7/27/2019 WBT Presentation IQT AN INVESTORS PERSPECTIVE ON PREPARING FOR WBT JANUARY 2009

1/9

1

AN INVESTORS PERSPECTIVE ON

PREPARING FOR WBT

JANUARY 2009

7/27/2019 WBT Presentation IQT AN INVESTORS PERSPECTIVE ON PREPARING FOR WBT JANUARY 2009

2/9

2

AGENDA FOR TODAYS PRESENTATION

Quick overview of In-Q-Tel

Todays investment environment

Opportunities for early-stage enterprises

Making the most of the WBT experience

7/27/2019 WBT Presentation IQT AN INVESTORS PERSPECTIVE ON PREPARING FOR WBT JANUARY 2009

3/9

3

Quick Facts

Launched January 1999

Private, Non-Prof it, Independent organization

CIA ini tial and principal customer

NGA, DIA, additional IC customers now engaged

Operate as a Strategic Investorfor the IC

75 active companies in the portfo lio

49 technology adoptions

131 technology pilots

MISSION: Identify, adapt, and deliver innovative technologies to support theCentral Intelligence Agency and the broader U.S. Intelligence Community.

DELIVERING A SUPPLY CHAIN OF TECHNOLOGY INNOVATION

7/27/2019 WBT Presentation IQT AN INVESTORS PERSPECTIVE ON PREPARING FOR WBT JANUARY 2009

4/9

7/27/2019 WBT Presentation IQT AN INVESTORS PERSPECTIVE ON PREPARING FOR WBT JANUARY 2009

5/9

5

THE VENTURE CAPITAL MARKET TODAY

Investment activity during the first three quarters of 2008 wasfairly strong

o $22.6 billion invested in 2,930 dealsoAhead of 2007 in terms of dollars invested, although fewer deals

The fourth quarter was radically different

o Investment down more than 25% from Q4 2007o

VCs moved extremely quickly to alter investment strategiesFocus on capital preservation, reserves for existing portfoliocompanies, and portfolio tr iageStrategies to balance portfolio holdingsPrecipitous drop in valuations

Opportunities for financial exits are at historic lows

o 6 venture-backed IPOs in 2008 lowest total since 1977o

Two quarters with zero IPOso 260 venture-backed exits in 2008 (vs. 360 in 2007) lowest since 1999

Source: Allegis Capital

7/27/2019 WBT Presentation IQT AN INVESTORS PERSPECTIVE ON PREPARING FOR WBT JANUARY 2009

6/9

6

EARLY-STAGE OPPORTUNITIES

For seed and early-stage ventures, todays market conditionscan be a double-edged sword

Bright spotso Many investors (the ones who remain nimble) are moving back

into early-stage as part of diversification; the percentage of $going to seed and early-stage investments will r ise

o Clean Tech remains a hot area (albeit ripe for a correction);investment is up 400% since 2005, to $8.4 bill ion in 2008

o Early-stage returns highest of any class over 10+ year period

o Frequently heard quote of late: The best companies get startedin downturns

Fewer competitors More early-stage capital sources Lower salaries and less competit ion for talented employees

7/27/2019 WBT Presentation IQT AN INVESTORS PERSPECTIVE ON PREPARING FOR WBT JANUARY 2009

7/9

7

EARLY-STAGE OPPORTUNITIES

For seed and early-stage ventures, todays market conditions canbe a double-edged sword (continued)

Challenges

o Valuations will be significantly lower than in the recent past

o Only the best opportunities will make it through the screen fewer

checks will be cut, and they will be smaller (i.e., seed and early-stage investment will make up a bigger piece of a smaller pie)

MUST paint the vision for a business, not just a reallyinteresting technology

Even greater focus on team, strategy, and abil ity to execute

Bottom line: Early-stage is a good place to be right now

if you have something truly compelling.

7/27/2019 WBT Presentation IQT AN INVESTORS PERSPECTIVE ON PREPARING FOR WBT JANUARY 2009

8/9

8

CAPITALIZING ON THE WBT EXPERIENCE

Diverse group of attendees that can assist an early-stage venturein different ways

o Financial investors

o Corporate/strategic investorso Potential partnerso Technology transfer officers and other sources of IPo Economic development off icialso Potential employees

Some high-level presentation thoughts

o Present the venture story, not just the technology storyo

Be clear on the ask what are you looking for?o Presentation is a means of garnering interest/follow-on

conversationso Have follow-up collateral ready available better than perfect

Network, network, network booths, meals, receptions, etc.

7/27/2019 WBT Presentation IQT AN INVESTORS PERSPECTIVE ON PREPARING FOR WBT JANUARY 2009

9/9

9

Congratulations on your selection, and enjoy WBT

Tom GillespieInvestment Team

In-Q-Tel703-248-3026

tgillespie@iqt.org