The document summarizes Icera's background and technology, as well as its exit options. Icera developed cellular modems using an approach that gave it a huge cost advantage over competitors by making its chips up to 6 times smaller. This allowed for improved performance. The company had been successful in partnering with several major carriers. Its exit options included an IPO, acquisition, or remaining private. Acquisition by Nvidia was presented as one of the options.

1. Exit
Options
Steve
Allpress
Vice
President,
Nvidia
Corp.
3rd November, 2011
1

2. Agenda
• Icera background
• Technology
• History
• Exit options
• Acquisition by nVidia
• Summary
2

3. The
Founders:
a
motley
crew
Stan Boland
Simon Knowles
Steve Allpress
Nigel Toon
CEO
VP Silicon
VP/CTO Software
VP Sales/Mktg
3

4. What
we
do
–
cellular
modems
ICE 8065M
40nm baseband
stacked with
512Mb 200MHz DDR
in 8x8 BGA
ICE 9225
Quad band HSPA+ w/diversity
65nm RFIC
21/28Mbps HSPA+, EDGE
in 6x6 BGA
voice & data
4

5. Our
approach
gives
us
a
cellular
modem
with
a
huge
cost
advantage
Intel MC ST-Ericsson Qualcomm Qualcomm Qualcomm Icera
XMM6260 M5730 MDM8200A MDM8220 MDM9200 ICE806x
LTE LTE LTE LTE LTE LTE
DC-42 DC-42 DC-42 DC-42 DC-42 DC-42
MIMO MIMO MIMO MIMO MIMO MIMO
HSPA+ HSPA+ HSPA+ HSPA+ HSPA+ HSPA+
3G/ 3G/ 3G/ 3G/ 3G/ 3G/
HSPA HSPA HSPA HSPA HSPA HSPA
GSM/ GSM/ GSM/ GSM/ GSM/ GSM/
EDGE EDGE EDGE EDGE
EDGE EDGE
15.6m
m2
20mm2 28mm2 61.6mm2 91.4mm2 91.4mm2
As
small
as
1/6th
53mm2 normalized to 40nm
the
size
of
Digital
Baseband
compe4tor
digital
die-­‐size
chips
5

6. And
a
better
user
experience
through
advanced
signal
processing
in
software
Time
for
modem
to
download
in
urban
Intel
MC
ST-­‐Ericsson
ICERA
10dB
PB3
channel
4MB
MP3
file
30s
37s
25s
50MB
1
min
6
mins
8
sec
7
mins
44
sec
5
min
10
sec
YouTube
video
6

7. Company
history
–
what
we
did
Vodafone
T-­‐Mobile
K4510z
WebRocket
LTE
2.0
Vodafone
K3805z
AT&T
Lightning
AT&T
Quicksilver
LTE
multimode
21
HSPA+
SoftBank
C01SI
28
HSPA+
14
HSPA+
7.2
UPA
First
Silicon
3.6
UPA
&
EDGE
Sampled
Company
3.6
DPA
Founded
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
TTPCom PS
Sirific
acquired
acquired
7

8. Exit
Options
• Initial Public Offering
• Acquisition by public or private company
• Merger with complementary company
• Remain private (swap venture capital for private equity)
8

9. Time
to
Exit
M&A
IPO
9
Years
from
First
Funding
to
M&A
8
7
6
5
4
3
2
1
0
1998
2000
2002
2004
2006
2008
2010
Year
Source:
Jefferies
Broadview
• Steady increase in “time-to-exit”, since the technology
bubble burst
• Add about a year for median IPO times compared with M&A
• Large amount of capital required
• Certain to hit some turbulent waters during this long period
9

10. IPO
800
700
600
Number
of
IPOs
500
400
300
200
100
0
Year
• IPO market does exist but it’s smaller than it used to be
• Potential upside from an IPO much larger than private sale
• Intense scrutiny on solid fundamentals
• Focus on quarterly revenue stability can make it challenging for a
start-up
• Limited or no liquidity for founders and employees initially
10

11. An example IPO: Sequans
Initial
Lock-out
Lock-out
Extension
25
20
Price
Per
Share
($)
15
10
IPO Pricing
5
0
14/04/2011
15/05/2011
15/06/2011
16/07/2011
16/08/2011
16/09/2011
17/10/2011
17/11/2011
18/12/2011
Date
• Lock-out period frustrating and risky for management
and employees
• Volatile public market can force subsequent sale for a
low value
11

12. 0.00%
1.00%
2.00%
3.00%
-­‐3.00%
-­‐2.00%
-­‐1.00%
Sep-­‐86
Jun-­‐87
Mar-­‐88
Dec-­‐88
Sep-­‐89
Jun-­‐90
Mar-­‐91
Dec-­‐91
Sep-­‐92
Jun-­‐93
Mar-­‐94
Dec-­‐94
Sep-­‐95
Jun-­‐96
Mar-­‐97
Dec-­‐97
Sep-­‐98
Jun-­‐99
Mar-­‐00
Dec-­‐00
Sep-­‐01
Jun-­‐02
Mar-­‐03
Quarterly
Change
in
US
GDP
(%)
Dec-­‐03
Global
Economy:
GDP
• Only the Great Depression topped that
Sep-­‐04
Jun-­‐05
• Technology bubble barely impacted GDP
Mar-­‐06
Dec-­‐06
Sep-­‐07
Jun-­‐08
Mar-­‐09
Dec-­‐09
• Global economic meltdown from September 2008
Sep-­‐10
Jun-­‐11
12

13. 0.00%
5.00%
-­‐5.00%
10.00%
-­‐25.00%
-­‐20.00%
-­‐15.00%
-­‐10.00%
Jan-­‐02
Apr-­‐02
Jul-­‐02
Oct-­‐02
Jan-­‐03
Apr-­‐03
Jul-­‐03
Oct-­‐03
Jan-­‐04
Apr-­‐04
Jul-­‐04
chips than usual
Oct-­‐04
Jan-­‐05
Apr-­‐05
Jul-­‐05
Oct-­‐05
Jan-­‐06
Apr-­‐06
Jul-­‐06
Oct-­‐06
Jan-­‐07
Apr-­‐07
Jul-­‐07
Oct-­‐07
Jan-­‐08
Apr-­‐08
Jul-­‐08
Oct-­‐08
• Everyone always buys less chips in Q4/Q1
Change
in
Global
Monthly
Silicon
Billings
Jan-­‐09
Apr-­‐09
Jul-­‐09
Oct-­‐09
Jan-­‐10
Apr-­‐10
Jul-­‐10
Oct-­‐10
• Unfortunately, at the end of 2008 they bought a lot less
Jan-­‐11
Apr-­‐11
Global
Economy:
Silicon
cycles
Jul-­‐11
13

14. Global
Economy:
Funding
• Sequoia Capital sends a letter to all its
CEOs in October 2008
• “We are in drastic times. Drastic times
mean drastic measures must be taken to
survive.”
• “Forget about getting ahead, we’re talking
survive. Get this point into your heads.”
• “There will be consequences for those who
hesitate. Act now.”
• “Cut burn-rate by at least 25% if you want
to survive”
• “Cut deeper is the formula for survival”
• “Cut spending. Cut fat. Preserve capital”
• “Survival of the quickest”
• “Spend like it’s your last dollar”
• Effect ripples throughout VC industry
• “Down valuation rounds” the norm
• “Zero valuation rounds” common price-
tag to stay alive
14

15. Company
history
–
what
it
took
Siri7ic
Acquired
25%
cost
cut
15

16. Company
history
-­‐
investment
Capital
Raised
Post-­‐money
ValuaKon
400
Exit
350
300
Amount
($M)
250
200
150
100
50
0
08/04/2002
08/04/2003
08/04/2004
08/04/2005
08/04/2006
08/04/2007
08/04/2008
08/04/2009
08/04/2010
08/04/2011
Date
New
lead
investor
Inside
rounds
16

17.
Company
history
–
how
much
we
sold
14,000,000
12,000,000
10,000,000
Cum baseband shipments
8,000,000
6,000,000
4,000,000
2,000,000
-
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Now in >100 products
>50 global networks
2008 2009 2010 2011
17

18. Industry
consolidation
• Our competitors:
• Qualcomm
• Infineon
• ST-EMP
• Intel buys Infineon’s wireless business for $1.5B
• Desktop sales fall
• Smartphone and iPad sales take off
• Target market moves for application processor vendors
• Cellular modem becomes a rarer and
valuable commodity
• Presents a narrow window of
opportunity for Icera to be acquired

19. Icera
+
nVidia
• On May 10th 2011 it was announced that nVidia
would acquire Icera for $367M in cash (plus an
employee retention plan)
• On June 15th 2011 the deal closed
19

20. nVidia
can
now
supply
both
AP
and
modem
Antenna
Voice and data connectivity
over cellular networks
3G PA
Dup
Switch
EDGE
PA
Baseband chip
RF chip
Radio frequency front-end
Unmodulated or Up-convert
“baseband”
Down-convert
processing
MODEM
20

21. Summary
• Very big technology developments mean a very long-
term commitment so:
• Raise enough capital to weather storms
• Build a successful business first, plan for an exit second
• Semiconductor segment is mature
• Competitors in major markets provide complete
solution
• Customer concentration is intense
• Successful outcomes are either small, lucky or very big
• Paradox: if you can exit quickly, you should but how
then do we create new big companies in the UK?
• Always try to create competitions for investment
and exits
21