1. Finding the Finance Workshop - 16 May 2014 North West Fund for Digital & Creative David Smith, Investment Director

2. STRUCTURE Introduction to the North West Fund for Digital and Creative Overview of Venture Capital How to approach a Venture Capitalist 3. NWF4D&C invests in digital, media and creative businesses in the North West region Example sub-sectors: Online Publishing Advertising and Marketing Services Music Distribution Video Content Gaming Software and IT Services Social Media Social Commerce Apps Development Consumer Data Analytics Convergent Technologies Hardware Telecoms 4. We are one of the most active tech investors in the UK To date we have invested 8.3m in 29 companies through a series of initial and follow-on investments "Of the venture capital investors making [technology] investments, the busiest have been the North West Fund Financial Times Our initial investments range from 50,000 to 1.5m 5. The Team - AXM Venture Capital The Team has significant experience in investing and managing digital, media and creative investments. Investment Managers Fred Mendelsohn David Smith Joanne Evans Investment Committee John Handley Simon Levene Ian Livingstone Shawn Luetchens Rupert Wingate-Saul 6. Portfolio 7. Provides high growth businesses with finance In return for an equity stake VC finance Founders equity Founders equity VC equity Returns come in the long-term, usually from the sale of the company Venture Capital 8. Venture Capitalists look for Strong management team Proposition with high growth potential Potential exit identified A business plan which meets these criteria will attract an investors attention 9. Its more than just the money Leverage additional finance Enabling further rounds Refining and developing the business model Business expertise Introductions Endorsement and credibility Discipline, corporate governance and process 10. Venture capitalists see a lot of companies; one extreme example 960 business plans Venrock 11. Venture capitalists see a lot of companies 960 business plans 292 in person meetings David Pakman Partner at Venrock 12. One Fortunately the North West Fund is much more active! 13. Critical to understand a VCs thought process Strong management team High growth potential Potential exit What can you demonstrate that addresses each point? 14. What can you show to validate your plan Strong management team Doesnt necessarily mean previous experience Must know the sector Non-exec support can be helpful We often provide assistance to help supplement teams 15. What can you show to validate your plan High growth potential Significant market opportunity Clear unmet need Scalable Clear go-to-market strategy Differentiated from competitors 16. What can you show to validate your plan Potential exit Potential acquirers and reasons for an acquisition Capital value created independently to the founders Continued long term growth prospects Presenting a strategic threat to incumbents 17. Best validation is demonstrating traction Airbnb for dogs 18. Best validation is demonstrating traction 19. Best validation is demonstrating traction Real time crab pricing engine for amateur fishermen 20. Best validation is demonstrating traction 21. That last one wasnt true 22. Portfolio 23. The North West Fund for Digital & Creative