.S Exports in 2007
1.Canada 2. Mexico 3. China 4. Japan 5. U.K.
$248.9B $136.5B $65.2B $62.7B $50.3B
Not in the Top 10
Brazil India Russia
$24.6B $17.6B $7.4B

69. Mexico, China & Brazil increase purchase of
US goods and all others flat
69
U.S Exports in 2010
1.Canada 2. Mexico 3. China 4. Japan 5. U.K.
$248B $163B $91.9B $60.5B $51B
BRICS 2010
Brazil India Russia
$35B $19.2B $6B
Source: http://www.ustr.gov/countries-regions

70. Heavy Trade and Growing
70
¨ There is more than $1 billion in trade every single
day between the U.S. and Mexico.
¨ $400 billion of imports and exports between the US
and Mexico each year.

71. Mexico is the Number One Foreign Market
for California Goods
71
California Exports in 2007
1. Mexico 2.Canada 3. Japan 4. China
5. South
Korea
$16.1B $13.5B $10.6B
$18.3B $7.4B
Not in the Top 5
Brazil India Russia
$2B $1.9B $.5B

72. 8 Californian Industries Sold Over $1B in
Goods to Mexico in 2007
72
$4.4B • Computers and Electronic Products
$2.1B • Transportation Equipment
$1.8B • Machinery Manufacturers
$1.1B • Fabricated Metal Products
$1.1B • Processed Foods
$1.0B • Chemical Manufacturers
$1.0B • Plastic and Rubber Products
$1.0B • Electronic Equipment, Appliances and Parts