This document provides an overview of Scale Investors Ltd, a female-focused angel investment network in Australia. It discusses Scale's history launching in 2013, current investments in 5 female-led businesses, and future plans to launch the Scale Women's Fund, a $20-25 million fund targeting returns by supporting 15-20 early stage, female-led companies. The document also notes an opportunity for investment due to underfunding of female entrepreneurs globally despite evidence they achieve higher revenues and returns.

1. Susan Oliver
Chairman Scale investors ltd

2. • History: Scale Investors
• Current: Scale Angels and Investments
• Future: Scale Women’s Fund
• Investment Opportunity
• Investment Strategy
• Investment Process
• Impact on Entrepreneurship
2
Overview

3. 3
History: Scale Investors
• Founded in March 2013 with support from the Victorian Government
• Launched female focused angel investor network in July 2013
• Inspired by US based organisation Golden Seeds.
• Vision: Maximise returns by supporting early stage businesses led by women
• Founding board: Susan Oliver, Carol Schwartz, Annette Kimmitt
• Inaugural CEO: Laura McKenzie
• Partnerships: PwC (Sean Gregory), Morrows and Norton Gledhill

4. 4
• Recruited 60 Angel Investors in Melbourne and Sydney
• Mainly women, but we welcome and include male Scale Angels
• Provide an education program on Angel investing and access to deal flow
• 5 archetypes of Scale Angels:
– NED with a portfolio of ASX and NfP board roles
– HNW family primarily with retail and property assets
– Successful entrepreneur seeking diversification
– Experienced Investor
– Professional services partner and ASX investments are conflicts
• Scale Angels have invested almost $2.5m in 5 female led businesses.
.
Current: Scale Angels

5. 5
Current: Investments
• These 5 female led businesses are disrupting the telecommunications, legal,
marketing/communications, property management and water/sanitation
industries
• 7 Scale Angels have taken on Board and Advisory roles (including 2
Chairman) and are actively involved post investment

6. 6
Future: Scale Women’s Fund
• Fund Name: Scale Women’s Fund, LP
• Fund Manager: Scale Women’s Fund GP, Pty Ltd
• Fund Structure: Limited Partnership, registered as an ESVCLP
All distributions to investors are exempt from tax.
• Fund Launch Date: April 2015
• Fund Term: 10 years
• Target Fund Size: $20 million to $25 million
• Target Portfolio Size: 15-20 female led early stage companies
• Target Return: Average return of 2.5x per investee (>20% IRR)
• Min. Investment: $500,000 Commitment (drawn down as required)
• Annual Fees: Agreed annual budget, capped at $500,000 per annum
• Performance Fees: 20% of investment profits (hurdle rate 8%)

7. 7
Asset
allocation
• Australian SMSF market $523 billion, 33% of superannuation industry
• Diversification of asset class away from domestic shares, cash and property.
https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/Statistics/Quarterly-reports/Self-managed-super-fund-
statistical-report---June-2014/?page=2#Tables
$198B Domestic Listed
$158B Cash
$85B Property
$55B Unlisted
$39B Other incl.
Collectibles
$17B Debt
$5B
O'seas
Opportunity

8. Country Estimated
number of
angels
Angel
groups
number
Size of angel
group in
USDs
Angels as a
% of VC
market
US* 298k 265 $24.8bn 75%
UK^ 8k 28 $211m 34%
Australia+ 500 11 $45m 11%
8
• Angel investing still immature market in Australia
• Angel investors in groups generate higher returns than individual investors
* http://www.unh.edu/news/releases/2014/04/em30angel.cfm
* http://www.angelresourceinstitute.org/en/Research/Halo-Report/Halo-Report.aspx
^ http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/about-deloitte/deloitte-uk-taking-the-pulse-of-the-angel-
market.pdf
^ http://www.bvca.co.uk/Portals/0/library/documents/RIA%20Guides/IAR%20Autumn14-fin.pdf
+ http://fromlittlethings.co/wp-content/uploads/2012/12/Angels-Investors-Survey-Report-2011-FINAL.pdf
+ http://startupaus.org/crossroads/
+ http://fromlittlethings.co/wp-content/uploads/2012/11/SiliconBeachStartupEcosystem.pdf
Early
stage
investing
Opportunity

9. 9
Female
led
“There is an enormous untapped opportunity for venture capitalists smart
enough to look at the numbers and fund women entrepreneurs. Only a small
portion of early –stage investments is going to women entrepreneurs, yet our
data suggests that venture capital-funded businesses with women on the
executive team perform better on multiple dimensions. The venture capital
community, therefore, may be missing good investment opportunities by not
investing in women entrepreneurs.” Dr Candida Brush, lead author, the Diana
Report: Women Entrepreneurs 2014
Research has shown that female led companies have:
• Attracted little capital
• Achieve 12% more revenue and earn 35% higher return
• Highly efficient users of capital
• Higher valuations
http://www.babson.edu/Academics/centers/blank-center/global-research/diana/Documents/diana-project-executive-
summary-2014.pdf
http://i.dell.com/sites/doccontent/corporate/secure/en/Documents/Gedi-Book-FINAL.pdf
http://www.dowjones.com/collateral/files/WomenPE_report_final.pdf http://www.w-t-w.org/en/wp-
content/uploads/2013/09/High-Performance-Entrepreneurs-Final-4-9-UL.pdf
Opportunity

10. 10
Summary
An opportunity to gain exposure to a balanced portfolio of high growth female led
companies, consistent with global trends of investing in women entrepreneurs :
• Diversification at the asset class level
• Diversification at the portfolio level with a target of 15-20 holdings
• Early stage companies run by women, an under-invested market
• Tax free returns in ESVCLP structures
Opportunity

11. 11
• Female founder or woman at “C” level with significant equity and influence
• Raising $50,000 to $500,000 capital from Scale
• Scalable product with proprietary features or channels to market that
provide barriers to entry with potential to generate $20m sales in 5 years
• A commitment to achieving an 5-10x exit for the Fund within 5 years
Investment Strategy

12. 12
Investment Process
• The Fund has exclusive access to proprietary deal flow with the first right,
but not the obligation, to invest.
• Scale Angels’ pipeline since August 201:
Application 112
Screening 73 (60%)
Investor Forum 34 (28%)
Deep Dive 11 (9%)
DD 7 (6%)
Invest 5
(4%)

13. 13
• Investment Committee
– Experienced team plus 2 Scale Angels
– Super majority of 75% required for the Fund to invest
• Board Representation
– Board Director and Board Observer Role
– Sourced by 1 Scale Angel and 1 of Chair/CEO/ID for Fund
• Exits
– Key focus during Due Diligence and post closing.
– Fund to maintain relationships (partners, bankers, executives etc)
Investment Process
Chairman: Susan Oliver CEO: Laura McKenzie Inv. Dir: Lynne Thornton

14. • Scale Angels plus the Fund have potential to invest $40-50m over 10 years
– Only $57 million invested by angels in Australia in 2011
– VC investments of $516 million in 2012 ($55 million in seed/ start-ups)
• Scale Women’s Fund of $25 million compared to $120 million raised by new
Venture Capital funds last year
• This would result in 15-20 new businesses thereby supporting innovation
• In Australia only 4% of investor backed start-ups are female
Impact on Entrepreneurship
Significants investment
Early stage
Female led companies