Presentation byDr. Andreas O. Tobler

November 5, 2009

Whether you're preparing to launch a startup or want to grow your business, one thing is for certain: You’re going to need money. Debt and equity financing are two different financial strategies:

Debt means borrowing money for your business

Equity entails injecting your own or other stakeholders’ cash into your company

Private Equity provides equity capital to enterprises not quoted on a stock market

Private Equity can be used to• develop new products and technologies

Private Equity provides equity capital to enterprises not quoted on a stock market.

Private Equity can be used to• develop new products and technologies• to expand working capital

Private Equity provides equity capital to enterprises not quoted on a stock market.

Private Equity can be used to• develop new products and technologies• to expand working capital• to make acquisitions or to strengthen a

company’s balance sheet

Private Equity provides equity capital to enterprises not quoted on a stock market.

Private Equity can be used to• develop new products and technologies• to expand working capital• to make acquisitions or to strengthen a

company’s balance sheet.• to resolve ownership and management issues –

a succession in family-owned companies

Private Equity provides equity capital to enterprises not quoted on a stock market.

Private Equity can be used to• develop new products and technologies• to expand working capital• to make acquisitions or to strengthen a

company’s balance sheet.• to resolve ownership and management issues

– a succession in family-owned companies• to buy out or buy in of a business by

experienced managers

Venture capital is, strictly speaking, a subset of private equity and refers to equity investments made for

the launch early development or expansion

of a business.

(Definition of EVCA – European Private Equity and Venture Capital Association)

BioStartUp Co.

€20,000

BioStartUp Co.

Business Plan

€20,000

EXECUTIVE SUMMARY MARKET OPPORTUNITY MARKET ANALYSIS TECHNOLOGY PLATFORM & PRODUCT OVERVIEW COMMERCIAL PLAN RESEARCH & DEVELOPMENT MANUFACTURING & QUALITY CONTROL CLINICAL & REGULATORY INTELLECTUAL PROPERTY CORPORATE STRUCTURE MANAGEMENT BOARD OF DIRECTORS, CONSULTANTS & PROFESSIONALS CORPORATE GOVERNANCE MARKET PLAYERS/COMPETITION RISK FINANCIAL PLAN/ CAPITAL REQUIREMENTS EXIT STRATEGY SUPORTING DOCUMENTS

BioStartUp Co.

Year 1 Year 2 Year 3

Business Plan

€20,000

BioStartUp Co.

Year 1 Year 2 Year 3

Business Plan

€20,000

Performance of an investigation of a business:

Legal Due Diligence Financial Due Diligence Business Due Diligence Technological Due Diligence

Specific Due Diligence areas of concern may also include: Labor Tax IT Environment Intellectual property Real and personal property Insurance and liability coverage Debt instrument review Employee benefits and labor matters International transactions

BioStartUp Co.

Year 1 Year 2 Year 3

Business Plan

€20,000

€200,000

30% of Capital

BioStartUp Co.

BioStartUp Co.

Equity70%

Equity30%

Cash

€20k

10%

Cash€200,000

90%

Angel investors are wealthy individuals or networks that are willing to fund small businesses

Angels are the largest source of seed and start-up capital for businesses

Angel investors tend to fund small businesses for longer periods of time and expect a lower return on investment than do venture capital firms

Venture Capital firms, on the other hand, provide equity for businesses with the expectation of high returns on their investments within three to five years

VCs generally fund companies with significant growth potential – both, Microsoft and Google attracted VC funding

The major advantages of equity (VC) funding are:

You receive capital to start/grow your business along planned timelinesYou become part of a financial networkYou gain access to valuable strategic advise and support

The major drawbacks of equity (VC) financing are:

You are no longer the full owner of your businessYou will be relinquishing not just financial control, but will no longer be the sole arbiter of the business’s creative and strategic direction

Total investment levels reached €2.5bn in CEE

CEE companies attracted close to 5% of total private equity investment across Europe

Investment activity was highly concentrated in the 5 biggest countries in the region: Poland, Hungary, the Czech Republic, Ukraine and Romania

Source: EVCA – Central and Eastern Europe Statistics 2008

The number of venture companies financed increased, driven by the financing of more start-up businesses

Life sciences attracted more investment than any other sector

The communications sector was the most active in terms of numbers of companies financed

Source: EVCA – Central and Eastern Europe Statistics 2008

You should consider starting your own company as one of many possible career paths

If you do, you should consider Venture Capital to grow your company

If you do, you need a business plan Contact as many VCs as possible Be prepared for thorough due diligence Negotiate hard and fair Once funded, keep communication open and

information flowing Work hard and stay focused