How Innovation Linkages in Asia Unlock Value:

A VC’s Perspective

US – Asia Technology Management Center School of Engineering

Stanford University

October 9, 2008

October 2008 2 ICCP Venture Partners, Inc.

  Founded in 1997; four funds under management

  Leverages U.S. technology innovation with Asian economic innovation (cost-effective technology manufacturing and global outsourcing/offshoring)

  Proven “Trans-Pacific” investment strategy anchored on the globalization thesis of “The World is Flat”   28 portfolio companies: 18 companies in the U.S. and 10 in Asia

  Value-added interface -- unlocking value by facilitating cross-border linkages

  Capitalize on synergies in companies operating in both geographies

  Recognized by Cambridge Associates (Boston) to be top quartile of Asian and US venture capital funds

ICCP VENTURE PARTNERS: OVERVIEW

October 2008 3 ICCP Venture Partners, Inc.

  Economic innovation* is defined as any of the following:

1.  Introduction of a new good or new quality of good

2.  Introduction of new method of production

3.  Opening of a new market for manufacturing

4.  Conquest of new source of raw materials

5.  Carrying out a new organization of any industry

  Innovation should add value and result in more profit

* Joseph Schumpeter, Theory of Economic Development, 1934

ECONOMIC CONCEPT OF INNOVATION

October 2008 4 ICCP Venture Partners, Inc.

  Economic innovation has been the catalyst of the Asian economic miracle – leading geography for low-cost technology manufacturing and global outsourcing/offshoring fueled by vast and talented labor pool, improved infrastructure, and government incentives

  Leading U.S. technology companies have strong presence in Asia (Philippine example)   Manufacturing –Texas Instruments, Marvell, SunPower Corp.,

Cypress Semiconductors, Fairchild Semiconductor   Outsourced services – Dell, Microsoft, Hewlett-Packard, IBM,

Electronic Arts

THE PHILIPPINES AND EMERGING ASIA

October 2008 5 ICCP Venture Partners, Inc.

THE PHILIPPINES AND EMERGING ASIA

Software development largely outsourced to India

USA Semiconductor testing and assembly, and software development outsourced to the Philippines

Philippines + Only former U.S. colony in Asia + Only Asian country that shares an affinity for

American culture + Democratic form of government and constitution

are modeled after the U.S. + Legal, intellectual property protection, accounting,

corporate governance, and business practices are consistent with U.S. standards

+ According to the Economic Intelligence Unit, the Philippines has a workforce that is consistently ranked as among the very best in Asia

 Asia is more than just China and India

 China, India, and Southeast Asia form a highly competitive ecosystem for U.S. technology companies

Semiconductor testing and assembly largely outsourced to China

October 2008 6 ICCP Venture Partners, Inc.

Marvell Technology (NASDAQ: MRVL) is a Silicon Valley-based integrated circuits designer for storage, communications and consumer applications

 NASDAQ 100 Index stock

COMPANY CASE STUDY # 1 Deal Attributes  Products were already being

shipped  Unique and highly-defensible IP  Secured contracts from major

disk drive manufacturers  Hardworking Indonesian-Chinese

founders  Successful management

experience in start-up situations  Attractive returns based on

sensitized financials  Likely exit via IPO over the short

to medium term at attractive indicative valuations

 Recognized value of manufacturing in Asia

Investment Statistics

October 2008 7 ICCP Venture Partners, Inc.

 Outsourced product design and assembly of electronic components to the Philippines

 Other new projects slated for the Philippines

COMPANY CASE STUDY # 1 Asian Economic Innovation

 Has operations in Asia Pacific  Headquarters in Singapore

with IC assembly & test, technology design center, sales & technical support

 Design centers in India  Product packaging & testing

in Singapore, Taiwan and Malaysia

 88% of 2007 revenue accounted for by Asia -- China, Japan, Malaysia, Korea, Singapore, Thailand, Philippines, and Taiwan

October 2008 8 ICCP Venture Partners, Inc.

COMPANY CASE STUDY # 1 Marvell: Actual Annual Revenue (in US$ MM)

October 2008 9 ICCP Venture Partners, Inc.

Sitoa Corporation is a software-driven marketplace

COMPANY CASE STUDY # 2

 Consistently exceeded revenue targets

 First to develop a complete solution for online retailing – flattening the barriers to global commerce

 Strong senior and middle management team

 Offensive and defensive patent-pending IP

 Had already signed up a number of major retailers and suppliers

 Very capital efficient

Deal Attributes

Investment Statistics

October 2008 10 ICCP Venture Partners, Inc.

COMPANY CASE STUDY # 2

Asian Economic Innovation

 Current  Outsourcing creation of

consumer-ready product content to a software company in the Philippines

 Evaluating partnerships with Philippine retailers and suppliers

 Evaluating partnerships with Asian logistics providers and e-commerce players

 Roadmap  Expand retailer and supplier

base in Asia, initially Philippines

 Outsource other software development projects to the Philippines

October 2008 11 ICCP Venture Partners, Inc.

COMPANY CASE STUDY # 2 Sitoa Business Model

Product Partners

Retailers

Rapid access to leading online retailers

Minimal additional technology investment

Retail account management and merchandising

Connect once, sell to many

Low cost access to new merchandise

Enter into new categories instantly

Additional revenue stream without the inventory risk

Merchandising and category management

Game changing platform

Merchandising partner

Single, unified source for product information, orders and logistics

Connect once, trade with many

Proven, scalable technology

October 2008 12 ICCP Venture Partners, Inc.

COMPANY CASE STUDY # 2 Sitoa International Roadmap

U.S. Outlets

U.S. Suppliers

U.S. Consumers

Int’l Suppliers

Int’l Outlets

Phase 1: U.S. Domestic

Phase 2: Int’l Supplier Direct Sourcing

Int’l Consumers

Phase 3: Int’l Demand, existing U.S. Suppliers

Phase 4: Int’l Demand, Int’l Supply Base

October 2008 13 ICCP Venture Partners, Inc.

COMPANY CASE STUDY # 2 Sitoa: Actual Annual Revenue (in US$ MM)

October 2008 14 ICCP Venture Partners, Inc.

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