Seed And Early Stage FundingA Practioner Perspective

Haluk ZONTULhzontul@teknolojiyatirim.com.tr

Assessment Process

Investment Policy• The fund is investing to the firms/entrepreneurs who have a business plan

to commercialize technological innovation as service/goods or an innovative application of existing technologies as service/goods with the constraint that the commercialization activities mainly carried out in Turkey.

• The fund does not take basic research risk in any form, but can accept– Foreseeable and limited technology development,– Product development and– Market

risks. • The fund can invest in;

– ICT,– Biotech,– Life sciences– Advanced Material,– Other high value-added technology sectors

Pipe Line

Number

First Meeting 780

Second Meeting 480

Term sheet presented 8

Invested 6

Under final assessment 2

Rejected 470

Fund

Teknoloji Yatırım is currently managing early stage technology fund (Technology 2007) invested by TTGV.

The fund made 6 investment s within 4 years. 5 investments are still active Current areas of portfolio companies are Location Based Services, Business

Intelligence, Medical Safety Disposables , Medical Devices, Microelectromechanical Systems

3.6 m USD equity and 1m USD debt invested (commited or paid) in 6 portfolio companies.

Technology 2007 fund is almost fully commited/paid and fund managers is considering a new fundraising for both current portfolio companies and pipeline.

Before UCA, Erturk Tanrısever, the inventor of the device managed all research activities, product development, patent issues, and animal experiments.

UCA Medikal has been established in 2007 to take the device further. QESD(Quantum Energy Surgical Device) can cut/evaporate and coagulate tissues. Instead of ABC, QESD operates without any electrical current flow through patient

body by electrically neutral argon plasma beam and leaves superior results on tissue.

The final prototype (QESD) product is successfully accomplished after a 2 year of hard-work by fund managers due to inability of the inventor/entrepreneur.

One competitor around the world. http://www.plasmasurgical.com

Usd 400K investment

Patented in 9 EU Countries in addition to USA

an industrially producable body, plasma scapel, control unit, electronic and mechanic system

Portfolio: UCA Medical Medical Devices

a new round?

Portfolio: Infotech Location Based Services Infotech was established in 2000 by young entrepreneurs and an angel investor who

is in construction business.Although numerous useful technologies were created by the entrepreneurs, the firm operationally and financially mismanaged.

In 2007, the fund and other investors co-invested in Infotech having usd 2.5m debt, some negative EBITDA, many legal cases, wrong organization, and many other negative issues.

Infotech has been restructuring in every aspect since Q3 2007 by two major shareholders. The fund managers have been active in restructuring operations of the company mainly in financial, administritive and legal issues.

Today,Infotech has solved its operational, financial, organizational and administritive problems and is generating over a million usd cash to its debtors/shareholders

is exclusive digital navigable map producer for TeleAtlas

is leader in GIS applications and GIS content in Turkey

is one of the big players in fleet tracking

is one and only MPS based tracking company in Turkey

Watiıng for a good exit opportunity

http://www.infotech.com.tr

has been heavily investing in R&D and working for its recurring revenue base

Portfolio: Asset Medical Medical Safety Disposables Asset Medical was established in 2009 Q2 by the fund and two exceptional

entrepreneurs. One entrepreneur brought his medical production know -how and other entrepreneur brought her sales network in take off product.

Company was created from scratch paper and its aim is to create new designs for high contribution margin safety disposables and production of those products.

The first product family is needle free injection valve. Fund Managers has been working in the company as an entrepreneur since

inception. There is no local producer but many blue chips in US and Europe. Company will produce industry average net income margin in 2011

Couple of new rounds for new

product families, production sites,

etc...

www.assetmedikal.com

www.worldbi.biz

Portfolio: Worldbi Business Intelligence WorldBI was established in 2004 to develop busuness intelligence software as a spin

off from LOGO Business Solutions(largest ISV inTurkey) LOGO BS and the fund co-invested Worldbi in 2007 to create a new product having

powerfull attributes that can compete with globally well-known products. Product ( Suxess BI Platform) was completed in 2010 Q1 and the company market

Suxess in Turkey gain customer base and fine tune the product according to the new requirements .

a new round with a worldwide

plan...

..and a new set of datamining applications...

Portfolio: Microsense MEMS Microsense is established in 2011 with two academician and the fund. The company aims to provide low-cost IR dedectors known as microbolometer and

will operate as fabless. Approx. 10 competitors around the world use mainly VOx or a-Si technologies which

lead to high cost dedectors. Due to high cost microbolometers their penetration to current industries very low. Microsense uses CMOS technology is planning to produce low cost microbolometer

in hing volume. The product’s final version will be ready in Q4 2011

TARGET APPLICATIONS Security and Border Control Cover Surveillance Automobile Drive Assistance Distributed Sensor Networks Building Automation Industrial Controlt

PRODUCT FEATURES 128x128 Array Format 70µm Pixel Pitch Low-Noise Differential

Readout 30 fps Scanning Rate NETD < 500mK USB Camera Electronic

Product’s output

Due to its low cost and high yield and high production capacitythis will reshape IR-camera the industry !!!

STRUCTURAL PROBLEMS

• Finding the Investment Opportunities

• Deal Flow

• Making the Deal and Execution

• Legal Infrastructure

• Lack of Awareness / Lack of Practice

• Valorization of Investment (Exit)

• Lack of Exit Channels

Finding the Investment Opportunities : UNIVERSITIES

• Lack of Awareness

• Lack of TTO

• IPR Owned by University Professors

• Cultural Barriers for Commercialization

LEGAL INFRASTRUCTURE

• Most of the business run by friend and family capital (informally)

• Limited or No Institutional Investor Capital

• Continental Europe Legal System (Civil Law)